In an order filed Monday, Judge Forrest denied summary judgment in what she initially called a “relatively straightforward breach of contract case” where the only issue to determine at trial was the amount of damages owed by the defendant. VoiceAge Corp., a developer of speech and audio compression technologies sued Defendant RealNetworks, Inc., an internet streaming media service known for its RealPlayer application, for unpaid royalties in New York State Court. The case was moved to federal court last summer based on diversity. Expounding on the complexities of the case, Judge Forrest stated that “[b]ased on the submissions now before the Court, it is clear that there is a factual dispute between the parties as to (1) whether royalties are properly calculated on a per download or a per channel basis, and (2) whether there is a difference between what constitutes a ‘download’ and what constitutes a ‘channel’ for purposes of that calculation.”
While the contract seemed straightforward, RealNetworks disputed the definitions and concepts behind the terms in the pricing structure and filed a brief in opposition to VoiceAge’s motion for summary judgment laying out that argument. In essence, RealNetworks states that the agreement charges a royalty “per Realtime Channel” but it was charged based on the number of end-user downloads it distributed to customers. In that brief, RealNetworks argued that the court could not yet award damages in light of this ambiguity:
Lacking any admissible evidence concerning the number of Realtime Channels made or used, VoiceAge has no choice but to ask the Court to simply “assume” that there is one Realtime Channel per RealPlayer download, and award damages accordingly. Bedrock New York Law, however, precludes the Court from making any such assumptions because “it is well-settled that an award of damages cannot be speculative in nature.” Hangzhou Silk Import and Export Corp., 2002 WL 2031591, *7.
Based on these contentions, Judge Forrest determined there was at least some issue of material fact regarding these terms to deny summary judgment. Judge Forrest’s February 26, 2013 Order lays out the essential factual issues of the case.