IP Law Daily, PATENT—E.D. Tex.: Question of whether claim was subject to arbitration must be decided by arbitrator, (Jul 22, 2022)

By Kevin M. Finson, J.D.

A dispute about whether a claim was subject to a contractual arbitration provision was properly submitted to the arbitrator and not to the court because the parties had so agreed in their written contract.

A manufacturer of semiconductors was required to arbitrate the question of whether it was bound to indemnify its customer for patent infringement claims, the U.S. District Court in Marshall, Texas, has held. The parties had entered into a written arbitration agreement which adopted a set of rules requiring such questions to be decided by the arbitrator (TQ Delta, LLC v. Commscope Holding Co., Inc., July 21, 2022, Gilstrap, R.).

TQ Delta, LLC sued several companies, including Nokia of America Corp. (Nokia), for infringement of 19 patents all related to the defendants' manufacture or sale of products complying with certain DSL standards. Nokia then filed a third-party suit for indemnification against Broadcom Corp. (Broadcom), alleging that Broadcom had sold it the infringing chips and that pursuant to a contract of sale, Broadcom was obligated to indemnify Nokia. Broadcom moved to dismiss, arguing that under the contract the issue was required to be arbitrated.

Arbitration. The court noted that the gateway questions of arbitrability, whether the parties entered into a valid arbitration agreement, and whether the particular issue at hand was covered by the arbitration agreement, could be delegated to an arbitrator if there was clear evidence that such delegation was intended by the parties. In this case, the contract specified the arbitration would be conducted under the Rules of Conciliation and Arbitration of the International Chamber of Commerce. Those rules clearly laid out that questions of arbitrability would be decided by the arbitrator, not by a court.

The court severed the indemnification claim from the remainder of the suit and ordered that it be stayed pending arbitration.

The Case is No. 2:22-cv-00274-JRG.

Attorneys: Ashley Marie Ratycz (McAndrews, Held & Malloy, Ltd.) for TQ Delta, LLC. Douglas J. Kline (Goodwin Proctor, LLP) for CommScope Holding Co., Inc., CommScope Inc. and Arris US Holdings, Inc.

Companies: TQ Delta, LLC; CommScope Holding Co., Inc.; CommScope Inc.; Arris US Holdings, Inc.

Cases: Patent TexasNews