Cbv, Inc v. Chanbond, LLC; Deirdre Leane; Ipnav, LLC

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 24-1780
____________
CBV, INC.,
Appellant
v.
CHANBOND, LLC; DEIRDRE LEANE; IPNAV, LLC
____________
On Appeal from the United States District Court
for the District of Delaware
(D.C. No. 1:21-cv-01456)
District Judge: Honorable Gregory B. Williams
____________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
May 19, 2025
____________
Before: PHIPPS, CHUNG, and ROTH, Circuit Judges
(Filed: July 21, 2025)
____________
OPINION*
____________
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

-- 1 of 13 --

2
PHIPPS, Circuit Judge.
In this dispute about the payment of proceeds from a patent infringement settlement,
the original patent holder did not receive the full amount of compensation that it believed
it was owed, and it sued the purchaser of the patents. After learning that the patent
purchaser paid millions of dollars from the proceeds of the settlement to a consultant, the
original patent holder attempted to add claims for unjust enrichment against that consultant.
But the original patent holder made that request four months after the deadline for
amending or supplementing pleadings, and the District Court denied that motion. Later, at
summary judgment, and after the proceeds from the patent infringement settlement had
been distributed, the District Court refused, on mootness grounds, to enter a declaratory
judgment on the meaning of a clause in the patent purchase agreement that affected the
compensation due to the original patent owner. In this appeal, the original patent holder
disputes those two rulings. For the reasons below, we will affirm the judgment of the
District Court.
I. BACKGROUND
A. The Roll Out of the Patent Farming Business
In early 2015, Deirdre Leane, a citizen of Ireland and lawful permanent resident of
the United States domiciled in Texas, was the sole member of two limited liability
companies. One of those, ChanBond, LLC, was created for the business of acquiring and
enforcing patents – a practice referred to by some as ‘patent farming’1 or, more
1 See Sean M. O’Connor, The Damaging Myth of Patent Exhaustion, 28 Tex. Intell. Prop.
L.J. 443, 462 (2020) (describing, in a history of patent practice during the antebellum
period, patent uses characterized by “both abusive, extortionist litigation and beneficial,
proactive business dealings” as “patent farming”).

-- 2 of 13 --

3
pejoratively, ‘patent trolling.’2 The other, IPNAV, LLC, was created for the business of
providing consulting services to patent farmers.
Around that same time, CBV, Inc., a Pennsylvania corporation with its principal
place of business in Carlisle, Pennsylvania, had applied for multiple patents related to the
delivery of high-speed data over cable systems. On April 9, 2015, with four of those
patents granted and three pending, CBV sold its rights to that intellectual property, along
with rights to other abandoned or expired patents, to ChanBond through a Patent Purchase
Agreement.
In return for those patent rights, ChanBond was obligated to compensate CBV based
on the ‘Net Recoveries’ received from the patents. The Patent Purchase Agreement entitled
CBV to receive 100% of the first $1 million of Net Recoveries and 50% of all Net
Recoveries thereafter. See Patent Purchase Agreement § 3.3.2 (App. 136). The agreement
– which designated CBV as the ‘Seller’ and identified ChanBond as the ‘Purchaser’ – also
defined ‘Net Recoveries’ as Gross Recoveries less several categories of costs and expenses:
[T]he total aggregate Gross Recoveries less the total aggregate amount of
costs and expenses incurred by or on behalf of Purchaser in connection with
the monetization, enforcement and/or sale of the Assigned Patent Rights
which are exclusively limited to: (a) the reasonable fees and expenses of
litigation counsel; (b) the reasonable fees and expenses of licensing
counsel[;] (c) the reasonable fees and expenses of any re-examination or
other patent prosecution counsel; (d) reasonable expert fees, court costs,
deposition costs and other reasonable costs and expenses related to the
maintenance, prosecution, enforcement, and licensing of the Patents; and
(e) the reasonable fees and expenses of any other advisors or agents . . . .
2 See Mark P. Gergen, John M. Golden & Henry E. Smith, The Supreme Court’s Accidental
Revolution? The Test for Permanent Injunctions, 112 Colum. L. Rev. 203, 243–44 (2012)
(“Defining the term ‘patent troll’ is difficult, but a lot of the concern centers around entities
that sit back while others make costly investments based on an apparent absence of relevant
patent rights, not knowing that the troll will assert a claim of infringement after designing
around the troll’s patent rights becomes much more expensive.”).

