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Paul, Weiss Obtains Dismissal of Patent Infringement Claims Against Oaktree Capital Management

Paul, Weiss secured the dismissal of claims against our client Oaktree Capital Management, L.P. The claims, brought in the U.S. District Court for the Southern District of Texas by Taiwanese businessman Hsin Chi Su’s (a.k.a. “Nobu Su”), arose out of the bankruptcy proceedings of various Nobu Su-owned corporations that owned and operated shipping vessels. In 2010, those corporations obtained loans to finance the purchase of the ships, which served as collateral for the loans. An Oaktree affiliate later acquired nearly all of the corporations’ debt under the loan facilities.

In 2013, the corporations filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, which subsequently approved the sale of the ships and authorized Oaktree to “credit-bid” its debt in order to acquire them. Nobu Su then brought an adversary proceeding against Oaktree, among other defendants, alleging that the bankruptcy court’s order approving the ships’ sale improperly extinguished his right to protect patents he claimed to hold on certain technology used on the ships. Nobu Su sought a declaration that the order would not preclude him from suing for patent infringement and asserted various common law claims seeking compensation for the alleged loss of his intellectual property rights. Oaktree moved to dismiss the claims for failure to state a claim.

In its ruling granting Oaktree’s motion and dismissing Nobu Su’s claims in their entirety, the district court reasoned that Nobu Su’s claims impermissibly sought an advisory opinion and were otherwise deficient because the bankruptcy court’s order approving the sale of the ships did not affect any intellectual property rights Nobu Su claimed to have, and because Oaktree had not profited from the purchase of the ships. Nobu Su had been given “excessive latitude to show a shred of support for his claims,” but “[t]here is none,” the court wrote. The district court also ordered Nobu Su to pay Oaktree’s attorney’s fees.

The Paul, Weiss team included litigation partners Andrew Ehrlich and Gregory Laufer; and bankruptcy partners Alan Kornberg and Elizabeth McColm.

December 7, 2018

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