Google v. Point Financial — Ninth Circuit Affirms Injunction Protecting Google’s Royalty-Free Chip Manufacturing License After Startup’s Collapse

Background

In 2016, Google entered into a Master Purchase Agreement with CNEX Labs, a semiconductor startup, to develop specialized computer chips — solid-state drive controllers — for Google’s data centers. Under the agreement, Google shared intellectual property with CNEX and, critically, secured a royalty-free license to independently manufacture the chips if CNEX ever ceased operations.

CNEX Labs eventually shut down. Before it did, Point Financial, Inc. — a venture lender — had extended loans to CNEX secured by CNEX’s assets, including its intellectual property. After CNEX’s closure, Point Financial asserted that its security interest in CNEX’s IP assets was superior to Google’s licensing rights under the Master Purchase Agreement. Point Financial began contacting Google’s chip vendors and third-party manufacturers, attempting to assert control over the IP and interfere with Google’s chip production.

Google sued in May 2025, seeking an injunction to stop Point Financial’s interference. The Northern District of California (Judge Beth Labson Freeman) granted a preliminary injunction in August 2025, finding that Google had shown a likelihood of success on its claim that the Master Purchase Agreement gave it a royalty-free license to manufacture chips independently after CNEX’s closure. The court enjoined Point Financial from contacting Google’s vendors or taking any action to interfere with Google’s licensing and manufacturing rights.

The Court’s Holding

The Ninth Circuit affirmed the district court’s preliminary injunction. The appeals court agreed that, on a plain reading of the Master Purchase Agreement, Google’s license to manufacture chips royalty-free survived CNEX’s shutdown. Point Financial’s secured creditor interest in CNEX’s assets did not override the contractual license Google had negotiated years earlier.

The court rejected Point Financial’s argument that its status as a secured creditor gave it superior rights to the intellectual property. The injunction barring Point Financial from contacting Google’s vendors and interfering with Google’s chip manufacturing operations remains in effect while the underlying case proceeds.

Key Takeaways

• IP licenses can survive a startup’s death. When a technology company licenses IP to a partner and then fails, the license may persist despite secured creditors’ claims to the startup’s assets. The specific contractual language matters enormously — Google’s agreement expressly contemplated CNEX’s closure.
• Secured creditors face limits on IP assets. A lender’s security interest in a startup’s IP portfolio does not automatically override pre-existing license grants. This echoes protections in Section 365(n) of the Bankruptcy Code, which shields IP licensees in bankruptcy — though this case did not involve formal bankruptcy proceedings.
• Tortious interference injunctions protect IP supply chains. When a third party contacts your vendors to assert IP rights that interfere with your manufacturing, a preliminary injunction can stop the interference before irreparable harm occurs.
• Careful IP licensing provisions are essential. Google’s foresight in negotiating explicit survival provisions in its 2016 agreement proved decisive. Companies that depend on startup-developed technology should insist on clear contractual protections for the scenario where their partner ceases operations.

Why It Matters

This case sits at the intersection of IP licensing, venture lending, and big-tech supply chain management. For technology companies that partner with startups to develop critical components, it validates the importance of negotiating robust IP license provisions that expressly survive the startup’s closure. For venture lenders, it is a cautionary tale: a security interest in a startup’s IP assets may be worth less than expected if the startup has already granted broad licenses to its partners.

The ruling also matters for the broader semiconductor industry, where complex multi-party relationships between chip designers, manufacturers, and end users create layered IP rights that can collide when one party fails. As chip supply chains grow more complex and startup failures remain common, disputes like this one are likely to recur.