Charter Communications Holding Company, LLC v. Sonus Networks, Inc.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

CHARTER COMMUNICATIONS )
HOLDING COMPANY, LLC, )
CHARTER COMMUNICATIONS )
OPERATING, LLC, and )
BRIGHT HOUSE NETWORKS, LLC, )
)
Plaintiffs, )
)
v. ) C.A. No.: N22C-09-529 EMD CCLD
)
SONUS NETWORKS, INC. and )
RIBBON COMMUNICATIONS )
OPERATING COMPANY, INC., )
Defendants. )

Submitted: March 14, 2025
Decided: May 14, 2025

Upon Defendants’ Motion for Summary Judgment,
GRANTED.

Upon Plaintiffs’ Motion for Summary Judgment,
DENIED.

Kelly E. Farnan, Esquire, Sara M. Metzler, Esquire, RICHARDS, LAYTON & FINGER, P.A.,
Wilmington, Delaware; Daniel L. Resiner, Esquire, David Benyacar, Esquire, Michael A.
Lynn, Esquire, Melissa Brown, Esquire, ARNOLD & PORTER KAYE SCHOLER LLP, New
York, New York, Peter H. Vogel, Esquire, Dina Hayes, Esquire, ARNOLD & PORTER KAY
SCHOLER LLP, Chicago, Illinois. Attorneys for Plaintiffs.

S. Michael Sirkin, Esquire, Roger S. Stronach, Esquire, A. Gage Whirley, Esquire, Thomas
C. Mandracchia, Esquire, ROSS ARONSTAM & MORITZ LLP, Wilmington, Delaware; Kurt
M. Pankratz, Esquire, Susan Kennedy, Esquire, Ryan T. Ward, Esquire, BAKER BOTTS
LLP, Dallas, Texas, Attorneys for Defendants.

DAVIS, P. J.
I. INTRODUCTION

This is an action for indemnification stemming from federal patent litigation. Plaintiffs

Charter Communications Holding Company, LLC (“CCHC”), Charter Communications

Operating , LLC (“CCO”) and Bright House Networks, LLC (“BHN” and together with CCHC

and CCO, “Plaintiffs”) were sued in multiple venues for patent infringement, at least in part

because of their use of products made by Defendants Sonus Networks, Inc. (“Sonus”) and

Ribbon Communications Operating Company, Inc. (“Ribbon” and together with Sonus,

“Defendants”). Plaintiffs reached a global settlement for $220 million. In addition, Plaintiffs

incurred over $25 million in fees and costs related to the patent infringement litigation.

Prior to that litigation, Plaintiffs signed three separate agreements with Ribbon. Each

agreement contains an indemnification provision. Defendants have moved for summary

judgment, contending that Plaintiffs failed to provide contractual notice and otherwise did not

allow the Defendants to take control of Plaintiffs’ defense or settlement discussions. Plaintiffs

move for summary judgment, asking the Court to find that Defendants’ expert improperly

calculated damages.

To survive summary judgment, it is not enough that a party says there is a factual issue

that needs to be resolved at trial. Rather, the Court examines the record to determine if there are

genuine issues of material fact. The factual record is closed in this civil action. Based on that

record, the Court has determined that are no genuine issues as to material facts. The Court finds

that Plaintiffs failed to provide the required contractual notice to Defendants or properly tender

the control of the patent infringement litigation. Accordingly, the Court GRANTS Defendants’

motion for summary judgment (“Defendants Motion”). 1

1
D.I. No. 159.

2
Defendants Motion is case dispositive. Accordingly, Plaintiffs’ motion for summary

judgment (“Plaintiffs Motion”) 2 is DENIED as moot.

II. STANDARD OF REVIEW

The standard of review on a motion for summary judgment is well-settled. The Court’s

principal function when considering a motion for summary judgment is to examine the record to

determine whether genuine issues of material fact exist, “but not to decide such issues.” 3

Summary judgment will be granted if, after viewing the record in a light most favorable to a

nonmoving party, no genuine issues of material fact exist, and the moving party is entitled to

judgment as a matter of law. 4

If, however, the record reveals that material facts are in dispute, or if the factual record

has not been developed thoroughly enough to allow the Court to apply the law to the factual

record, then summary judgment will not be granted. 5 The moving party bears the initial burden

of demonstrating that the undisputed facts support his claims or defenses. 6 If the motion is

properly supported, then the burden shifts to the non-moving party to demonstrate that there are

material issues of fact for the resolution by the ultimate fact-finder. 7

“These well-established standards and rules equally apply [to the extent] the parties have

filed cross-motions for summary judgment.” 8 Where cross-motions for summary judgment are

