Preview
FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022
NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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SAMSUNG ELECTRONICS CO., LTD., :
: Index No. 656312/2022
Plaintiff, : (Hon. Melissa A. Crane)
:
-against- :
: ANSWER AND COUNTERCLAIM
MPEG LA, L.L.C., :
:
Defendant. :
:
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Defendant MPEG LA, L.L.C. (“Defendant” or “MPEG LA”), by its attorneys Windels
Marx Lane & Mittendorf, LLP, as and for its Answer to the Summons and Complaint (the
“Complaint”):
1. Denies the allegations set forth in Paragraph 1 of the Complaint, except admits
that Section 7.2.2 of the Agreement Among Licensors (the “AAL”) was amended by its active
Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall
be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA
continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to
Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance
with the Licensing Administrator Agreement (the “LAA”) and AAL, as amended. For the true
and complete terms, provisions, and contents of the AAL and LAA, including any amendments
thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of
this action.
2. Admits the allegations set forth in Paragraph 2 of the Complaint, except denies
knowledge or information sufficient to form a belief with respect to the truth or falsity of
whether each of the patents is the result of years of work and substantial investments in research
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and development by Samsung and avers that Samsung knowingly and willfully continues to
practice the HEVC Standard even though it ceased to be a licensee under the patent pool in
question that includes patents that Samsung admits in its Complaint are necessary or essential to
practicing the HEVC Standard.
3. Admits the allegations set forth in Paragraph 3 of the Complaint, except denies
that Samsung remained a Party to the AAL following its termination as to itself effective March
27, 2020. For the true and complete terms, provisions, and contents of the AAL, including any
amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at
the trial of this action.
4. Admits the allegations set forth in the first sentence of Paragraph 4 of the
Complaint, except denies that Samsung remained a Party to the LAA following its termination as
to itself effective March 27, 2020. Denies the allegations set forth in the second and third
sentences of Paragraph 4 of the Complaint, except admits that, under the LAA, MPEG LA was
appointed and selected to be the Licensing Administrator under the LAA to, among other things,
perform the Services in accordance with the terms and conditions of the LAA including using
commercially reasonable best efforts to collect royalties from Licensees and to distribute
royalties to Licensors. Admits the allegations set forth in the fourth sentence of Paragraph 4 of
the Complaint. For the true and complete terms, provisions, and contents of the AAL and LAA,
including any amendments thereof, Defendant requests leave to refer to the originals, or a true
copy thereof, at the trial of this action.
5. Admits the allegations set forth in the first three sentences of Paragraph 5 of the
Complaint. Denies the allegations set forth in the remainder of Paragraph 5 of the Complaint,
except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to
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provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to
continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to
collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and
other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA
and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and
LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a
true copy thereof, at the trial of this action.
6. Admits the allegations set forth in the first two sentences of Paragraph 6 of the
Complaint. Avers that the allegations set forth in the remainder of Paragraph 6 of the Complaint
plead conclusions of law to which no response is required and, to the extent a response is
required, denies the allegations set forth therein and denies that Samsung acted properly, in good
faith, and dealt fairly in terminating the AAL and LAA as to itself and in conspiring and agreeing
with Access Advance LLC (“Access Advance”) as administrator of a competing patent pool to
do so and to join the competing patent pool exclusively while still a member of the MPEG LA
HEVC patent pool, except admits that Section 7.2.2 of the AAL was amended by its active
Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall
be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA
continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to
Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance
with the LAA and AAL, as amended. For the true and complete terms, provisions, and contents
of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to
the originals, or a true copy thereof, at the trial of this action.
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7. Denies the allegations set forth in Paragraph 7 of the Complaint, except admits
that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all
Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive
50% of their apportioned share of revenues and that MPEG LA continues to collect royalties
under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated
parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as
amended. For the true and complete terms, provisions, and contents of the AAL and LAA,
including any amendments thereof, Defendant requests leave to refer to the originals, or a true
copy thereof, at the trial of this action.
8. Denies the allegations set forth in Paragraph 8 of the Complaint, except admits
that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all
Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive
50% of their apportioned share of revenues, that MPEG LA as Licensing Administrator proposed
such amendment, and that MPEG LA continues to collect royalties under the HEVC Patent
Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their
apportioned share of revenues in accordance with the LAA and AAL, as amended, and further
admits that MPEG LA has not provided Samsung with a copy of the subject amendment to the
AAL and avers that the AAL does not require disclosure to a terminated Party of confidential
information or amendments and also avers that MPEG LA advised Samsung of the substance of
the amendment. For the true and complete terms, provisions, and contents of the AAL, including
any amendments thereof, Defendant requests leave to refer to the originals, or a true copy
thereof, at the trial of this action.
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9. Denies the allegations set forth in Paragraph 9 of the Complaint, except admits
that, beginning in Q3 2020, the HEVC Settlement Statements that MPEG LA provided to
Samsung contained footnotes stating that the payments to Samsung now reflected “the current
allocation per the HEVC Agreement Among Licensors as amended” and avers that, prior to
Samsung’s notice of termination as a Party to the AAL, it was discussed by email with the
HEVC Administrative Committee that then included Samsung that MPEG LA was considering a
future proposal to HEVC Licensors that would reduce a terminating Licensor Party’s royalty
share from pre-existing HEVC Licensees and in the Agenda of an HEVC Administrative
Committee meeting published to Samsung prior to Samsung’s notice of termination as a Party to
the AAL that remaining Licensor Parties can modify Licensor terms as to terminating Licensor
Parties. Samsung did not object or raise any concern with the contemplated proposal even though
it had already signed its agreement with Access Advance at that time to receive special treatment
under Access Advance’s competing HEVC patent pool.
