Comcast adds Entropic to MaxLinear lawsuit

Comcast has expanded its breach of contract lawsuit against chipmaker MaxLinear to include Entropic Communications LLC (Entropic LLC), an entity that recently took possession of several MaxLinear patents. Entropic LLC later used those patents as the basis of lawsuits filed against several cable operators, including Comcast, in February 2023.

Comcast further alleges that MaxLinear and Entropic "engaged in a scheme" to save Entropic's litigation against Comcast from a critical no-sue clause that is woven into agreements between Comcast and MaxLinear.

Entropic LLC, a "non-practicing entity" characterized by Comcast as a "patent litigation proxy" for MaxLinear, obtained ownership of certain MaxLinear patents and intellectual property, including patents related to Multimedia over Coax Alliance (MoCA) technology, in early 2021. In February 2023, Entropic Inc. filed multiple lawsuits in California against Comcast, Charter Communications, Cox Communications, Dish Network and DirecTV.

The Entropic LLC name is an homage to Entropic Communications Inc. (Entropic Inc.), a chipmaker and MoCA pioneer that MaxLinear acquired in 2015. Entropic LLC is using the trademark under license from MaxLinear. MoCA started out as a technology used to shuttle video over in-home coax for whole-home DVR services and later evolved to become an access network technology as well.

Related:Comcast sues MaxLinear for breach of contract

Comcast filed its original complaint against MaxLinear in May, claiming that the chipmaker is in breach of contract for allegedly attempting to terminate two agreements prematurely – a Vendor Support Agreement (VSA) and a Statement of Work (SOW) – that provide ongoing support for Comcast devices that use MaxLinear technology. Comcast told the court it has deployed to customers more than 14 million devices, including a pair of DOCSIS 3.1 gateways made by CommScope that contain MaxLinear chips.

Comcast said the SOW, which carries a completion date of July 31, 2026, provides the support necessary to ensure that devices with MaxLinear chips continue to work correctly and securely. Comcast said its VSA with MaxLinear is presently set to continue through July 31, 2026.

Key to those agreements with MaxLinear, Comcast told the court, is a "covenant not to sue" during the term of the VSA.

Comcast: MaxLinear's attempt to terminate deals designed to help Entropic

Comcast argues that MaxLinear tried to scuttle those agreements prematurely to circumvent the no-sue clause and to clear a smoother path for the Entropic LLC lawsuits filed against Comcast in February. Comcast contends that MaxLinear "retains a financial interest" in Entropic LLC's lawsuits against Comcast.

Related:Hitron teams with MaxLinear on DOCSIS 4.0 CPE

The cable operator also argues that the no-sue clause in Comcast's VSA with MaxLinear covers the patents in question "irrespective of who owns them."

MaxLinear and Entropic 'engaged in a scheme,' Comcast claims

MaxLinear and Entropic LLC, Comcast claimed, "engaged in a scheme to try to save the California Lawsuits from the Covenant through MaxLinear's purported termination of the Agreements."

Comcast's amended lawsuit builds on its multiple counts against MaxLinear, including allegations of breach of contract and a breach of good faith and fair dealing. Comcast also believes it's entitled to a declaratory judgment finding that MaxLinear's attempts to terminate its agreements are invalid and they remain in full force. Comcast also believes MaxLinear is required to indemnify Comcast for all losses and damages incurred in connection with the California lawsuits filed by Entropic LLC.

The amended suit cites Entropic LLC with a count of alleged "tortious interference" partly over claims that Comcast informed Entropic CEO Boris Teksler of the no-sue clause in April, prior to MaxLinear's attempt to terminate its agreements with Comcast prematurely. Comcast said Teksler represented on an April call with the operator that he was not aware of the VSA or the no-sue clause.

"Upon information and belief, Entropic participated in discussions with MaxLinear about the decision to terminate the VSA," Comcast claimed.

Eroding business relationship

The lawsuits are going through the courts amid an important time in the cable industry. Comcast and other cable operators are moving ahead with distributed access architectures and possible DOCSIS 4.0 upgrades – areas where both Broadcom and MaxLinear are expected to participate and contend for deals.

Comcast's complaint outlines how the business dynamics with MaxLinear shifted in the wake of the lawsuits filed by Entropic LLC.

Comcast told the court it was "considering ways in which to broaden and expand its MaxLinear relationship," but that notion seemed to dissolve amid the waves of court action.

According to Comcast, Will Torgerson, VP and GM of MaxLinear's Broadband Group, met in May with Comcast SVP Jon Cave and Torgerson asked how the Entropic LLC lawsuits might impact Comcast's and MaxLinear's relationship. Torgerson, Comcast said, told Cave that MaxLinear CEO Kishore Seendripu intended to terminate the VSA and "implied" that such termination was an attempt to scuttle the no-sue clause, thus freeing up Entropic LLC to pursue its patent infringement claims against Comcast.

Comcast noted that Torgerson stated that he thought Seendripu would abide by the terms of the VSA only if Comcast could convince the MaxLinear CEO that "there is a solid chance of business" between the companies.

For the moment, it's business as usual as Comcast's suit against MaxLinear and Entropic LLC winds through the courts.

On September 12, according to court documents, MaxLinear agreed to perform all services and obligations tied to the VSA and SOW until May 23, 2024: the full one-year notice period required under the SOW's termination provision. In turn, Comcast withdrew its request for a preliminary injunction against MaxLinear.

Comcast's motion to dismiss Entropic's California lawsuits remains outstanding.