Indemnification action survives motion to dismiss
Stark, M. J. Court denies defendant’s motion to dismiss for failure to state a claim where claims depend on contractual language at issue and language is susceptible of different interpretations.
Plaintiff seeks indemnification relating to a patent infringement suit in the Eastern District of Texas. The patents-in-suit involve a voltage regulator system for automobile alternators. Plaintiff seeks a declaratory judgment that cross-claim defendant (“defendant”) must indemnify plaintiff for its costs incurred in defending against the infringement action in Texas. The indemnification obligation allegedly arises out of the sale by defendant of certain voltage regulators which plaintiff used as components in alternators which it then sold. Defendant argues that it has no obligation to indemnify because it asserts that it only agreed to provide indemnification for patent infringement actions that resulted solely from the voltage regulators and not from the alternators which they contend are at issue in the Texas action. Plaintiff refutes defendant’s description of the scope of the Texas action and argues that the suit is all about voltage regulators since that is the subject of the patents-at-issue. The Court looks to the terms of the contract and determines that differing interpretations are possible and as such denies defendant’s motion to dismiss.
A copy of the full opinion is available here.