10. Denies the allegations set forth in Paragraph 10 of the Complaint and denies that
MPEG LA breached the LAA.
11. Denies the allegations set forth in Paragraph 11 of the Complaint.
12. Avers that the allegations set forth in Paragraph 12 of the Complaint plead a
conclusion of law to which no response is required.
13. Avers that the allegations set forth in Paragraph 13 of the Complaint plead a
conclusion of law to which no response is required.
14. Admits the allegations set forth in Paragraph 14 of the Complaint.
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15. Admits the allegations set forth in Paragraph 15 of the Complaint, except avers
upon information and belief that Samsung also has a principal places of business at 85
Challenger Road, Ridgefield Park, New Jersey 07660.
16. Admits the allegations set forth in Paragraph 16 of the Complaint, except avers
that its principal place of business is in Greenwood Village, Colorado, a suburb of Denver.
17. Admits the allegations set forth in Paragraph 17 of the Complaint, except denies
that Samsung remained a “Party” or had a right to participate as a member of the Administrative
Committee following its termination as to itself of the AAL, and avers that MPEG LA is a third-
party beneficiary to the AAL. For the true and complete terms, provisions, and contents of the
AAL, including any amendments thereof, Defendant requests leave to refer to the original, or a
true copy thereof, at the trial of this action.
18. Admits the allegations set forth in Paragraph 18 of the Complaint, except denies
that Section 5.1 of the AAL is the sole section of the AAL and LAA concerning apportionment
or distribution of royalties to Parties, denies that the quoted language is a full and complete quote
of Section 5.1 and its subsections or is all that Section 5.1 and its subsections provide, and avers
that Section 7.2.2 of the AAL, as amended by its active Licensor Parties, provides that all Parties
which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of
their apportioned share of revenues in accordance with Section 5.1. For the true and complete
terms, provisions, and contents of the LAA and AAL, including any amendments thereof,
Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action.
19. Admits the allegations set forth in the first sentence of Paragraph 19 of the
Complaint. Denies the allegations set forth in the remainder of Paragraph 19 of the Complaint,
except admits that Section 6.1 of the AAL provides in full as follows: “Any amendments to this
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Agreement must be in writing, specifically reference this Agreement, and shall require at least a
three-fourths (3/4) vote of the members of the Administrative Committee, except for
amendments to: (1) allocations among Parties pursuant to Article 5 which shall require the
approval of a supermajority consisting of (i) eighty (80) percent of current Licensors and (ii) of
any group of Licensors that collectively received eighty (80) percent of the royalty distributions
over the twelve (12) month period preceding any such vote; (2) a change to this Section 6.1 or a
change to the right of Licensors to terminate pursuant to Section 7.2, which shall both require the
consent of all Licensors; and (3) as specified in Section 6.3.” For the true and complete terms,
provisions, and contents of the AAL, including any amendments thereof, Defendant requests
leave to refer to the original, or a true copy thereof, at the trial of this action.
20. Admits the allegations set forth in the first two sentences of Paragraph 20 of the
Complaint and avers that Section 7.2 of the AAL further provides that a terminating Party shall
have no right to participate as a member of the Administrative Committee upon termination.
Denies the allegations set forth in third sentence of Paragraph 20 of the Complaint, except admits
that Section 7.2.3 obligates terminated parties to continue to pay their share of expenses and fees
and avers that Section 7.2.2, as amended by its active Licensor Parties, provides that all Parties
which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of
their apportioned share of revenues in accordance with Section 5.1 for royalties received under
HEVC Patent Portfolio Licenses which include Patents owned by the terminating Party. Denies
the allegations set forth in the remainder of Paragraph 20 of the Complaint, except admits that
Sections 7.3 and 7.3.2 state: “The following provisions of this Agreement shall survive
expiration or termination of this Agreement: . . . The right to receive royalty distributions
pursuant to Section 5.1 to the extent that such right has accrued as of the date of expiration or
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termination.” For the true and complete terms, provisions, and contents of the AAL, including
any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof,
at the trial of this action.
21. Admits the allegations set forth in the first sentence of Paragraph 21 of the
Complaint. Denies the allegations set forth in the second sentence of Paragraph 21 of the
Complaint, except admits that, under the LAA, MPEG LA was appointed and selected to be the
Licensing Administrator under the LAA to, among other things, perform the Services during the
term and in accordance with the terms and conditions of the LAA. Denies the allegations set
forth in the remainder of Paragraph 21 of the Complaint, except admits that Section 6.3.1 of the
LAA contains the quoted language. For the true and complete terms, provisions, and contents of
the LAA, including any amendments thereof, Defendant requests leave to refer to the original, or
a true copy thereof, at the trial of this action.