-- 3 of 13 --

4
Id. § 2.8 (App. 135). ‘Gross Recoveries’ was defined as “the Cash compensation received
by Purchaser solely from payments made by a third party in consideration for the licensing,
enforcement and/or sale of the Patents.” Id. § 2.7 (App. 135).
The same subsection of the Patent Purchase Agreement also included a provision
that gave CBV some degree of control over the costs and expenses that would be deducted
from Gross Recoveries to yield Net Recoveries. Specifically, CBV had a right of prior
approval for costs or expenses paid to affiliates or stakeholders of ChanBond:
Notwithstanding the above, any cost or expense which is paid to an Affiliate
of Purchaser or to a stakeholder of Purchaser shall require the prior approval
of Seller, such approval to not be unreasonably withheld.
Id. § 2.8 (App. 135); see also id. § 2.1 (App. 134) (defining a “Person[’s]” “Affiliate” as
“any Entity . . . that controls, is controlled by or is under common control with such
Person” and defining ‘control’ as “possession directly or indirectly of the power to direct
or cause the direction of the management and policies of an Entity,” or alternatively, an
entity with greater than 50% “of the voting equity interests of an Entity”).
The two LLCs owned by Leane then began working together to farm the patents
acquired from CBV, with ChanBond contracting with IPNAV for consulting services
regarding the patents. By the terms of the Advisory Services Agreement that they entered,
IPNAV’s compensation for those services was 22% of “any licensing fee, litigation
settlement fee, payment of damages or other remedies . . . collected by or made available
to [ChanBond] in respect of the IP Rights.” Advisory Services Agreement § 5 (App. 153);
see also id. § 1(a) (App. 152) (characterizing ‘IP Rights’ as “the intellectual property
owned or controlled by the Company [ChanBond], including without limitation, the patents
identified in Exhibit A” (presumably of the Patent Purchase Agreement, those being the
patents and patent applications purchased from CBV)).

-- 4 of 13 --

5
Because IPNAV’s compensation was a percentage of the fees and other revenues
generated from the patents, the amounts paid to IPNAV would reduce Net Recoveries, of
which CBV was entitled to a percentage. See Patent Purchase Agreement § 2.8 (App. 135)
(providing that Net Recoveries would equal Gross Recoveries subtracted by “costs and
expenses incurred by” ChanBond, including “the reasonable fees and expenses of any other
advisors or agents”); id. § 3.3.2 (App. 136) (stating CBV would receive “fifty percent
(50%) of all Net Recoveries”). And although ChanBond and IPNAV were both owned by
Leane, ChanBond did not seek or otherwise receive the prior approval of CBV to enter that
agreement.
B. Litigation on Several Fronts
In September 2015, ChanBond began enforcing the patents. It initiated thirteen
lawsuits in the District Court against eighteen parties, including providers of high-speed
data services, such as Comcast Corporation, Cox Communications, Inc., and Time Warner
Cable Inc., for infringing on the patents that ChanBond had purchased from CBV.
Shortly afterward, on October 27, 2015, Leane sold her interest in ChanBond to
UnifiedOnline, Inc.,3 a Delaware corporation that did not have its principal place of
business in Pennsylvania.4 After its sale to UnifiedOnline, ChanBond continued to use
IPNAV for consulting services.
The patent infringement litigation was consolidated into a single case, and it
progressed to discovery. In its written discovery responses, ChanBond did not mention or
3 In return for transferring full ownership in ChanBond to UnifiedOnline, Leane received
$5 million as well as 44,700,000 shares of UnifiedOnline common stock – roughly a 4.5%
interest in the corporation.
4 CBV alleges that UnifiedOnline’s principal place of business is in Virginia, while Leane
and IPNAV allege that it is in North Carolina.

-- 5 of 13 --

6
produce the Advisory Services Agreement. The defendants in that case did, however, learn
of the agreement – directly from Leane herself at her deposition on April 24, 2018.
Leane later believed that revealing that information for the first time in her
deposition hindered ChanBond’s likelihood of succeeding in its infringement case. And
with its compensation dependent on ChanBond prevailing in that litigation, IPNAV
attempted to unilaterally terminate the Advisory Services Agreement within a week of
Leane’s deposition, despite that agreement serving as the sole basis for the compensation
due to IPNAV from the patent farming. According to Leane, she took that step only after
ChanBond – which was then owned by UnifiedOnline and hence was not an affiliate of
IPNAV for purposes of CBV’s prior approval rights – had promised to enter into a renewal
agreement that would restore IPNAV’s 22% interest in the patent farming proceeds.
Over two years went by, however, without a renewal agreement, and on
September 30, 2020, Leane and IPNAV initiated arbitration proceedings against
ChanBond.
The underlying patent infringement case reached resolution before that arbitration
was completed. After a trial on the infringement claims, but before the jury returned a
verdict, ChanBond settled with the defendants for $125 million.
Because the arbitration was still ongoing, ChanBond could not determine how much
of those proceeds it would owe to IPNAV. And with uncertainty as to the amount owed to
IPNAV, ChanBond could not calculate Net Recoveries for purposes of compensating CBV.
Nonetheless, ChanBond made an initial distribution of $10 million to CBV. CBV believed
that it was owed much more – about $20.5 million more – but it nonetheless agreed to let
ChanBond wait until the conclusion of its arbitration with Leane before completing the
payment.