2
D.I. No. 160.
3
Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations omitted); Oliver B. Cannon
& Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del. Super. 1973).
4
Id.
5
See Ebersole v. Lownegrub, 180 A.2d 467, 470 (Del. 1962); see also Cook v. City of Harrington, 1990 WL 35244,
at *3 (Del. Super. Feb. 22, 1990) (citing Ebersole, 180 A.2d at 467) (“Summary judgment will not be granted under
any circumstances when the record indicates . . . that it is desirable to inquire more thoroughly into the facts in order
to clarify the application of law to the circumstances.”).
6
See Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1970) (citing Ebersole, 180 A.2d at 470).
7
See Brzoska v. Olsen, 668 A.2d 1355, 1364 (Del. 1995).
8
IDT Corp. v. U.S. Specialty Ins. Co., 2019 WL 413692, at *5 (Del. Super. Jan. 31, 2019)(citations omitted); see
Capano v. Lockwood, 2013 WL 2724634, at *2 (Del. Super. May 31, 2013) (citing Total Care Physicians, P.A. v.
O’Hara, 798 A.2d 1043, 1050 (Del. Super. 2001)).

3
filed and neither party argues the existence of a genuine issue of material fact, “the Court shall

deem the motions to be the equivalent of a stipulation for decision on the merits based on the

record submitted with the motions.” 9 But where cross-motions for summary judgment are filed

and an issue of material fact exists, summary judgment is not appropriate. 10 To determine

whether there is a genuine issue of material fact, the Court evaluates each motion

independently. 11 The Court will deny summary judgment if the Court determines that it is

prudent to make a more thorough inquiry into the facts. 12

III. RELEVANT FACTS 13

A. THE PARTIES

Plaintiffs provide cable, internet, and phone services in 41 states in both residential and

commercial settings. 14 Defendants provide software and hardware products to allow telephone

services to be delivered over internet-based networks. 15

B. THE AGREEMENTS

Through a series of acquisitions, Defendants became the counterparties to three

agreements to provide hardware and software to Plaintiffs. 16 First, Defendants acquired the

Purchase and License Agreement between Nortel Networks Inc. and CCHC (the “Nortel

9
Del. Super. Civ. R. 56(h).
10
Motors Liquidation Co. DIP Lenders Tr. v. Allianz Ins. Co., 2017 WL 2495417, at *5 (Del. Super. June 19, 2017),
aff’d sub nom., Motors Liquidation Co. DIP Lenders Tr. v. Allstate Ins. Co., 191 A.3d 1109 (Del. 2018); Comet Sys.,
Inc. S’holders’ Agent v. MIVA, Inc., 980 A.2d 1024, 1029 (Del. Ch. 2008); see also Anolick v. Holy Trinity Greek
Orthodox Church, Inc., 787 A.2d 732, 738 (Del. Ch. 2001) (“[T]he presence of cross-motions ‘does not act per se as
a concession that there is an absence of factual issues.’”) (quoting United Vanguard Fund, Inc. v. TakeCare, Inc.,
693 A.2d 1076, 1079 (Del. 1997))).
11
Motors Liquidation, 2017 WL 2495417, at *5; see Fasciana v. Elec. Data Sys. Corp., 829 A.2d 160, 167 (Del. Ch.
2003).
12
Ebersole, 180 A.2d at 470–72.
13
Numbered exhibits refer to those attached to Plaintiffs’ motion while lettered exhibits refer to those attached to
Defendants’ motion.
14
Ex. 3.
15
Ex. 21, Ex. 3.
16
D.I. 13 (“Answer”) ¶¶7-8. Defendants note that Sonus is not a party to any of the agreements after the
acquisitions. The Court refers to Defendants collectively for simplicity.

4
Agreement”). 17 Second, Defendants acquired the Master Agreement between Cedar Point

Communications, Inc. and CCO (the “Cedar Point Agreement”). 18 Third, Defendants acquired

the Standard Purchase and License agreement between BHN and Sonus Networks, Inc. (the

“Sonus Agreement”). 19 The Court will collectively refer to the Nortel Agreement, the Cedar

Point Agreement and the Sonus Agreement as the “Agreements.”