22. Denies the allegations set forth in Paragraph 22 of the Complaint, except admits
that Section 7.2 of the AAL and Section 11.2 of the LAA each contain provisions concerning
voluntary termination after January 1, 2020 and Section 7.3 of the AAL and Section 11.5 of the
LAA contain survival provisions and admits that Section 11.5.2 of the LAA contains the quoted
language. For the true and complete terms, provisions, and contents of the LAA and AAL,
including any amendments thereof, Defendant requests leave to refer to the originals, or true
copies thereof, at the trial of this action.
23. Admits the allegations set forth in the first two sentences of Paragraph 23 of the
Complaint, except denies that Samsung acted properly, in good faith, and dealt fairly in
terminating the AAL and LAA as to itself and in conspiring and agreeing with Access Advance
as administrator of a competing patent pool to do so and to join the competing patent pool
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exclusively while still a member of the MPEG LA HEVC patent pool. Avers that the allegations
set forth in the remainder of Paragraph 23 of the Complaint plead a conclusion of law to which
no responses is required and, to the extent a response is required, denies the allegations set forth
therein, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties
to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to
continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to
collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and
other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA
and AAL, as amended, and to provide Samsung with quarterly settlement statements. For the
true and complete terms, provisions, and contents of the LAA and AAL, including any
amendments thereof, Defendant requests leave to refer to the originals, or true copies thereof, at
the trial of this action.
24. Admits the allegations set forth in the first sentence of Paragraph 24 of the
Complaint. Denies knowledge or information sufficient to form a belief with respect to the truth
or falsity of the allegations set forth in the remainder of Paragraph 24 of the Complaint.
25. Denies the allegations set forth in Paragraph 25 of the Complaint, except admits
that Samsung inquired about the decline in the amount of its royalty distributions in or about
February 2021 and admits that MPEG LA advised Samsung that Section 7.2.2 of the AAL was
amended by active HEVC Licensor Parties to reduce distributions to terminated Parties by 50%
after the revenue share calculation and that the amendment went into effect with respect to
reported licensee royalty accrual sales from July 1, 2020 forward.
26. Denies the allegations set forth in Paragraph 26 of the Complaint, except admits that
MPEG LA has not provided Samsung with a copy of the subject amendment to the AAL, avers
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that the AAL does not require disclosure to a terminated Party of confidential information or
amendments, avers that MPEG LA advised Samsung of the substance of the amendment and
respectfully refers the Court to the written communications between the parties for the contents
thereof.
27. Denies the allegations set forth in Paragraph 27 of the Complaint, except admits
that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all
Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive
50% of their apportioned share of revenues and that MPEG LA as Licensing Administrator
proposed such amendment and admits that MPEG LA is not a Party to the AAL and avers that
MPEG LA is a third-party beneficiary of the AAL.
28. Denies the allegations set forth in Paragraph 28 of the Complaint and denies that
MPEG LA executed any scheme, except admits that, beginning in Q3 2020, the HEVC
Settlement Statements that MPEG LA provided to Samsung contained footnotes stating that the
payments to Samsung now reflected “the current allocation per the HEVC Agreement Among
Licensors as amended” and avers that, prior to Samsung’s notice of termination as a Party to the
AAL, it was discussed by email with the HEVC Administrative Committee that then included
Samsung that MPEG LA was considering a future proposal to HEVC Licensors that would
reduce a terminating Licensor Party’s royalty share from pre-existing HEVC Licensees and in
the Agenda of an HEVC Administrative Committee meeting published to Samsung prior to
Samsung’s notice of termination as a Party to the AAL that remaining Licensor Parties can
modify Licensor terms as to terminated Licensor Parties. Samsung did not object or raise any
concern with the contemplated proposal even though it had already signed its agreement with
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Access Advance at that time to receive special treatment under Access Advance’s competing
HEVC patent pool.
29. Admits the allegations set forth in Paragraph 29 of the Complaint, except denies
the characterization of the footnote in the Settlement Statements as cursory and denies the
characterization of “terminated its involvement”.
30. Denies the allegations set forth in Paragraph 30 of the Complaint.
31. Denies the allegations set forth in Paragraph 31 of the Complaint.
32. Avers that Paragraph 32 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein.
33. Avers that Paragraph 33 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein.
34. Avers that Paragraph 34 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein.
35. Avers that Paragraph 35 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein.
36. Avers that Paragraph 36 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein.
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AS AND FOR AN ANSWER TO THE FIRST CAUSE OF ACTION
37. In response to the allegations set forth in Paragraph 37 of the Complaint, repeats
and realleges its responses to Paragraphs 1 through 36 of the Complaint, as if fully set forth
herein.
38. Avers that Paragraph 38 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein, except admits the LAA is a contractual agreement, that MPEG LA is a party to the LAA,
and that Samsung was a Party to the LAA prior to its termination as to itself. For the true and
complete terms, provisions, and contents of the LAA, including any amendments thereof,
Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action.
39. Avers that Paragraph 39 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties
to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to
continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to
collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and
other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA
and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and
LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a
true copy thereof, at the trial of this action.
40. Avers that Paragraph 40 of the Complaint pleads a conclusion of law to which no
response is required and, to the extent a response is required, denies the allegations set forth
therein.