-- 6 of 13 --

7
Meanwhile, in the arbitration proceedings, Leane and IPNAV sought $27.5 million,
that is, 22% of the $125 million patent infringement settlement – the amount that would be
owed under the Advisory Services Agreement, if it remained in effect. ChanBond and
UnifiedOnline, however, asserted that they owed IPNAV nothing because without CBV’s
prior approval of the Advisory Services Agreement, that agreement was “a self-serving,
specifically prohibited affiliate transaction in the first place.” UnifiedOnline, Inc. &
ChanBond, LLC’s Answer to Deirdre Leane & IPNAV, LLC’s Demand for Arbitration &
Appl. for Temporary & Permanent Injunctive Relief 1–2 (App. 469–70).
Realizing that its compensation depended on the validity and applicability of the
Advisory Services Agreement, CBV then invoked the diversity jurisdiction of the District
Court to initiate this case against ChanBond for breach of contract. See 28 U.S.C.
§ 1332(a), (c); SodexoMAGIC, LLC v. Drexel Univ., 24 F.4th 183, 202 (3d Cir. 2022)
(explaining that the citizenship of a limited liability company is determined by the
citizenship of its members). In addition to seeking damages, CBV’s amended complaint
requested specific performance, injunctive relief, and a declaratory judgment as to the
meaning of its prior approval right. See 28 U.S.C. § 2201 (“In a case of actual controversy
within its jurisdiction, . . . any court of the United States . . . may declare the rights and
other legal relations of any interested party seeking such declaration . . . .”).
While CBV’s case was pending in the District Court, the arbitration panel issued a
decision. It reasoned that IPNAV’s attempt to terminate the Advisory Services Agreement
was ineffective, and under the terms of that agreement, ChanBond owed IPNAV $27.5
million. With that decision and only about $38 million remaining from the patent
infringement settlement, it became clear that ChanBond could not pay both IPNAV and

-- 7 of 13 --

8
CBV what they thought they were owed: $38 million could not cover payments of $27.5
million to IPNAV and $20.5 million to CBV.
Eight days after the arbitration decision, CBV filed a motion for a preliminary
injunction in this case to enjoin ChanBond from paying the arbitration award to IPNAV.
The next day, IPNAV and Leane sought to intervene, and the District Court permitted their
intervention. They then filed an answer with respect to CBV’s claims as well as two
counterclaims against CBV for unjust enrichment and a declaration as to the meaning of
the prior approval clause in the Patent Purchase Agreement.5 They also opposed CBV’s
motion for a preliminary injunction.
The District Court denied CBV’s motion for a preliminary injunction. It concluded
that CBV was not likely to succeed on the merits of its claim because the prior approval
clause in the Patent Purchase Agreement did not “grant CBV an unfettered right of consent
before ChanBond enter[ed] into any affiliate agreement.” CBV, Inc. v. ChanBond, LLC,
D.C. No. 1:21-cv-01456, slip op. at 11–12 (D. Del. Oct. 5, 2022), ECF No. 151 (App. 661–
62). CBV did not appeal the denial of its motion for a preliminary injunction. See
28 U.S.C. § 1292(a). On November 29, 2022, the District Court issued a scheduling order
that set January 6, 2023, as the deadline for amending or supplementing the pleadings. See
Fed. R. Civ. P. 16(b).
5 In their pleadings, IPNAV and Leane also included a crossclaim against ChanBond for
confirmation of their arbitration award under the Federal Arbitration Act. ChanBond filed
a counterclaim against them for a vacatur of the award. Those two arbitration-related
claims were later dismissed without prejudice by an order of the District Court pursuant to
Rule 41(a). See Fed. R. Civ. P. 41(a). The cross- and counter-pleadings were not amended
by the filing deadline set forth in the District Court’s Rule 16 scheduling order. Id. 16(b).
Thus, the dismissal of those claims was final. See Williams v. Tech Mahindra (Ams.) Inc.,
70 F.4th 646, 650 (3d Cir. 2023) (recognizing that where, “[i]nstead of amending his
pleading,” a party “elect[s] to stand on” a pleading that is dismissed without prejudice, that
decision “trigger[s] this Court’s appellate jurisdiction” (first citing 28 U.S.C. § 1291; and
then citing Weber v. McGrogan, 939 F.3d 232, 240 (3d Cir. 2019))).