The Agreements contain indemnification provisions. The Nortel Agreement

indemnification provision states:

If a third party claims that [Defendants’] Hardware or Software provided to
Customer under this Agreement infringes that party’s patent or copyright,
[Defendants] will defend Customer against that claim at [Defendants’]
expense and pay all costs and damages that a court finally awards or are
agreed in settlement, provided that Customer a) promptly notifies
[Defendants] in writing of the claim and b) allows [Defendants] to control,
and cooperates with [Defendants] in, the defense and any related settlement
negotiations. Customer may at its discretion participate in the defense of
the claim and in doing so shall be responsible for the cost associated with
its participative representation. 20

The Cedar Point Agreement indemnification provides:

[Defendants] will, at its own expense, indemnify, defend and hold harmless
Company . . . from and against any and all actions . . . connected with or in
any manner arising from (a) any allegation by any third party that any
Product, and/or the Company’s use of the Product, infringes upon
any . . . U.S. or Canadian patent . . . . The foregoing obligations are
conditioned on Company notifying [Defendants] promptly in writing of
such action, provided that any failure to provide such notice shall not relieve
[Defendants] of its indemnification obligations hereunder, except to the
extent that [Defendants’] ability to defend such Claim is actually prejudiced
by such failure; giving [Defendants] sole control of the defense thereof and
any related settlement negotiations . . . . Company may participate in the
defense or settlement of any Claim with counsel at its own expense. 21

17
Ex. A.
18
Ex. B.
19
Ex. C. In 2017, the Sonus Network, Inc. that is the counterparty to the Sonus Agreement changed its name to
Ribbon Communications, Inc. Defendant denies that Defendant Sonus is the successor-in-interest to the Sonus
Agreement. Ans. ¶ 9.
20
Nortel Agreement, § 10.
21
Cedar Point Agreement, § 6.1.

5
Finally, the Sonus Agreement indemnification provision states:

[Defendants] will indemnify, defend and hold Customer harmless from and
against all liability, loss, costs, damages, and reasonable attorney’s fees
(“Losses”) arising out of any claim alleging that any Product or
Deliverable . . . infringes any United States patent . . . of a third party.
[Defendants’] indemnification obligation is subject to Customer’s (i)
tendering to [Defendants] (and its insurer) full authority to defend or settle
any such claim and (ii) reasonable cooperation in the defense of such claim,
at [Defendants’] sole expense. Customer will notify [Defendants] in writing
of any such claim reasonably promptly after receipt by Customer of notice
of such claim, provided that any failure to give such prompt notification will
not relive [Defendants] of its obligations hereunder except to the extent that
[Defendants’] ability to defend such claim is prejudiced
thereby. . . . Customer may retain its own counsel in connection with any
such claim at its own expense. 22

The Agreements provide that Defendants will not indemnify Plaintiffs if Plaintiffs combine

Defendants’ hardware and software with any other company’s products as an infringing

system. 23

The Agreements all require written notice of any claim that may give rise to an

indemnification obligation. 24 However, the Agreements do vary on what must be contained in

the written notice and the timing of the written notice. 25

The Nortel Agreement and Sonus Agreement are governed by New York law. 26

Delaware law governs the Cedar Point Agreement. 27

C. THE LITIGATION

Sprint Communications Company L.P. (“Sprint”) filed several lawsuits against Plaintiffs

in Delaware, Kansas, and Texas. 28 Only case number 17-cv-1734 (D. Del.) (the “Litigation”)

22
Sonus Agreement, § 7.
23
Nortel Agreement, § 10; Cedar Point agreement, § 6.1; Sonus Agreement, § 7.
24
Id.
25
Id.
26
Nortel Agreement, § 12; Sonus Agreement, § 14.
27
Cedar Point Agreement, §14.5.
28
Ex. AZ.

6
filed by Sprint in the United States District Court of Delaware (the “District Court”) on

December 1, 2017 concerns the Defendants.

Sprint filed an Amended Complaint in the Litigation on December 15, 2017. 29 The

Amended Complaint specifically references equipment provided to Plaintiffs by Nortel and

Cedar Point. 30 Plaintiffs filed a motion to dismiss the Litigation on February 28, 2018, and the

motion was fully briefed by April 10, 2018. 31 The District Court denied the motion to dismiss

on May 22, 2018. 32 Plaintiffs answered the Amended Complaint and asserted counterclaims on

June 19, 2018. 33 A scheduling order was entered on August 29, 2018. 34

Sprint served its identification of accused products and services on September 5, 2018. 35

Sprint served its initial infringement contentions on December 21, 2018. 36 Discovery, including

fact and expert discovery, closed in June of 2020, 37 although the parties deposed certain

witnesses in 2021. 38

The claim construction process began on April 4, 2019, and the District Court issued its

claim construction order on January 6, 2020. 39 The parties served final infringement and

invalidity contentions in February of 2020. 40

29
Litigation, D.I. 14.
30
Litigation, D.I. 14 at ¶ 52.
31
Litigation, D.I. 19 and D.I. 30.
32
Litigation, D.I. 31.
33
Litigation, D.I. 33.
34
Litigation, D.I. 50.
35
Litigation, D.I. 51.
36
Litigation, D.I. 88.
37
Ex. AB.
38
Ex. AA, at ¶¶ 4-5; Ex. 24, ¶¶125-26.
39
Litigation, D.I. 304.
40
Litigation, D.I. 376 and 377.

