Intellectual-Property patent

A dispute over a cross-licensing agreement between two major electronic manufacturers has spilled over into the Delaware Court of Chancery, with Sanyo Electronic Co. accusing Intel Corp. of improperly claiming the rights to its intellectual property.

The lawsuit, filed on Oct. 7 by attorneys from Norton Rose Fulbright's Los Angeles and Austin, Texas, offices, was made public on Wednesday. According to the 37-page redacted complaint, Sanyo and Intel had tried to work out their differences for a year, but the talks went nowhere, sending the parties to litigate their claims before Vice Chancellor Morgan T. Zurn in Wilmington.

The dispute stems from a 2006 agreement authorizing Santa Clara, California-based Intel to make and sell certain products under Sanyo's patents.

In the filing, Sanyo said that during negotiations Intel had sought a license to include an “additional category” of products known as “wireless communication modules.” Sanyo resisted, saying it would weaken the company's market standing and turn Intel's customers into competitors in manufacturing mobile phones. The sides eventually agreed to to a license that, Sanyo said, did not cover the modules.

According to the complaint, Sanyo later sold a portfolio of Wi-Fi patents to Hera Wireless, which began licensing the patents to other companies in the industry that allegedly infringed its IP. However, not every firm agreed to take a license, and Hera last year began filing a total of eight lawsuits against the companies, including some of Intel's customers.

Sanyo said Intel responded by saying that its cross license agreement with Sanyo granted it a license to make and sell wireless communication modules and limited the potential liability for Intel's customers. Hera's patents rights, the company said, according to the complaint, were exhausted under the doctrine of patent exhaustion.

Sanyo argued in its lawsuit that Intel was “effectively claiming license rights under Sanyo patents that Intel does not in fact have.” The firm is seeking an order from Zurn declaring that Intel is not authorized to make or sell wireless communication modules. The proposed order would extend to any Intel customers that had incorporated the technology without permission, the complaint said.

“Intel's position today is directly contrary to the parties' understanding as memorialized in the cross license agreement, namely that [wireless communication modules] were a separate category of product that the parties mutually agreed to exclude from the scope of the cross license agreement,” Sanyo's attorneys wrote in the complaint.

“By misrepresenting the scope of its rights under the cross license agreement] and claiming a license to the Wi-Fi patents, patents under which it has no rights to make or sell products, Intel has impaired Sanyo's title to the patents that remain in Sanyo's patent portfolio, as well as to the Wi-Fi patents that Sanyo assigned to Hera.”

Intel's press office did not immediately respond to a request for comment.

Sanyo's attorneys did not return calls Thursday seeking comment on the lawsuit.

Sanyo is represented by David Ben-Meir and Kenji Nakajima of Norton Rose's Los Angeles office and W. Andrew Liddell of the firm's Austin office. Todd Schiltz of Drinker Biddle & Reath's Wilmington office was listed as local counsel in the case.

An online docket-tracking service did not list attorneys for Intel.

The case is captioned Sanyo v. Intel.