-- 8 of 13 --

9
Without an injunction preventing the payment of the arbitration award to IPNAV,
ChanBond paid IPNAV $30 million – an agreed-upon amount that reflected the $27.5
million arbitration award plus attorney’s fees and arbitration costs. After that, CBV settled
the damages claims with ChanBond for $4 million in April 2023. Although that settlement
left open CBV’s requests for a declaratory judgment and specific performance against
ChanBond, CBV promised to hold ChanBond harmless in connection with those claims; it
wanted those claims to remain active only as a means of pursuing relief against IPNAV
and Leane:
CBV will not seek any monetary or other relief against ChanBond, and such
claims shall remain only because CBV believes they are necessary to recover
against the Leane Defendants. CBV will hold the ChanBond Releasees
harmless in connection with any counts that remain.
CBV, Inc. & ChanBond, LLC Settlement Agreement & Release of Claims § 4.2
(App. 941).
Within a month of that settlement, CBV moved for leave to amend its operative
complaint to add a claim against IPNAV and Leane for unjust enrichment. That motion,
however, was filed after the January 6 deadline in the scheduling order for amending or
supplementing the pleadings and two months before the scheduled trial date of July 17,
2023. See Fed. R. Civ. P. 16(b). CBV argued that there was the requisite good cause to
allow amendment over four months after that deadline. See id. 16(b)(4). The District Court
did not find good cause and denied that motion.
All parties except ChanBond then cross-moved for summary judgment. The District
Court resolved those motions by ruling against all requests for relief. In particular, it

-- 9 of 13 --

10
declined, on mootness grounds, to enter a declaratory judgment as to the meaning of the
prior approval clause.6
Through a timely notice of appeal, CBV invoked this Court’s jurisdiction. See
28 U.S.C. § 1291. It now argues that the District Court erred in two respects: by denying
its motion to further amend its complaint to add the unjust enrichment claim against
IPNAV and Leane, and by declining to enter a declaratory judgment on the meaning of the
prior approval clause.
II. DISCUSSION
A. The Denial of CBV’s Request to Add the Unjust Enrichment Claim
Against IPNAV and Leane
CBV argues that the District Court erred by denying its request to add an unjust
enrichment claim against IPNAV and Leane four months after the deadline set in the
Rule 16 scheduling order. See generally Fed. R. Civ. P. 16(b)(3)(A) (requiring the issuance
of a scheduling order that, among other things, “limit[s] the time to . . . amend the
pleadings . . . and file motions”). But a Rule 16 scheduling order is binding on the parties
and “may be modified only for good cause and with the [District Court]’s consent.” Fed.
R. Civ. P. 16(b)(4); see also 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,
Federal Practice and Procedure § 1522.2 (3d ed. May 20, 2025 update) (“[A]ny
scheduling order issued under Rule 16(b) and the timetable it establishes will be binding.”).
When challenged on appeal, the denial of such an order is reviewed for an abuse of
discretion. See E. Mins. & Chems. Co. v. Mahan, 225 F.3d 330, 339–40 (3d Cir. 2000).
Thus, to succeed, CBV must demonstrate both good cause for its request and an abuse of
discretion by the District Court.
6 As an alternative holding, the District Court ruled that the Patent Purchase Agreement did
not require CBV’s prior approval for the Advisory Services Agreement.