7
Summary judgment and Daubert briefing began on June 12, 2020, and the District Court

made its rulings on March 16, 2021. 41 The parties moved to stay all deadlines in the case on

April 27, 2021. 42 The District Court dismissed the case on March 22, 2022. 43

D. SETTLEMENT COMMUNICATIONS

Plaintiffs and Sprint began settlement discussions the same day the Litigation was filed. 44

A settlement offer was made on January 30, 2018. 45 An unsuccessful mediation occurred in

April 2018, and settlement discussions continued. 46 Sprint made a new settlement offer in July

2018. 47 The parties continued discussing settlement, and Sprint made a subsequent settlement

offer in September 2020. 48 Sprint made another settlement offer in December 2020, 49 and

Plaintiffs countered on February 15, 2021. 50 The parties traded offers again in March and April

2021. 51 The parties reached a tentative settlement on April 20, 2021. 52

Plaintiffs notified Defendants of settlement discussions for the first time on April 28,

2021—eight days after reaching a tentative settlement with Sprint. 53 Sprint and Plaintiffs

executed a settlement agreement in March 2022 (the “Settlement Agreement”). 54 The Settlement

Agreement resolved all suits between Sprint and the Plaintiffs, not just the Litigation. 55

41
Litigation, D.I. 565, 567, 569, 573.
42
Litigation, D.I. 574.
43
Litigation, D.I. 589.
44
Ex. O.
45
Ex. P.
46
Ex. M.
47
Ex. Q.
48
Ex. AI.
49
Ex. AJ.
50
Ex. AK.
51
Ex. AL.
52
Ex. AN.
53
Ex. AO.
54
Ex. AZ.
55
Id.

8
E. PLAINTIFFS’ COMMUNICATIONS WITH DEFENDANTS

Plaintiffs sent Defendants a letter on October 31, 2018 (the “October 2018 Letter”). 56

The October 2018 Letter states that Kirkland & Ellis LLP represents Plaintiffs in the Litigation,

specifically referencing the case name and number. 57 The letter mentions that Plaintiffs are

required to produce documents in the Litigation and those documents may contain Defendants’

confidential information. 58 There is no mention in the October 2018 Letter about the nature of

the suit, and no mention of indemnification. Moreover, the letter does not specify or otherwise

mention if Defendants’ products were at issue—i.e., “accused products”—in the Litigation.

On October 18, 2019, Plaintiffs served a third-party subpoena on Defendants (the

“Subpoena”). 59 The Subpoena defines “Accused Products” to be certain products sold by

Ribbon. 60 The Subpoena does not mention indemnification. The Court has not been provided

with any cover letter or the like that cites to the indemnification provisions in the Agreements.

On July 20, 2020, Plaintiffs sent a letter (the “July 2020 Letter”) to Defendants stating

“We are providing notice of the above matter to you pursuant to the indemnification provisions

of our November 24, 2004 Master Agreement with Cedar Point Communications Inc, June 10,

2011 Master Purchase Agreement with Sonus Networks, Inc., and all applicable amendments

and subsequent agreements. Please let me know when you are available to discuss how we can

effectively defend this claim.” 61 The agreements referenced in the July 2020 Letter are not the

Cedar Point Agreement (signed in 2008) or Sonus Agreement (different parties). There is no

mention of the Nortel Agreement.

56
Ex. R.
57
Id.
58
Id.
59
Ex. T.
60
Ex. T.
61
Ex. X.

9
On August 7, 2020, Defendants sent a letter responding to the July 2020 Letter. 62

Defendants asked for additional information from Plaintiffs so as to investigate the claim. 63

On September 1, 2020, Plaintiffs sent Defendants a letter summarizing the infringement

contentions in the Litigation and asked to discuss “an appropriate Ribbon contribution” to

defense costs and to “begin discussions regarding Ribbon’s indemnification obligations.” 64

On September 25, 2020, Defendants responded, saying they were investigating the

infringement contentions. 65 Defendants expressed concern that the “case has been in litigation

for over three years, and yet you have only recently notified Ribbon that you wish to invoke your

defense and indemnification rights.” 66

Three months later, on December 24, 2020, Plaintiffs responded that the October 2018

Letter and Subpoena constituted notice under the agreements. 67 Plaintiffs said because no trial

date was set, “[t]here are many important decisions that remain about which [] defenses should

be relied on at trial.” 68 This letter also contained a breakdown apportioning damages that

Defendants would be responsible for if Plaintiffs were found liable. 69 This letter does not

mention any settlement discussions.

IV. PARTIES’ CONTENTIONS

A. DEFENDANTS MOTION

Defendants argue that Plaintiffs failed to give prompt notice of the Litigation and failed

to give them the necessary control of the Litigation or settlement discussions. 70 Defendants

62
Ex. AD.
63
Id.
64
Ex. H.
65
Ex. AE.
66
Id.
67
Ex. AF.
68
Id.
69
Id.
70
Trans. ID. 75016596 (“Def. Op. Br.”), at 19-28.

