VLIW Technology, LLC v. Hewlett-Packard Co.

Summary

The Delaware Supreme Court reversed dismissal of VLIW Technology’s claims against Hewlett-Packard and STMicroelectronics involving alleged breach of a technology license agreement, trade-secret misuse, and unfair trade practices. The court held that the complaint satisfied Delaware’s notice-pleading standard and that ambiguous contractual provisions concerning confidentiality and use in Hewlett-Packard products could not be resolved against the plaintiff on a motion to dismiss. The case was remanded for further proceedings.

Holdings

1. The complaint adequately stated a breach-of-contract claim because it alleged the existence of a contract, breach of an obligation imposed by that contract through unauthorized sharing and use of licensed technology, and resulting damages.
2. Dismissal was improper because the agreement's five-year confidentiality provision was reasonably susceptible to an interpretation under which a lesser confidentiality obligation continued after the heightened five-year obligation expired.
3. The complaint adequately alleged a breach of the provision limiting use of the licensed technology to H-P products because the agreement did not define H-P products and the allegations and attached exhibit reasonably supported an inference that the technology was used in a product bearing an ST designation rather than solely an H-P designation.
4. The trade-secret and unfair-trade-practice claims were reinstated because the Court of Chancery dismissed them on the premise that the breach-of-contract claim failed, and that premise was erroneous.

Questions Presented

1. Whether VLIW's complaint adequately alleged the existence of a contract, breach of contractual obligations, and resulting damages.
2. Whether the contractual confidentiality and Hewlett-Packard-product provisions were sufficiently ambiguous that dismissal under Rule 12(b)(6) was improper.
3. Whether VLIW's trade-secret and unfair-trade-practice claims should be reinstated after reversal of dismissal of the contract claim.

Disposition

reversed_and_remanded