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41. Denies the allegations set forth in Paragraph 41 of the Complaint, except admits
that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all
Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive
50% of their apportioned share of revenues and that MPEG LA continues to collect royalties
under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated
Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as
amended. For the true and complete terms, provisions, and contents of the AAL and LAA,
including any amendments thereof, Defendant requests leave to refer to the originals, or a true
copy thereof, at the trial of this action.
42. Denies the allegations set forth in Paragraph 42 of the Complaint.
AS AND FOR AN ANSWER TO THE SECOND CAUSE OF ACTION
43. In response to the allegations set forth in Paragraph 43 of the Complaint, repeats
and realleges its responses to Paragraphs 1 through 42 of the Complaint, as if fully set forth
herein.
44. Denies the allegations set forth in Paragraph 44 of the Complaint.
45. Denies the allegations set forth in Paragraph 45 of the Complaint.
46. Denies the allegations set forth in Paragraph 46 of the Complaint.
47. Denies the allegations set forth in Paragraph 47 of the Complaint.
Headings
48. Avers that the unnumbered headings/titles in the Complaint are improper and, as
such, denies any and all allegations set forth therein.
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AS AND FOR A FIRST
AFFIRMATIVE DEFENSE
49. The Complaint, or one or more purported causes of action therein, fails to state a
cause of action.
AS AND FOR A SECOND
AFFIRMATIVE DEFENSE
50. The Complaint is defective for non-joinder of parties who are necessary and/or
indispensable. Specifically, Samsung failed to join any of the Licensors who are Parties to the
AAL and who voted, or had the right to vote, to amend the AAL. Accordingly, adequate relief is
not possible without these Licensor Parties because they, not MPEG LA, are the entities that
approved the amendment to the AAL and may be affected by any determination as to the validity
or effectiveness of the amendment to the AAL.
AS AND FOR A THIRD
AFFIRMATIVE DEFENSE
51. Samsung’s Second Cause of Action for breach of the implied covenant of good
faith and fair dealing must be dismissed because it is duplicative of Samsung’s First Cause of
Action for breach of contract. Both claims seek the same relief and rely on the same set of
underlying allegations, namely that the amendment to the AAL is improper and invalid.
AS AND FOR A FOURTH
AFFIRMATIVE DEFENSE
52. Samsung’s First Cause of Action for breach of the LAA must be dismissed
because itis indisputable that MPEG LA continues to distribute royalty revenue in accordance
with Section 7.2.2 of the AAL, as amended by its active Licensor Parties, and MPEG LA could
not have breached the LAA by complying with the requirements of the AAL.
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AS AND FOR A FIFTH
AFFIRMATIVE DEFENSE
53. Samsung is barred from recovering damages, in whole or in part, from MPEG LA
because the losses and damages allegedly sustained by Samsung, if any, were not proximately
caused by any acts of MPEG LA but by the permissible amendment of the AAL by its active
Licensor Parties.
AS AND FOR A SIXTH
AFFIRMATIVE DEFENSE
54. Samsung’s Second Cause of Action for breach of the implied covenant of good
faith and fair dealing must be dismissed because MPEG LA has at all times acted in good faith.
AS AND FOR A SEVENTH
AFFIRMATIVE DEFENSE
55. Samsung is barred from the relief sought in the Complaint, in whole or in part, by
reason of its unclean hands.
AS AND FOR AN EIGHTH
AFFIRMATIVE DEFENSE
56. Following its termination of the AAL and LAA as to itself, Samsung ceased to be
a Party under the AAL and the LAA and ceased to have membership on the Administrative
Committee under the AAL, by the terms of those agreements. As such, Samsung had no right to
vote with respect to the subject amendment of the AAL.
AS AND FOR A NINTH
AFFIRMATIVE DEFENSE
57. The subject amendment to the AAL was not an amendment to allocations among
the Parties pursuant to Article 5 and was properly approved by at least three-fourths vote of the
members of the Administrative Committee under the AAL, but even if the subject amendment
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were found to be an amendment to allocations among the Parties pursuant to Article 5, the
subject amendment was approved by the supermajority of Licensor Parties required by the AAL.
AS AND FOR A TENTH
AFFIRMATIVE DEFENSE
58. If Samsung has suffered any damages, which Defendant expressly denies, such
damages were caused, aggravated and/or contributed to by Samsung’s failure to take reasonable
efforts to mitigate damages, and any award made to Samsung must be reduced in such proportion
to the extent that the damages complained of were caused, aggravated and/or contributed to by
said failure to mitigate damages.
AS AND FOR AN ELEVENTH
AFFIRMATIVE DEFENSE
59. The claims set forth in the Complaint are barred in whole or in part by the
doctrines of waiver, laches, and estoppel or by applicable statutes of limitations.
AS AND FOR A TWELFTH
AFFIRMATIVE DEFENSE
60. Samsung is not entitled to attorney’s fees in this action, and has set forth no basis
for the recovery of attorney’s fees.
AS AND FOR A THIRTEENTH
AFFIRMATIVE DEFENSE
61. Defendant reserves the right to assert other defenses, as this action proceeds, up to
and including at the time of trial.