10
maintain that notice is a condition precedent that was not fulfilled by Plaintiffs, and thus

Defendants do not owe indemnification. 71 Defendants contend that the October 2018 Letter and

Subpoena do not constitute prompt notice, because they were sent at least 10 months after the

litigation started, because they only contain the case name and number with no mention of the

claims against their products, and Plaintiffs did not know whether any claims were indemnifiable

when those were sent. 72

Defendants further argue that by not tendering control of the Litigation, Plaintiffs

committed a prior material breach of the agreements that excused Defendants’ performance. 73

Finally, Defendants assert that Plaintiffs failed to strictly comply with the notice

requirements of the Cedar Point Agreement because Plaintiffs did not send it by overnight

mail. 74

Plaintiffs respond that notice cannot be a condition precedent because lack of prompt

notice did not relieve Defendants of their indemnification obligations. 75 Regardless, Plaintiffs

say that the October 2018 Letter and Subpoena constituted notice. 76 Plaintiffs argue that it is

immaterial that Plaintiffs did not know if the claims were indemnifiable until after those were

sent, because the Agreements only require notice of the claims. 77 Plaintiffs say Defendants were

not prejudiced at any point, because the October 2018 Letter constituted notice and very little

had happened in the Litigation by that point. Further, Defendants were aware of the Litigation

from other sources. 78 Plaintiffs also note that Defendants concluded that the claims in the

71
Id.
72
Def. Op. Br., at 22-23.
73
Def. Op. Br., at 28, 31, 35.
74
Def. Op. Br., at 33.
75
Trans, ID. 75175503 (“Pl. Ans. Br.”), at 17-18.
76
Pl. Ans. Br., at 19-22.
77
Pl. Ans. Br., at 22.
78
Id. at 30

11
Litigation were not indemnifiable, so Defendants were never going to defend the Litigation

regardless of when Plaintiffs provided notice. 79

Plaintiffs argue that they tried to turn over control of the Litigation, but Defendants

refused to take control. 80 Plaintiffs also contend that a question of fact exists as to whether they

complied with the notice provision of the Cedar Point Agreement. 81

B. PLAINTIFFS MOTION

Plaintiffs assert that, if the Defendants are found to have breached their indemnification

obligations, Defendants are liable for the entire amount of the settlement attributed to the

Litigation. 82 In addition, Plaintiffs contend that Defendants cannot apportion damages based on

the contribution of other companies’ equipment. 83

Defendants argue that Plaintiffs are not moving on any claim or defense, and so summary

judgment is inappropriate. 84 Defendants further state that the Litigation asserted claims for

infringement of multiple patents against multiple companies, and assuming (but not conceding)

there is an indemnifiable claim, then they are only liable for the claims that accuse their

equipment. 85

V. DISCUSSION

A. DEFENDANTS MOTION

1. Notice

The parties provide competing interpretations of the Agreements’ notice provisions.

Defendants contend that neither the October 2018 Letter nor the Subpoena constitute notice

79
Id.
80
Id. at 32-35.
81
Pl. Ans. Br., at 23.
82
D.I. 160 (“Pl. Op. Br.”), at 21-32.
83
Id.
84
Def. Ans. Br., at 1.
85
D.I. 167 (“Def. Ans. Br.”), at 25.

12
because the agreements require that Plaintiffs provide details of the Litigation. 86 Plaintiffs

contend that nothing more than the case name and number was required. 87

“Issues of contract interpretation are questions of law reserved for the court.” 88

“Delaware adheres to the ‘objective’ theory of contracts, i.e.[,] a contract’s construction should

be that which would be understood by an objective, reasonable third party.” 89 “Contract terms

themselves will be controlling when they establish the parties’ common meaning so that a

reasonable person in the position of either party would have no expectations inconsistent with the

contract language.” 90

“Absent some ambiguity, Delaware courts will not distort or twist contract language

under the guise of construing it.” 91 This Court will give effect to the parties’ intentions as

reflected by the terms of an unambiguous contract, “construing the agreement as a whole as

reflected in the four corners of the contract.” 92 “Contractual interpretation operates under the

assumption that the parties never include superfluous verbiage in their agreement, and that each

word should be given meaning and effect by the court.” 93

The Court finds the Agreements, and specifically the words “notifies,” 94 “notifying,” 95

and “notify” 96 to be unambiguous. The Court, therefore, will adopt their plain and ordinary

meaning and turn to the dictionary for guidance. 97 Merriam-Webster defines “notify” as “to give

