01
Oct
By Barry Herman
Further to our September 1 post, on September 24, 2009, ALJ Theodore R. Essex issued the public version of his Final Initial and Recommended Determinations (“ID”) in Certain Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-630).  The Complainant in this investigation is Tessera, Inc. (“Tessera”) and the Respondents are Acer, Inc., Acer America Corporation, Elpida Memory, Inc., Elpida Memory (USA) Inc., Kingston Technology Corporation, Nanya Technology Corporation, Nanya Technology Corporation U.S.A., Powerchip Semiconductor Corporation, ProMOS Technologies, Inc., Ramaxel Technology, Ltd., Centon Electronics, Inc., SMART Modular Technologies, Inc., TwinMOS Technologies, Inc., and TwinMOS Technologies USA Inc. (collectively, “Respondents”).

In the 185-page ID, ALJ Essex determined that no violation of Section 337 had occurred in connection with the importation into the U.S., the sale for importation, or the sale within the U.S. after importation of certain semiconductor chips with minimized chip package size and products containing same in connection with certain claims of U.S. Patent No. 5,663,106 (the ‘106 patent), U.S. Patent No. 5,679,977 (the ‘977 patent), and U.S. Patent No. 6,133,627 (the ‘627 patent).  Further, ALJ Essex determined that a domestic industry exists that practices the patents-in-suit.

‘106 Patent

ALJ Essex construed the disputed claim terms of the ‘106 patent, including “top layer,” “terminals,” “thereon,” “encapsulant barrier,” “providing a protective barrier in contact with said top layer for protecting the terminals on the top layer from an encapsulation material,” “compliant layer,” and “above.”  In light of his constructions for these disputed terms, ALJ Essex determined that Tessera failed to demonstrate that Respondents’ accused products met the limitation of claim 1 for “a protective barrier in contact with the top layer.”  Additionally, ALJ Essex determined that Respondents’ accused products did not infringe under the doctrine of equivalents because Tessera’s construction of “array of exposed terminals thereon” to include solder pads “within” the package substrate would vitiate the purpose of including the claim term “thereon.”

With respect to validity, ALJ Essex determined that Respondents had not shown that any of the asserted claims of the ‘106 patent were invalid as anticipated, obvious, or indefinite.  First, ALJ Essex rejected Respondents’ assertions that the ‘106 patent was anticipated by U.S. Patent No. 5,218,759 (the “Juskey patent”) or U.S. Patent No. 5,136,366 (the “Worp patent”), because he found the Juskey and Worp patents did not disclose claim 1’s limitation of “a protective barrier in contact with the top layer.”  ALJ Essex also found that claim 1’s limitation of “an array of exposed terminals” was not disclosed by the Juskey patent.  Second, ALJ Essex rejected Respondents’ assertions that the ‘106 patent was anticipated by Japanese Publication No. 1992-84452 (the “Ohi reference”) and U.S. Patent No. 4,868,349 (the “Chia patent”), because he found that the Ohi reference and Chia patent do not disclose the “exposed terminals” limitation of claim 1.  ALJ Essex also found that claim 1’s limitation for a “top layer” that is “a spaced distance above said semiconductor chip” was not disclosed by the Chia patent.  Third, ALJ Essex rejected Respondents’ assertion that the ‘106 patent was obvious in view of Respondents’ submitted references, because he found that Respondents “merely cursorily” addressed three of four factual inquires related to non-obviousness and thus failed to satisfy the clear and convincing standard necessary to invalidate the ‘106 patent.  Finally, ALJ Essex determined that Respondents had not shown that the asserted claims were invalid as indefinite.

‘977 and ‘627 Patents

ALJ Essex first construed the disputed claim terms of the ‘977 and ‘627 patents, including “movable,” “compliant layer,” and “layer of compliant material.”  In light of these claim constructions, ALJ Essex determined that Tessera failed to demonstrate that Respondents’ accused products infringed the asserted claims of the ‘977 and ‘627 patents because he found Tessera’s evidence in support of infringement was unreliable.  In particular, ALJ Essex found “it difficult to find infringement on evidence that had admitted errors without quantitative or at least qualitative explanations of those errors.”  ALJ Essex also noted that it was not clear that Tessera’s expert relied on specific methods in his application of the modeling technique that “would stand up to peer review.”  Furthermore, ALJ Essex found that Tessera failed to prove infringement using other methodologies such as Baseline Comparison and Direct Loading methodologies.

With respect to validity, ALJ Essex determined that the Respondents had not shown that any of the asserted claims of the ‘977 and ‘627 patents were invalid as anticipated, obvious, or indefinite.  First, ALJ Essex rejected Respondents’ assertion that the ‘977 patent was invalid based on a § 102(b) on-sale bar, because he found that the priority date of the ‘977 patent was earlier than any of Respondents’ alleged anticipating references.  Further, ALJ Essex found that such alleged anticipating references did not trigger the on-sale bar.  Second, ALJ Essex rejected Respondents’ assertion that the ‘977 patent was anticipated by U.S. Patent No. 4,932,883 (the “Hsia patent”), because he found that the Hsia patent did not disclose the limitation of “a layer of compliant material disposed between said terminals and said chip and supporting at least some of said terminals.” Third, ALJ Essex rejected Respondents’ assertion that the ‘627 patent was anticipated by Japanese patent publication S61-137335 (the “Fukuda reference”), because he found that the Fukuda reference did not, among other things, “contain any teaching of the claimed movement or even displacement of its elements” as required by the asserted claims of the ‘627 patent.  Fourth, ALJ Essex rejected Respondents’ assertion that the ‘627 patent was anticipated by Japanese publication S61-137335 (the “Sakamaki reference”), because he found that, among other things, “the Sakamaki reference does not disclose a plurality of terminals disposed on said dielectric element for interconnection to a substrate and overlying said chip front surface.”  Regarding the issue of obviousness, ALJ determined that Respondents waived their arguments on obviousness because he found that Respondents failed to provide any argument regarding their prior art references.  ALJ Essex also concluded that Respondents failed to demonstrate that the asserted claims were invalid for indefiniteness.

Respondents’ Affirmative Defenses

With the exception of the Elpida Respondents, ALJ Essex determined that Respondents failed to establish license and patent exhaustion defenses.

Remedy and Bond

Regarding remedy, ALJ Essex recommended that in the event the Commission finds a violation of Section 337, a general exclusion order is not warranted.  Specifically, ALJ Essex determined that Tessera “failed to show that there is a widespread pattern of unauthorized use or that the source of the products is difficult to identify.”  ALJ Essex further determined that Tessera “conceded that it knew and or learned of the identity of the downstream manufacturers but chose not to name them.”

With respect to Tessera’s request for a limited exclusion order and cease and desist orders, ALJ Essex determined that if the Commission finds a violation of Section 337 any limited exclusion order and cease and desist orders should apply only to certain Respondents.

Regarding downstream products, ALJ Essex recommended that no downstream products be excluded in light of the EPROM factors.

With respect to bond during the Presidential review period, ALJ Essex determined that “a bond of 100% is not necessary” and recommended that any bond be set at a reasonable royalty rate as determined by Tessera’s license agreements.
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