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COUNTERCLAIM
Defendant / Counterclaim Plaintiff MPEG LA, by its undersigned attorneys, as and for its
counterclaim against Plaintiff / Counterclaim Defendant Samsung, alleges:
The Parties
62. MPEG LA is a limited liability company organized and existing under the laws of
the State of Delaware with a principal place of business in Greenwood Village, Colorado.
63. Upon information and belief, Samsung is a corporation organized and existing
under the laws of the Republic of Korea having principal places of business at 416 Maetan 3-
dong, Yeongtong-gu, Suwoni-si, Gyeonggi-do 443-742, South Korea and 85 Challenger Road,
Ridgefield Park, New Jersey 07660.
FACTS APPLICABLE TO THE COUNTERCLAIM
Background
64. MPEG LA is the world’s leading packager and provider of one-stop licenses for
standards and other technology platforms. By entering into a license agreement with MPEG LA
for a particular patent pool, a licensee is licensed to make and sell royalty products using one or
more of the pooled patents in exchange for the payment of royalties. MPEG LA collects the
Preview
FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------x SAMSUNG ELECTRONICS CO., LTD., : : Index No. 656312/2022 Plaintiff, : (Hon. Melissa A. Crane) : -against- : : ANSWER AND COUNTERCLAIM MPEG LA, L.L.C., : : Defendant. : : ------------------------------------x Defendant MPEG LA, L.L.C. (“Defendant” or “MPEG LA”), by its attorneys Windels Marx Lane & Mittendorf, LLP, as and for its Answer to the Summons and Complaint (the “Complaint”): 1. Denies the allegations set forth in Paragraph 1 of the Complaint, except admits that Section 7.2.2 of the Agreement Among Licensors (the “AAL”) was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the Licensing Administrator Agreement (the “LAA”) and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 2. Admits the allegations set forth in Paragraph 2 of the Complaint, except denies knowledge or information sufficient to form a belief with respect to the truth or falsity of whether each of the patents is the result of years of work and substantial investments in research {12062475:13} 1 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 and development by Samsung and avers that Samsung knowingly and willfully continues to practice the HEVC Standard even though it ceased to be a licensee under the patent pool in question that includes patents that Samsung admits in its Complaint are necessary or essential to practicing the HEVC Standard. 3. Admits the allegations set forth in Paragraph 3 of the Complaint, except denies that Samsung remained a Party to the AAL following its termination as to itself effective March 27, 2020. For the true and complete terms, provisions, and contents of the AAL, including any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action. 4. Admits the allegations set forth in the first sentence of Paragraph 4 of the Complaint, except denies that Samsung remained a Party to the LAA following its termination as to itself effective March 27, 2020. Denies the allegations set forth in the second and third sentences of Paragraph 4 of the Complaint, except admits that, under the LAA, MPEG LA was appointed and selected to be the Licensing Administrator under the LAA to, among other things, perform the Services in accordance with the terms and conditions of the LAA including using commercially reasonable best efforts to collect royalties from Licensees and to distribute royalties to Licensors. Admits the allegations set forth in the fourth sentence of Paragraph 4 of the Complaint. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 5. Admits the allegations set forth in the first three sentences of Paragraph 5 of the Complaint. Denies the allegations set forth in the remainder of Paragraph 5 of the Complaint, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to {12062475:13} 2 2 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 6. Admits the allegations set forth in the first two sentences of Paragraph 6 of the Complaint. Avers that the allegations set forth in the remainder of Paragraph 6 of the Complaint plead conclusions of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein and denies that Samsung acted properly, in good faith, and dealt fairly in terminating the AAL and LAA as to itself and in conspiring and agreeing with Access Advance LLC (“Access Advance”) as administrator of a competing patent pool to do so and to join the competing patent pool exclusively while still a member of the MPEG LA HEVC patent pool, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. {12062475:13} 3 3 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 7. Denies the allegations set forth in Paragraph 7 of the Complaint, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 8. Denies the allegations set forth in Paragraph 8 of the Complaint, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues, that MPEG LA as Licensing Administrator proposed such amendment, and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended, and further admits that MPEG LA has not provided Samsung with a copy of the subject amendment to the AAL and avers that the AAL does not require disclosure to a terminated Party of confidential information or amendments and also avers that MPEG LA advised Samsung of the substance of the amendment. For the true and complete terms, provisions, and contents of the AAL, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. {12062475:13} 4 4 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 9. Denies the allegations set forth in Paragraph 9 of the Complaint, except admits that, beginning in Q3 2020, the HEVC Settlement Statements that MPEG LA provided to Samsung contained footnotes stating that the payments to Samsung now reflected “the current allocation per the HEVC Agreement Among Licensors as amended” and avers that, prior to Samsung’s notice of termination as a Party to the AAL, it was discussed by email with the HEVC Administrative Committee that then included Samsung that MPEG LA was considering a future proposal to HEVC Licensors that would reduce a terminating Licensor Party’s royalty share from pre-existing HEVC Licensees and in the Agenda of an HEVC Administrative Committee meeting published to Samsung prior to Samsung’s notice of termination as a Party to the AAL that remaining Licensor Parties can modify Licensor terms as to terminating Licensor Parties. Samsung did not object or raise any concern with the contemplated proposal even though it had already signed its agreement with Access Advance at that time to receive special treatment under Access Advance’s competing HEVC patent pool. 10. Denies the allegations set forth in Paragraph 10 of the Complaint and denies that MPEG LA breached the LAA. 11. Denies the allegations set forth in Paragraph 11 of the Complaint. 