86
Def. Op. Br., at 22-23.
87
Pl. Ans. Br., at 19.
88
Benchmark Invs. LLC v. Pacer Advisors, Inc., 2024 WL 3567367, at *6 (Del. Super. July 29, 2024).
89
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (citing NBC Universal v. Paxson Commc’ns,
2005 WL 1038997, at *5 (Del. Ch. Apr. 29, 2005)).
90
Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997).
91
Allied Cap. Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1030 (Del. Ch. 2006).
92
Texas Pacific Land Corp. v. Horizon Kinetics LLC, 306 A.3d 530, 548 (Del. Ch. 2023).
93
NAMA Hldgs., LLC v. World Mkt. Ctr. Venture, LLC, 948 A.2d 411, 419 (Del. Ch. 2007).
94
Nortel Agreement, § 10.
95
Cedar Point Agreement, § 6.1.
96
Sonus Agreement, § 7.
97
Sprintz v. Division of Family Servs., 228 A.3d 691, 700 (Del. 2020).

13
formal notice to.” 98 “Notice” is defined as a “notification or warning of something, especially to

allow preparations to be made.” 99 Accordingly, the Defendants’ interpretation of the

Agreements is correct. Plaintiffs were required to provide written notice of a claim (i.e., a claim

by a third party for infringement that implicates Defendants intellectual property provided to

Plaintiffs) that implicates Defendants’ potential indemnification liabilities under the Agreements

and as discussed below, the opportunity of Defendants to assume control of the defense and

settlement of that claims.

“The purpose of summary judgment is to avoid the delay and expense of a trial where the

ultimate fact finder … has nothing to decide.” 100 “[T]he trial court must determine whether the

plaintiffs on the summary judgment record proffered evidence from which any rational trier of

fact could infer that plaintiffs have proven the elements of a prima facie case” by the applicable

legal standard. 101 The question for a judge is not whether there is literally no evidence

supporting the nonmoving party, rather it is whether the evidence would allow a rational juror to

rule in favor of the nonmoving party. 102 The standard is nearly identical to the standard for a

directed verdict. 103

The Court finds that the October 2018 Letter and the Subpoena are not the form of

contractual notice required to trigger potential indemnification obligations under the

Agreements. The Agreements each provide a specific provision on indemnification and written

notice. These provisions are bargained for formal procedures that implicate potential serious

98
Notify, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/notify (last visited Apr. 14, 2025).
99
Sprintz, 228 A.3d at 700.
100
Merrill v. Crothall-American, Inc., 606 A.2d 96, 99 (Del. 1992).
101
.Cerberus Intern., Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1149 (Del. 2002).
102
Deutsche Bank Tr. Co. Americas v. Royal Surplus Lines Ins. Co., 2012 WL 2898478, at *11 (Del. Super. July 12,
2012). See also Schuylkill and Dauphin Imp. Co. v. Munson, 81 U.S. 442, 448 (1871) (“[B]efore the evidence is left
to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there
is any upon which a jury can properly proceed to find a verdict for the party producing it.”).
103
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51 (1986).

14
monetary obligations. While the specifics of each Agreement vary somewhat, the Agreements

require Plaintiffs to provide written notice of a potential indemnification claim. 104

The October 2018 Letter is from Plaintiffs’ counsel, Kirkland & Ellis LLP. The October

2018 Letter does reference the Litigation by case name and number; however, the October 2018

Letter does not: (i) refer to the Agreements, or (ii) contend that a third-party claim has been made

that implicates Defendants’ products. Instead, the October 2018 Letter notifies Defendants that

Plaintiffs are required to produce documents in the Litigation that may contain Defendants’

confidential information. As discussed above, the October 2018 Letter does not discuss the

nature of the Litigation, any mention of indemnification or whether the Defendants’ products are

accused products in the Litigation. The October 2018 Letter does not contain information to

allow the Defendants to begin investigating and preparing for those obligations. Accordingly, no

rational juror could find that these documents constitute notice under the Agreements.

The Subpoena does not constitute the form of written contractual notice required under

the Agreements. It is a subpoena served by Plaintiffs on Defendants under Fed. R. Civ. P. 45.

Because the October 2018 Letter and the Subpoena do not constitute written notice under

the Agreements, the Court does not need to address whether the two documents were provided

with appropriate promptness. In addition, the Court does not need to address the issue of

prejudice as it relates to the two documents.

