United States District Court, D. New Jersey
PNY TECHNOLOGIES, INC. Plaintiff,
NETAC TECHNOLOGY CO., LTD., Defendant.
OPINION & ORDER
STANLEY R. CHESLER, U.S.D.J
matter has come before the Court on the motion to confirm the
arbitration award by Defendant Netac Technology Co., Ltd.
(“Netac”), and the cross-motion to vacate the
arbitration award or stay confirmation by Plaintiff PNY
Technologies, Inc. (“PNY”). For the reasons that
follow, the motion to confirm will be granted, and the motion
to vacate will be denied.
this Court granted in part Netac's motion to compel
arbitration. The parties completed an arbitration process
and, on July 27, 2018, the Arbitrator issued the Final Award.
Netac now moves to confirm the Final Award, and PNY
cross-moves to vacate it.
contends that a portion of the Final Award should be vacated
and modified to exclude an award of $2.2 million in royalties
on a set of products that is the subject of a dispute (the
“Disputed Units.”) The parties dispute whether
the Disputed Units are COB products, not subject to
royalties, or PCBA products, subject to royalties. The
Arbitrator ruled that the Disputed Units are PCBA products,
subject to royalties, and awarded $2.2 million in royalties.
(Dickey Dec. Ex. H at 6-8.)
argues that the Arbitrator's basis for the award of $2.2
million is “completely irrational and not supported by
the record.” (Pl.'s Opp. Br. 10.) PNY states:
The decision is inherently irrational because it directly
contradicts Arbitrator Bassler's earlier, agreed-upon
ruling that COB units were not licensed or royalty-bearing
under the Settlement Agreement. The Arbitrator also lacked
any support in the record to determine that the units at
issue were in fact royalty-bearing PCBA units and not
royalty-free COB units.
(Pl.'s Opp. Br. 11.)
have misread the Final Award, which does not support either
of their two assertions: 1) the Final Award contradicts the
earlier ruling by the Arbitrator; and 2) the Arbitrator's
determination that the Disputed Units are PCBA products has
no basis in the evidence of record.
the first assertion, there is no dispute that the Arbitrator
had previously ruled that COB products are not subject to
royalties. PNY attempts to style the Final Award as doing a
180º turn, relying on the contrary proposition that COB
products are subject to royalties, but this is an incorrect
reading. The very first sentence of the section of the Final
Award at issue states: “I previously determined that
PCBA products, not COB products, generate royalties.”
(Dickey Dec. Ex. H at 6.) Nothing in the section that follows
contradicts that statement. There is simply no basis for
PNY's contention that the Arbitrator reversed himself on
this basic point. Instead, the Arbitrator examined the
evidence and made a factual determination that the Disputed
Units are PCBA products, subject to royalties. (Id.
at 7.) PNY has failed to persuade this Court that the Final
Award of $2.2 million for the Disputed Units contradicts any
of the Arbitrator's previous decisions.
the second assertion, again, it is not supported by the Final
Award. The Arbitrator explained the issue as follows:
I previously determined that PCBA products, not COB products,
generate royalties. PNY argues Netac is not entitled to $2,
214, 000.00 in royalties for COB units that PNY alleges have
been wrongly categorized as PCBA products. PNY contends that
the many technical distinctions between the PCBA and COB
products preclude Netac from trying to characterize any COB
products as PCBA ones. PNY argues, based on supply data, that
the units in question cannot be PCBA units. PNY argues the
evidence is insufficient to find that PNY sold PCBA products
sufficient to generate $2.24 million in royalties because the
supply records are more reliable than the sales records and
the supply figures cannot support the sales figures.
According to PNY, the PCBA royalties should not include $2.2
million because the supply data shows fewer PCBA products
than are recorded in the PNY sales data, and the supply data
is the more accurate way to calculate royalties.
Netac, on the other hand, argues that royalties are due for
these products because PNY's own sales receipts and
business records use the PCBA coding numbers for what PNY
itself says is COB product. As Netac points out, the PCBA
sales data that PNY produced to Netac was relied upon both at
the evidentiary hearing and by the parties' experts and
demonstrates the units in question are PCBA products and thus
(Dickey Dec. Ex. H at 6.) There is more to the decision, but
this section by itself demonstrates that PNY is incorrect in
its assertion that the “Arbitrator also lacked any
support in the record to determine that the units at issue
were in fact royalty-bearing PCBA units and not royalty-free
COB units.” (Pl.'s Opp. Br. 11.) As the section
just quoted makes clear, the Arbitrator relied on PNY's
sales data. His decision has a basis in evidence of record.
Furthermore, the Arbitrator went on to explain that PNY and
its expert had previously relied on the sales records, and
that PNY had now changed its position, arguing that its own
sales records were erroneous. The Arbitrator decided that
there was no basis to conclude that PNY's sales records
were erroneous, and that these records supported the award of
parties agree on the very limited scope of judicial review of
arbitration awards: “if an examination of the record
before the arbitrator reveals no support whatever for his
determinations, his award must be vacated.”
NF&M Corp. v. United Steelworkers of Am., 524
F.2d 756, 760 (3d Cir. 1975). While PNY has argued that the
record reveals no support for the decision to award $2.2
million for the Disputed Units, the ...