12. Avers that the allegations set forth in Paragraph 12 of the Complaint plead a conclusion of law to which no response is required. 13. Avers that the allegations set forth in Paragraph 13 of the Complaint plead a conclusion of law to which no response is required. 14. Admits the allegations set forth in Paragraph 14 of the Complaint. {12062475:13} 5 5 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 15. Admits the allegations set forth in Paragraph 15 of the Complaint, except avers upon information and belief that Samsung also has a principal places of business at 85 Challenger Road, Ridgefield Park, New Jersey 07660. 16. Admits the allegations set forth in Paragraph 16 of the Complaint, except avers that its principal place of business is in Greenwood Village, Colorado, a suburb of Denver. 17. Admits the allegations set forth in Paragraph 17 of the Complaint, except denies that Samsung remained a “Party” or had a right to participate as a member of the Administrative Committee following its termination as to itself of the AAL, and avers that MPEG LA is a third- party beneficiary to the AAL. For the true and complete terms, provisions, and contents of the AAL, including any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action. 18. Admits the allegations set forth in Paragraph 18 of the Complaint, except denies that Section 5.1 of the AAL is the sole section of the AAL and LAA concerning apportionment or distribution of royalties to Parties, denies that the quoted language is a full and complete quote of Section 5.1 and its subsections or is all that Section 5.1 and its subsections provide, and avers that Section 7.2.2 of the AAL, as amended by its active Licensor Parties, provides that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues in accordance with Section 5.1. For the true and complete terms, provisions, and contents of the LAA and AAL, including any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action. 19. Admits the allegations set forth in the first sentence of Paragraph 19 of the Complaint. Denies the allegations set forth in the remainder of Paragraph 19 of the Complaint, except admits that Section 6.1 of the AAL provides in full as follows: “Any amendments to this {12062475:13} 6 6 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 Agreement must be in writing, specifically reference this Agreement, and shall require at least a three-fourths (3/4) vote of the members of the Administrative Committee, except for amendments to: (1) allocations among Parties pursuant to Article 5 which shall require the approval of a supermajority consisting of (i) eighty (80) percent of current Licensors and (ii) of any group of Licensors that collectively received eighty (80) percent of the royalty distributions over the twelve (12) month period preceding any such vote; (2) a change to this Section 6.1 or a change to the right of Licensors to terminate pursuant to Section 7.2, which shall both require the consent of all Licensors; and (3) as specified in Section 6.3.” For the true and complete terms, provisions, and contents of the AAL, including any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action. 20. Admits the allegations set forth in the first two sentences of Paragraph 20 of the Complaint and avers that Section 7.2 of the AAL further provides that a terminating Party shall have no right to participate as a member of the Administrative Committee upon termination. Denies the allegations set forth in third sentence of Paragraph 20 of the Complaint, except admits that Section 7.2.3 obligates terminated parties to continue to pay their share of expenses and fees and avers that Section 7.2.2, as amended by its active Licensor Parties, provides that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues in accordance with Section 5.1 for royalties received under HEVC Patent Portfolio Licenses which include Patents owned by the terminating Party. Denies the allegations set forth in the remainder of Paragraph 20 of the Complaint, except admits that Sections 7.3 and 7.3.2 state: “The following provisions of this Agreement shall survive expiration or termination of this Agreement: . . . The right to receive royalty distributions pursuant to Section 5.1 to the extent that such right has accrued as of the date of expiration or {12062475:13} 7 7 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 termination.” For the true and complete terms, provisions, and contents of the AAL, including any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action. 21. Admits the allegations set forth in the first sentence of Paragraph 21 of the Complaint. Denies the allegations set forth in the second sentence of Paragraph 21 of the Complaint, except admits that, under the LAA, MPEG LA was appointed and selected to be the Licensing Administrator under the LAA to, among other things, perform the Services during the term and in accordance with the terms and conditions of the LAA. Denies the allegations set forth in the remainder of Paragraph 21 of the Complaint, except admits that Section 6.3.1 of the LAA contains the quoted language. For the true and complete terms, provisions, and contents of the LAA, including any amendments thereof, Defendant requests leave to refer to the original, or a true copy thereof, at the trial of this action. 22. Denies the allegations set forth in Paragraph 22 of the Complaint, except admits that Section 7.2 of the AAL and Section 11.2 of the LAA each contain provisions concerning voluntary termination after January 1, 2020 and Section 7.3 of the AAL and Section 11.5 of the LAA contain survival provisions and admits that Section 11.5.2 of the LAA contains the quoted language. For the true and complete terms, provisions, and contents of the LAA and AAL, including any amendments thereof, Defendant requests leave to refer to the originals, or true copies thereof, at the trial of this action. 