The reality is that the July 2020 Letter is Plaintiffs’ attempt to provide written notice

under the Agreement. Plaintiffs’ own language supports this conclusion. The July 2020 Letter

provides that “[Plaintiffs] are providing notice of the above matter to [Defendants] pursuant to

the indemnification provisions of our November 24, 2004 Master Agreement with Cedar Point

104
Nortel Agreement, § 10; Cedar Point agreement, § 6.1; Sonus Agreement, § 7.

15
Communications Inc, June 10, 2011 Master Purchase Agreement with Sonus Networks, Inc., and

all applicable amendments and subsequent agreements. Please let me know when you are

available to discuss how we can effectively defend this claim.” 105 Plaintiffs knew how to

provide notice under the Agreements and the October 18, 2019 Letter and the Subpoena do not

constitute such written notice. The July 2020 Letter is the written notification of a “claim” under

the Agreements.

Thus, Defendants’ motion comes down to whether the July 2020 Letter was prompt, and

if not, whether the delay prejudiced Defendants. The Court finds that it was not prompt and that

Defendants were prejudiced by the delay.

There are no disputed facts with respect to the July 2020 Letter. Defendants do not

contest that it constitutes notice under the Agreements, just its promptness and prejudice. 106 The

July 2020 Letter was sent 31 months after the Litigation began, after expert reports were served,

and after dispositive motion briefing began. 107

New York courts have found that a 21-month delay in notice was not prompt. 108 That

21-month delay causes actual prejudice to an indemnitor if it deprives them of the right to control

the defense or settlement of the claim. 109 In Conergics, an indemnitee notified the indemnitor of

the claim after failing to get its tax audit dismissed on constitutional grounds and after the

Mexican government finished its review of the indemnitee’s records and made its tax

assessment. 110 There were still additional proceedings where the indemnitor could potentially

raise any issues it wanted to raise, but the Court found that the nearly two year delay, the

105
Ex. X.
106
Def. Op. Br., at
107
Litigation, D.I. 1, Litigation, D.I. 565, Pl. Ans. Br., at 27.
108
Conergics Corp. v. Dearborn Mid-West Conveyor Co., 43 N.Y.S.3d 6, 13 (N.Y. App. Div. 2016).
109
Id. at 16.
110
Id. at 17.

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completion of several important milestones in the case, and the indemnitor’s ability to settle the

case earlier had it been in control clearly established that the indemnitor had been prejudiced by

the delay. 111

Delaware courts have found that an 8-month delay was not prompt. 112 In Delaware,

whether notice is prompt is determined “in view of the facts and circumstances of the particular

case, and the mere lapse of time is not necessarily the determining factor.” 113

That test seems to invite the response that when notice is at issue, the matter cannot be

handled through summary judgment. Under the uncontested facts present here, however, the

July 2020 Letter was not prompt. Plaintiffs—sophisticated commercial entities represented by

counsel—sent the July 2020 Letter 31 months after the Amended Complaint was filed, which

referenced infringing equipment provided by Nortel and Cedar Point. Moreover, the July 2020

Letter was sent 22 months after the identification of accused products was served, 19 months

after initial infringement contentions and 5 months after final infringement contentions.

Plaintiffs do not staunchly contest that the July 2020 Letter was late. Rather, Plaintiffs

argue that their delay did not prejudice Defendants. Plaintiffs contend that when they sent the

July 20, 2020 Letter there were still outstanding discovery issues in the Litigation, trial had not

yet started, and the settlement discussions that led to the actual settlement had not begun. 114

The Nortel Agreement does not contain a “prejudice” clause, and so the delayed notice is

dispositive for this agreement. The Sonus Agreement and Cedar Point Agreement require that

any delay in notice prejudice the Defendants.

111
Id.
112
Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Rhone-Poulenc Basic Chems. Co., 1992 WL 22690, at *9 (Del.
Super. Jan. 16, 1992) (collecting cases).
113
Id.
114
Pl. Ans. Br., at 27.

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Here, the July 2020 Letter was sent 31 months after the Litigation began, on the eve of

trial (although the trial date was later pushed back), after most discovery was finished, after

claim construction and final contentions, and after dispositive briefing. The Court finds that this

prejudiced Defendants. That trial had not happened is true but must be discounted. Sprint and

Plaintiffs had already engaged in substantial settlement discussions, Plaintiffs had failed to have

the complaint dismissed, the claims in Sprint’s patents had already been construed, Plaintiffs had

already served their final invalidity contentions, and Plaintiffs had already undertaken motion

practice to disqualify Sprint’s expert testimony and for summary judgment. Short of notifying

Defendants after trial, it is hard to imagine a more prejudicial time that Plaintiffs could have

provided notice of indemnity obligations under the Agreements.

