Two recent cases were handed down by the Delaware Supreme Court:
Homestore, Inc. v. Tafeen and Qualcomm, Inc. v. Texas Instruments, Inc. Both cases are available on the Court’s Website.
In Homestore, ruling on a Motion to Stay Pending Appeal, the Delaware Supreme Court reviews the rationale behind the statutory framework of Section 145(e), which provides for advancement of indemnification payments. The court
discusses the public policy behind Section 145(e) and also discusses the standard of review when an appeal is made from the trial court’s denial of a Motion for Stay Pending Appeal. The court reviewed the four part test in applying the abuse of discretion standard. In this heavily litigated dispute, the court briefly described the extensive litigation history and the fact that the claimant has incurred over $4.5 million in legal fees and expenses defending various suits, and that it would not be appropriate to deny the advancement of indemnification of legal fees pending appeal.
The second case is Qualcomm, Inc. v. Texas Instruments, Inc. This appeal and the trial court decision it reviews were based on New York law, which is beyond the scope of this blog, but because it is a widely reported decision by the Delaware Supreme Court of earlier this month, I will briefly refer to it. The appeal considered whether a confidentiality provision in an agreement between Qualcomm and Texas Instruments was a material term of that agreement and whether Texas Instruments breached a covenant not to sue. The trial court held that, under New York law, the confidentiality provision was not material because the core of the agreement between the parties was not confidentiality. Thus, although Texas Instruments violated the confidentiality provision, Qualcomm could not terminate the agreement on that basis. The court also determined that Texas Instruments did not breach the covenant not to sue. Thus the agreement between the two parties, pursuant to which they share patents, will continue to remain in effect.