-- 10 of 13 --

11
But here, because the unjust enrichment claim that CBV attempted to add arose after
the commencement of the case,7 CBV could have pursued it in a separate civil action. Cf.
Morgan v. Covington Township, 648 F.3d 172, 178 (3d Cir. 2011) (“[R]es judicata does
not bar claims that postdate the filing of the initial complaint . . . .”); Fed. R. Civ.
P. 13(a)(1) (applying the compulsory counterclaim rule only to qualifying counterclaims
that, “at the time of [a pleading’s] service[,] . . . the pleader has against an opposing party”
(emphasis added)). And thus, even if there were good cause to allow the addition of the
unjust enrichment claim, it was still not an abuse of discretion for the District Court to deny
that motion. Cf. Mahan, 225 F.3d at 340 (holding that a district court did not abuse its
discretion in denying a “motion to amend [a plaintiff’s] complaint six months after the
amendment and joinder deadlines had expired”). Indeed, requests to supplement a pleading
are not granted as liberally as requests for amendment. See Lutter v. JNESO, 86 F.4th 111,
125 n.13 (“The standards for amendment and supplementation are similar, but they do not
conform exactly as more lenience is afforded to amendment.”); see also 6A Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1510
(3d ed. May 20, 2025 update) (suggesting that, among the “number of competing factors”
that “courts balance . . . to determine whether a supplemental pleading would be
appropriate,” a court may weigh the “advantage gained by disposing of the entire
controversy” against “the difficulty of trying the original and supplemental claims in one
action”). And in light of the resulting disruption from adding a new claim at the time of
CBV’s motion, which was “only a few weeks before the scheduled trial,” the District Court
7 Although CBV styled its request as one to amend its complaint to add a claim for unjust
enrichment against Leane and IPNAV, because the unjust enrichment claim was premised
on events that occurred after the filing of the original complaint, it was functionally a
request for leave to supplement, not amend, its pleading. See Lutter v. JNESO, 86 F.4th
111, 125 (3d Cir. 2023) (“[S]upplementation adds or alters allegations, claims, or prayers
for relief in the complaint based on events that occurred after the initiation of the lawsuit.”).

-- 11 of 13 --

12
did not abuse its discretion by denying the motion. Order Den. Pl.’s Mot. to File 2d Am.
Compl., CBV, Inc. v. ChanBond, LLC, D.C. No. 1:21-cv-01456 (D. Del. June 8, 2023),
D.C. ECF No. 28 (App. 672).
B. The Meaning of the Prior Approval Clause Is a Moot Inquiry.
CBV also contends that the District Court erred in determining that a declaratory
judgment on the meaning of the prior approval clause would be moot. But even supposing
that CBV had standing earlier in the litigation for declaratory relief, three intervening
events alter the redressability of that claim: the full distribution of IPNAV’s entitlement to
the proceeds from the patent infringement settlement; CBV’s settlement of its claims
against ChanBond related to the proceeds from the patent infringement settlement; and the
denial of CBV’s request to add an unjust enrichment claim against IPNAV and Leane.
Together, those developments demonstrate that the requested declaratory judgment would
not “provide conclusive resolution of a concrete controversy related to a prospective course
of action,” which is needed for a declaratory judgment to satisfy the redressability
requirement for Article III standing. Lutter, 86 F.4th at 129; see also Linda R.S. v. Richard
D., 410 U.S. 614, 618 (1973) (holding that a plaintiff lacks standing where the “relationship
between the alleged injury” and “the requested relief” would result only in a “speculative”
benefit); Gulden v. Exxon Mobil Corp., 119 F.4th 299, 305 (3d Cir. 2024) (“[T]he loss of
one or more of th[e] [three] elements [of standing] during the pendency of the litigation, if
established by the defendant, subjects the affected claims or requests for relief to potential
dismissal on mootness grounds.”). And without presently having Article III standing for
its declaratory judgment claim, CBV can avoid mootness only if one of the recognized
exceptions to mootness applies. But this case, which is not a class-action, does not involve
voluntary cessation, cf., e.g., FBI v. Fikre, 601 U.S. 234, 241–42 (2024) (concluding that

-- 12 of 13 --

13
removing a plaintiff from the No Fly List after he filed suit did not moot a case where the
government failed to “demonstrat[e] that it cannot reasonably be expected” to place him
on the list again in the future), nor is the requested declaratory judgment on the meaning
of the prior approval clause an issue capable of repetition yet evading review, cf., e.g., Neb.
Press Ass’n v. Stuart, 427 U.S. 539, 545–47 (1976) (holding that a trial court’s expired
order preventing members of the press from publishing statements prejudicial to a high-
profile defendant was capable of repetition, yet evading review, in the event he would need
to be retried). Accordingly, the District Court did not err in denying the requested
declaratory judgment on mootness grounds.8
III. CONCLUSION
The District Court did not abuse its discretion in denying CBV leave to file a
supplemental complaint, and it rightly denied CBV’s declaratory judgment claim as moot.
Therefore, we will affirm the judgment of the District Court.
8 CBV also challenges the District Court’s conclusion that the Patent Purchase Agreement
did not grant it a right of prior approval over the Advisory Services Agreement. As CBV’s
request for a declaratory judgment is moot, there are no grounds for addressing that
argument.

-- 13 of 13 --