23. Admits the allegations set forth in the first two sentences of Paragraph 23 of the Complaint, except denies that Samsung acted properly, in good faith, and dealt fairly in terminating the AAL and LAA as to itself and in conspiring and agreeing with Access Advance as administrator of a competing patent pool to do so and to join the competing patent pool {12062475:13} 8 8 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 exclusively while still a member of the MPEG LA HEVC patent pool. Avers that the allegations set forth in the remainder of Paragraph 23 of the Complaint plead a conclusion of law to which no responses is required and, to the extent a response is required, denies the allegations set forth therein, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended, and to provide Samsung with quarterly settlement statements. For the true and complete terms, provisions, and contents of the LAA and AAL, including any amendments thereof, Defendant requests leave to refer to the originals, or true copies thereof, at the trial of this action. 24. Admits the allegations set forth in the first sentence of Paragraph 24 of the Complaint. Denies knowledge or information sufficient to form a belief with respect to the truth or falsity of the allegations set forth in the remainder of Paragraph 24 of the Complaint. 25. Denies the allegations set forth in Paragraph 25 of the Complaint, except admits that Samsung inquired about the decline in the amount of its royalty distributions in or about February 2021 and admits that MPEG LA advised Samsung that Section 7.2.2 of the AAL was amended by active HEVC Licensor Parties to reduce distributions to terminated Parties by 50% after the revenue share calculation and that the amendment went into effect with respect to reported licensee royalty accrual sales from July 1, 2020 forward. 26. Denies the allegations set forth in Paragraph 26 of the Complaint, except admits that MPEG LA has not provided Samsung with a copy of the subject amendment to the AAL, avers {12062475:13} 9 9 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 that the AAL does not require disclosure to a terminated Party of confidential information or amendments, avers that MPEG LA advised Samsung of the substance of the amendment and respectfully refers the Court to the written communications between the parties for the contents thereof. 27. Denies the allegations set forth in Paragraph 27 of the Complaint, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA as Licensing Administrator proposed such amendment and admits that MPEG LA is not a Party to the AAL and avers that MPEG LA is a third-party beneficiary of the AAL. 28. Denies the allegations set forth in Paragraph 28 of the Complaint and denies that MPEG LA executed any scheme, except admits that, beginning in Q3 2020, the HEVC Settlement Statements that MPEG LA provided to Samsung contained footnotes stating that the payments to Samsung now reflected “the current allocation per the HEVC Agreement Among Licensors as amended” and avers that, prior to Samsung’s notice of termination as a Party to the AAL, it was discussed by email with the HEVC Administrative Committee that then included Samsung that MPEG LA was considering a future proposal to HEVC Licensors that would reduce a terminating Licensor Party’s royalty share from pre-existing HEVC Licensees and in the Agenda of an HEVC Administrative Committee meeting published to Samsung prior to Samsung’s notice of termination as a Party to the AAL that remaining Licensor Parties can modify Licensor terms as to terminated Licensor Parties. Samsung did not object or raise any concern with the contemplated proposal even though it had already signed its agreement with {12062475:13} 10 10 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 Access Advance at that time to receive special treatment under Access Advance’s competing HEVC patent pool. 29. Admits the allegations set forth in Paragraph 29 of the Complaint, except denies the characterization of the footnote in the Settlement Statements as cursory and denies the characterization of “terminated its involvement”. 30. Denies the allegations set forth in Paragraph 30 of the Complaint. 31. Denies the allegations set forth in Paragraph 31 of the Complaint. 32. Avers that Paragraph 32 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein. 33. Avers that Paragraph 33 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein. 34. Avers that Paragraph 34 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein. 35. Avers that Paragraph 35 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein. 36. Avers that Paragraph 36 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein. {12062475:13} 11 11 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 AS AND FOR AN ANSWER TO THE FIRST CAUSE OF ACTION 37. In response to the allegations set forth in Paragraph 37 of the Complaint, repeats and realleges its responses to Paragraphs 1 through 36 of the Complaint, as if fully set forth herein. 38. Avers that Paragraph 38 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein, except admits the LAA is a contractual agreement, that MPEG LA is a party to the LAA, and that Samsung was a Party to the LAA prior to its termination as to itself. For the true and complete terms, provisions, and contents of the LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 39. Avers that Paragraph 39 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 40. Avers that Paragraph 40 of the Complaint pleads a conclusion of law to which no response is required and, to the extent a response is required, denies the allegations set forth therein. {12062475:13} 12 12 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 41. Denies the allegations set forth in Paragraph 41 of the Complaint, except admits that Section 7.2.2 of the AAL was amended by its active Licensor Parties to provide that all Parties which terminate in accordance with Section 7.2 shall be entitled to continue to receive 50% of their apportioned share of revenues and that MPEG LA continues to collect royalties under the HEVC Patent Portfolio Licenses and continues to pay to Samsung and other terminated Parties 50% of their apportioned share of revenues in accordance with the LAA and AAL, as amended. For the true and complete terms, provisions, and contents of the AAL and LAA, including any amendments thereof, Defendant requests leave to refer to the originals, or a true copy thereof, at the trial of this action. 