IP Law Daily, PATENT—3d Cir.: Distribution of patent infringement settlement funds affirmed, (Jul 22, 2025)

By Kevin M. Finson, J.D.

Declaratory judgment interpreting a contractual provision was moot because the parties to the case had already settled their dispute arising under that contract.

A Delaware district court did not err in declining to modify a scheduling order or in finding the surviving declaratory judgment action before it moot, the U.S. Court of Appeals for the Third Circuit has held. The proposed modification would have added new parties and claims mere weeks before trial (CBV, Inc. v. ChanBond, LLC, No. 24-1780 (3d Cir. July 21, 2025)).

CBV, Inc. (CBV) was the owner of several patents, both issued and pending, related to delivery of high-speed data over cable systems. CBV sold its rights in that intellectual property to ChanBond, LLC, (ChanBond) a company in the business of acquiring patent rights and enforcing them. As part of the sale, ChanBond agreed to pay CBV a portion of the “net recoveries” received from enforcement of the patents, which were defined as gross recoveries less several identified categories of costs and expenses. ChanBond contracted with IPNAV, LLC (IPNAV), a company owned by the same individual as ChanBond, Deirdre Leane, to provide consulting services related to the enforcement activities, paid as a percentage of the amount recovered. This meant that the fees paid by ChanBond to IPNAV reduced the net recoveries from which CBV’s compensation was calculated. During this enforcement action, Leane sold her interest in ChanBond to a third party. ChanBond eventually recovered some $125 million for infringement of the patents acquired from CBV. IPNAV and Leane brought an arbitration action against ChanBond to determine their portion of that recovery and CBV brought suit against ChanBond for payment under the contract.

After the trial court denied an injunction to prevent ChanBond from paying IPNAV the amount ordered by the arbitrator, ChanBond and CBV settled the damages claim, leaving declaratory judgment and specific performance claims alive. CBV sought leave to amend to add claims against IPNAV and Leane for unjust enrichment. The trial court denied the motion for leave to amend, finding there was not good cause to allow a modification to the scheduling order, and granted summary judgment finding that the declaratory judgment claim was moot. CBV appealed.

Modification of scheduling order. CBV argued that the trial court erred in denying its motion for leave to add unjust enrichment claims against IPNAV and Leane. The court found that, because the unjust enrichment claim arose after the commencement of the case, this was properly a supplement, not an amendment, to the case. The trial court was within its discretion to find that there was not good cause to allow the addition of these claims a mere few weeks before trial.

Declaratory judgment. CBV also argued that the trial court erred by determining that a declaratory judgment on the meaning of a clause in the contract between CBV and ChanBond requiring prior approval of certain expenses would be moot. The court found that even if this issue had been redressable at the beginning of the suit, in the intervening time IPNAV had been paid in full, CBV had settled its claim against ChanBond relating to the distribution of the patent infringement proceeds, and the court had denied CBV’s request to add claims against IPNAV and Leane. Because at the time of the grant of summary judgment the issue was no longer redressable and would be mere speculation, the trial court did not err in denying relief at that time.

The court affirmed the decision of the trial court.

The Case is No. 24-1780.

Judge: Phipps, P.

Attorneys: Geoffrey G. Grivner (Buchanan Ingersoll & Rooney PC) for CBV Inc. Stephen B. Brauerman (Bayard) for ChanBond LLC.

Companies: CBV Inc.; ChanBond LLC; IPNAV, LLC

Cases: Patent DelawareNews NewJerseyNews PennsylvaniaNews