In this case before the United States District Court for the Northern District of California, plaintiff Digital Envoy, Inc. (“Digital”) unsuccessfully moved for partial summary judgment against defendant Google, Inc. (“Google”). Digital had licensed its geo-targeting technology to Google and claimed that Google improperly but effectively “licensed” the technology to third parties by utilizing the technology in its AdSense program. Thus, Digital argued that Google provided such third parties with “access” to that technology, in violation of Digital’s and Google’s license agreement. By way of factual and legal background, the Court referenced its previous order of May 20, 2005 in its opinion. In that order, the Court explained, in part, that Google’s AdSense program allowed third party websites to earn revenue by displaying targeted advertisements selected by Google’s algorithms. Digital moved for summary judgment on two issues: first, that the Digital/Google agreement did not permit Google to license Digital’s technology to third parties, and second, that Google had violated this prohibition by effectively licensing and providing access to the technology to third parties through its AdSense program.
On the first issue, the Court determined that it would not expedite the “adjudicative process” to find for Digital at that time, and did not do so.
With regard to the second issue, Google contested the claim that they had effectively “licensed” or “sublicensed” the technology on several grounds. First, Google cited Intel Corp. v. ULSI Sys. Tech., Inc., 955 F.2d 1566 (Fed. Cir. 1993) and Lisle Corp. v. Edwards, 755 F.2d 693 (Fed. Cir. 1985) for the proposition that “no sublicenses [are] created by licensed manufacturers who [resell] products covered by those licenses to third parties.” (brackets added). The Court explained that Intel and Lisle involved the resale of licensed goods whose licenses implicitly or explicitly forbid sublicensing. In both cases, the courts ruled that reselling the goods did not constitute sublicensing. Although Digital argued that Intel and Lisle were distinguishable because this case involved the licensing of technology rather than goods, the Court found that Digital did not cite any authority in support of that argument.
Next, Google successfully argued that there were no undisputed facts demonstrating that Google was actually licensing or sublicensing Digital’s technology to third parties. Significantly to the Court, there was no evidence that third parties had “access” to Digital’s technology; third parties only received the results of Google’s algorithm that used the technology. In addition, a sample AdSense agreement examined by the Court did not grant users the right to use or access Digital’s technology.
Finally, Digital did not effectively rebut Google’s argument that a section of the licensing agreement itself expressly authorized Google’s use of Digital’s technology to develop “new services for third parties.” Google argued that its activities fell within this language, while Digital argued that the section was limited to “development . . . of new services” but not “access to Digital’s data.”
Because whether Google had “licensed” Digital’s technology in violation of their license agreement was a disputed material fact, the Court denied summary judgment on this point.