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July 21, 2023

Kramer Levin Secures Summary Judgment for Sirius XM Radio in Patent Dispute

On July 10, 2023, Senior U.S. District Judge Joseph F. Bataillon, sitting by designation in the U.S. District Court for the District of Delaware, granted summary judgment for our client Sirius XM Radio Inc. (Sirius XM), ending a six-year-long patent infringement lawsuit brought against Sirius by Fraunhofer-Gesellschaft zur Förderung der Angewandten Forschung e.V. (Fraunhofer), a Germany-based research organization.

In 1998, WorldSpace International Network (WorldSpace) obtained an exclusive and irrevocable license from Fraunhofer for certain technology related to satellite communication networks. That same year, WorldSpace sublicensed that and other technology to a Sirius XM predecessor company. And in 1999, Fraunhofer entered into a separate agreement granting an irrevocable and perpetual license for the same and other technology to the Sirius XM predecessor.  

In 2008, WorldSpace filed for bankruptcy, during which Sirius XM entered into a court-approved settlement with WorldSpace providing it a lump sum payment to maintain Sirius XM’s irrevocable sublicense. In 2010, WorldSpace and Fraunhofer entered into an agreement pursuant to which WorldSpace “rejected” the master license as part of the bankruptcy process. Much later, Fraunhofer maintained that Sirius XM had been infringing the patents starting in 2010 because, it claimed, both the license agreement between Fraunhofer and WorldSpace and sublicense between WorldSpace and Sirius XM’s predecessor had terminated by virtue of the bankruptcy and the 1999 consulting agreement did not cover its patents. However, Fraunhofer said nothing to Sirius XM about this supposed claim for at least five years and instead did business as usual with Sirius XM.

In ruling in favor of Sirius XM, Judge Bataillon found that Fraunhofer is equitably estopped from asserting any infringement claims against Sirius XM based on its five-year silence and related conduct. As Judge Bataillon posed in his opinion – “Why the wait?” and then concluded: “an undisputed record establishes a more than five-year period during which Fraunhofer’s silence and course of conduct (intentional or not) misled SXM into reasonably believing it still had a valid and Bankruptcy Court approved sublicense to the asserted patents, during which SXM substantially developed its business in reliance, in an expenditure of time, product development, manufacturing shifts, and installations that (aside from the money) SXM could not get back were this stale claim permitted.”

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