TCL, Canon Settle IP Suit Amid Roku Source Code Fight

By Dorothy Atkins
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Law360 (May 29, 2020, 3:52 PM EDT) -- Canon Inc. and TCL Electronics Holdings Ltd. told a Texas federal judge Friday they had cut a deal to resolve Canon's infringement suit over the TCL Roku TV, likely leaving unanswered whether Canon can get remote access to third-party Roku's source code during the coronavirus pandemic.

The parties told U.S. District Judge Rodney Gilstrap that they had reached a settlement in principle and asked the judge to stay all court deadlines while they finalize the terms of the deal and prepare dismissal papers.

The Japanese-based Canon hit the Chinese electronics maker with a patent infringement lawsuit in December 2018, accusing TCL's televisions with Roku OS of infringing its patents covering display methods and power management systems.

Although Roku Inc. is not a party to the suit, Canon asked for a subpoena seeking remote access to the Silicon Valley company's entire operating system source code so its experts and legal team can review it from their homes during the pandemic.

The request spurred Roku to file a motion to quash the subpoena in California federal court in May. Roku argued that providing Canon the remote access it requests would sacrifice security and expose its core assets and "crown jewels" to potential hackers.

Shortly thereafter, Hulu LLC, which has a partnership with Roku, filed an amicus brief in the California case backing Roku, arguing that granting the subpoena would set a dangerous precedent and expose all tech companies aiming to protect their data from malware or hackers.

Instead of deciding the matter, U.S. Magistrate Judge Joseph C. Spero transferred the subpoena dispute to Judge Gilstrap's docket, where the issue remained unresolved as of Friday.

Meanwhile, TLC had sought to move Canon's infringement suit to California, but Judge Gilstrap denied the request.

On May 26, TCL filed a petition for a writ of mandamus in the Federal Circuit, asking the appellate court to transfer the case to California. TCL argued that the dispute has no connection to Texas and the trial judge made multiple legal errors in denying its transfer request. That request is still pending.

Counsel and representatives for the parties did not immediately respond Friday to requests for comment.

The patents-in-suit are U.S. Patent Nos. 7,746,413; 8,078,767; 8,346,986; 8,713,206 and 7,810,130.

Canon is represented by Harry L. Gillam Jr. of Gillam Smith LLP; Yar R. Chaikovsky, David Okano, Alexander H. Lee and Andy Legolvan of Paul Hastings LLP; and Hiroyuki Hagiwara and Kyotaro Ozawa of Paul Hastings Foreign Law Joint Enterprise.

TLC is represented by Jennifer H. Doan, Joshua R. Thane, Cole Alan Riddell and Kyle Randall Akin of Haltom & Doan; Andrew N. Thomases, Andrew T. Radsch, Christopher M. Bonny, Scott S. Taylor and Lance W. Shapiro of Ropes & Gray LLP.

The cases are Canon Inc. v. TCL Electronics Holdings Ltd., case number 3:20-mc-80079, in the U.S. District Court for the Northern District of California and Canon Inc. v. TCL Electronics Holdings Ltd., case number 2:18-cv-00546, in the U.S. District Court for the Eastern District of Texas. TLC's appeal is In re: TCL Electronics Holdings Ltd., case number 20-129, in the U.S. Court of Appeals for the Federal Circuit.

--Additional reporting by Dani Kass. Editing by Peter Rozovsky.

For a reprint of this article, please contact reprints@law360.com.

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