42. Denies the allegations set forth in Paragraph 42 of the Complaint. AS AND FOR AN ANSWER TO THE SECOND CAUSE OF ACTION 43. In response to the allegations set forth in Paragraph 43 of the Complaint, repeats and realleges its responses to Paragraphs 1 through 42 of the Complaint, as if fully set forth herein. 44. Denies the allegations set forth in Paragraph 44 of the Complaint. 45. Denies the allegations set forth in Paragraph 45 of the Complaint. 46. Denies the allegations set forth in Paragraph 46 of the Complaint. 47. Denies the allegations set forth in Paragraph 47 of the Complaint. Headings 48. Avers that the unnumbered headings/titles in the Complaint are improper and, as such, denies any and all allegations set forth therein. {12062475:13} 13 13 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 AS AND FOR A FIRST AFFIRMATIVE DEFENSE 49. The Complaint, or one or more purported causes of action therein, fails to state a cause of action. AS AND FOR A SECOND AFFIRMATIVE DEFENSE 50. The Complaint is defective for non-joinder of parties who are necessary and/or indispensable. Specifically, Samsung failed to join any of the Licensors who are Parties to the AAL and who voted, or had the right to vote, to amend the AAL. Accordingly, adequate relief is not possible without these Licensor Parties because they, not MPEG LA, are the entities that approved the amendment to the AAL and may be affected by any determination as to the validity or effectiveness of the amendment to the AAL. AS AND FOR A THIRD AFFIRMATIVE DEFENSE 51. Samsung’s Second Cause of Action for breach of the implied covenant of good faith and fair dealing must be dismissed because it is duplicative of Samsung’s First Cause of Action for breach of contract. Both claims seek the same relief and rely on the same set of underlying allegations, namely that the amendment to the AAL is improper and invalid. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE 52. Samsung’s First Cause of Action for breach of the LAA must be dismissed because itis indisputable that MPEG LA continues to distribute royalty revenue in accordance with Section 7.2.2 of the AAL, as amended by its active Licensor Parties, and MPEG LA could not have breached the LAA by complying with the requirements of the AAL. {12062475:13} 14 14 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 AS AND FOR A FIFTH AFFIRMATIVE DEFENSE 53. Samsung is barred from recovering damages, in whole or in part, from MPEG LA because the losses and damages allegedly sustained by Samsung, if any, were not proximately caused by any acts of MPEG LA but by the permissible amendment of the AAL by its active Licensor Parties. AS AND FOR A SIXTH AFFIRMATIVE DEFENSE 54. Samsung’s Second Cause of Action for breach of the implied covenant of good faith and fair dealing must be dismissed because MPEG LA has at all times acted in good faith. AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE 55. Samsung is barred from the relief sought in the Complaint, in whole or in part, by reason of its unclean hands. AS AND FOR AN EIGHTH AFFIRMATIVE DEFENSE 56. Following its termination of the AAL and LAA as to itself, Samsung ceased to be a Party under the AAL and the LAA and ceased to have membership on the Administrative Committee under the AAL, by the terms of those agreements. As such, Samsung had no right to vote with respect to the subject amendment of the AAL. AS AND FOR A NINTH AFFIRMATIVE DEFENSE 57. The subject amendment to the AAL was not an amendment to allocations among the Parties pursuant to Article 5 and was properly approved by at least three-fourths vote of the members of the Administrative Committee under the AAL, but even if the subject amendment {12062475:13} 15 15 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 were found to be an amendment to allocations among the Parties pursuant to Article 5, the subject amendment was approved by the supermajority of Licensor Parties required by the AAL. AS AND FOR A TENTH AFFIRMATIVE DEFENSE 58. If Samsung has suffered any damages, which Defendant expressly denies, such damages were caused, aggravated and/or contributed to by Samsung’s failure to take reasonable efforts to mitigate damages, and any award made to Samsung must be reduced in such proportion to the extent that the damages complained of were caused, aggravated and/or contributed to by said failure to mitigate damages. AS AND FOR AN ELEVENTH AFFIRMATIVE DEFENSE 59. The claims set forth in the Complaint are barred in whole or in part by the doctrines of waiver, laches, and estoppel or by applicable statutes of limitations. AS AND FOR A TWELFTH AFFIRMATIVE DEFENSE 60. Samsung is not entitled to attorney’s fees in this action, and has set forth no basis for the recovery of attorney’s fees. AS AND FOR A THIRTEENTH AFFIRMATIVE DEFENSE 61. Defendant reserves the right to assert other defenses, as this action proceeds, up to and including at the time of trial. {12062475:13} 16 16 of 29 FILED: NEW YORK COUNTY CLERK 07/18/2022 02:38 PM INDEX NO. 656312/2022 NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 07/18/2022 COUNTERCLAIM Defendant / Counterclaim Plaintiff MPEG LA, by its undersigned attorneys, as and for its counterclaim against Plaintiff / Counterclaim Defendant Samsung, alleges: The Parties 62. MPEG LA is a limited liability company organized and existing under the laws of the State of Delaware with a principal place of business in Greenwood Village, Colorado. 63. Upon information and belief, Samsung is a corporation organized and existing under the laws of the Republic of Korea having principal places of business at 416 Maetan 3- dong, Yeongtong-gu, Suwoni-si, Gyeonggi-do 443-742, South Korea and 85 Challenger Road, Ridgefield Park, New Jersey 07660. FACTS APPLICABLE TO THE COUNTERCLAIM Background 64. MPEG LA is the world’s leading packager and provider of one-stop licenses for standards and other technology platforms. By entering into a license agreement with MPEG LA for a particular patent pool, a licensee is licensed to make and sell royalty products using one or more of the pooled patents in exchange for the payment of royalties. MPEG LA collects the