The Court also discounts the fact that the discussions that led to the Settlement

Agreement had not yet begun when the Plaintiffs sent the July 2020 Letter. Plaintiffs’ argument

on this point is undercut because they never notified Defendants that they began settlement

discussions. Plaintiffs only notified Defendants after an agreement was reached. 115 Further,

under Plaintiff’s theory, Defendants could never face prejudice. Plaintiffs’ position would mean

that Defendants would not be prejudiced in defending the action if they were notified after trial,

if the case ultimately settled. The Court finds that this is a less that valid interpretation of the

prejudice clauses, because it would render the “prejudice” clause meaningless and lead to an

absurd result. 116

The Court finds that Defendants notice of the litigation from outside sources is not

relevant here. This is a type of constructive notice is enough argument. As written, the

115
Ex. AO.
116
Bastion Rest. Grp. LLC v. Gaudelet, 2024 WL 5135977, at *4 (Del. Super. Dec. 17, 2024) (“Interpretations that
render a provision meaningless, or yield absurd results, must be rejected).

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Agreements require actual written notice and not constructive notice. The Agreements require

Plaintiffs to act, not Defendants. Plaintiffs were required to provide written notice to Defendants

of their potential indemnification obligations. At that point, Defendants may have become

obligated to defend and indemnify. The Agreements allow Plaintiffs to defend themselves at

their own cost. Absent Plaintiffs taking action to invoke contractual rights under the

Agreements, Defendants would have no reason to believe that they would be required to

indemnify Plaintiffs.

The Court also finds irrelevant that, after Plaintiffs sent the July 2020 Letter, Defendants

determined the claims in the Litigation were not indemnifiable. Plaintiffs argue that this shows

that Defendants were never going to defend the Litigation, so late notice did not prejudice them.

This argument is flawed based on the plain language of the Agreements. The Cedar Point

Agreement and Sonus Agreement forgive late notice, except if the Defendants’ “ability to

defend” any claim is prejudiced. 117 It is the prejudice to Defendants’ “ability” to defend that

matters, not prejudice in the outcome of the Litigation. It does not matter that Defendants may

not have defended the Litigation if they been provided timely notice. Their ability to defend was

prejudiced by the late notice.

Accordingly, Defendants Motion is GRANTED.

2. Control

Plaintiffs did not provide timely notice of the Litigation, and that delay prejudiced the

Defendants. This is case dispositive. The Court does not need to address the parties’ positions

on whether Plaintiffs gave the necessary control to Defendants in the Litigation. The Court,

117
Cedar Point Agreement, § 6.1; Sonus Agreement, § 7.

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however, will briefly address the control argument because it provides a separate basis for

granting summary judgment for Defendants.

The Court finds that the factual record in this civil action demonstrates that Plaintiffs did

not allow Defendants to control the litigation. The Agreements require that Plaintiffs give

“[Defendants] sole control of the defense thereof and any related settlement negotiations,” 118 or

tender “to [Defendants] (and its insurer) full authority to defend or settle any such claim,” 119 or

“allows [Defendants] to control, and cooperates with [Defendants] in, the defense and any

related settlement negotiations.” 120

Each Agreement requires some action by Plaintiffs to turn over control of the Litigation

or settlement discussions. There is no evidence in the record that Plaintiffs took any such action.

Plaintiffs controlled throughout, handling all phases of the Litigation. Additionally, Plaintiffs

did not allow Defendants to control settlement discussions. The record shows that after the

October 2018 Letter, Plaintiffs rejected three settlement offers and made at least three offers to

Sprint. 121 The record shows that Plaintiffs and Sprint reached a settlement agreement in

principle on April 20, 2021. 122 The record shows that the first time Plaintiffs notified

Defendants about any settlement discussions was not until April 28, 2021. No rational juror

could conclude, based on this record, that the Plaintiffs gave Defendants sole control, tendered

full authority to Defendants, or allowed Defendants to control the Litigation or settlement

discussions.

118
Cedar Point Agreement, § 6.1.
119
Sonus Agreement, § 7.
120
Nortel Agreement, § 10.
121
Ex. AJ.; Ex. AK; Ex. AL.
122
Ex. AN.

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At argument, Plaintiffs seemed to imply that Defendants had an affirmative duty to

request control of the Litigation. The plain language of the Agreements does not support

Plaintiffs’ position. The Agreements require Plaintiffs to initiate action. Plaintiffs are to provide

notice to Defendants. Plaintiffs are to allow or give control of the defense and settlement to

Defendants. The Agreements only require action by Defendants after the Plaintiffs provide

notice and tender control.

For this additional reason, the Defendants Motion is GRANTED.

B. PLAINTIFFS’ MOTION

Defendants Motion is case dispositive. Accordingly, Plaintiffs Motion is DENIED as

moot.

VI. CONCLUSION

For these reasons, Defendants Motion 123 is GRANTED. Plaintiffs Motion124 is

DENIED.

IT IS SO ORDERED

May 14, 2025
Wilmington, Delaware
/s/ Eric M. Davis
Eric M. Davis, President Judge

cc: File&ServeXpress

123
D.I. No. 159.
124
D.I. No. 160.

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