Commission Enters Final Determination In Certain Semiconductor Chips With Minimized Chip Package Size (337-TA-605)
Further to our May 22 post, on June 3, 2009, the International Trade Commission issued the public version of its Opinion in Certain Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (Inv. No. 337-TA-605). In the Opinion, the Commission reversed ALJ Theodore R. Essex’s finding that respondents Spansion, Inc., Spansion, LLC (collectively “Spansion”), Qualcomm, Inc. (“Qualcomm”), ATI Technologies (“ATI”), Motorola, Inc. (“Motorola”), STMicroelectronics N.V. (“ST”), and Freescale Semiconductor, Inc. (“Freescale”) (collectively “Respondents”) had not violated Section 337. Specifically, the Commission reversed ALJ Essex’s finding that Respondents’ semiconductor chip packages and assemblies did not infringe certain claims of complainant Tessera, Inc.’s (“Tessera”) U.S. Patent Nos. 5,852,326 (the “‘326 patent”) and 6,433,419 (the “‘419 patent”). Additionally, the Commission reversed ALJ Essex’s determination that Tessera had waived its indirect infringement arguments, and found that Respondents had in fact contributorily infringed the ‘419 patent. The Commission also modified ALJ Essex’s invalidity analysis, although it affirmed his ultimate conclusion that the asserted patents are not invalid. Finally, the Commission denied Tessera’s request for a “tailored” General Exclusion Order (“GEO”) and instead issued (1) a Limited Exclusion Order (“LEO”) covering Respondents’ unlicensed infringing chip packages and Motorola‘s downstream products that incorporate Respondents’ unlicensed infringing chip assemblies and (2) cease and desist orders directed to those Respondents that maintain commercially significant inventory of infringing goods in the United States.
By way of background, the patents-in-suit are directed to semiconductor chip assemblies that use “solder balls” to connect the semiconductor chip’s package substrate to a printed circuit board. In particular, the asserted patents address certain problems caused by unwanted stress on the semiconductor chip package due to the differing rates of thermal expansion (“DTE”) of the materials used to construct the semiconductor chip, the package substrate, and the printed circuit board, respectively.
The asserted claims require that the package substrate terminals be “moveable” with respect to the semiconductor chip. Based on prosecution history estoppel, ALJ Essex construed the “moveable” limitation to require that “in the operation of the assembly, the terminals are capable of being displaced relative to the chip by external loads applied to the terminals, to the extent that displacement appreciably relieves mechanical stresses, such as those caused by DTE which would be present in the electrical connections absent such displacement.” ALJ Essex included the “external loads” requirement in his construction because during prosecution Tessera had disclaimed the natural movement of the package substrate terminals due to the thermal expansion itself – the invention was directed to specific structures that allowed the terminals to move in response to the thermal expansion of other components, in order to reduce the strain caused by DTE. Thus, in order to show infringement, Tessera needed to show that (1) the package substrate terminals are capable of being displaced with respect to the chip by external loads and (2) the displacement caused by the external loads appreciably relieves mechanical stresses caused by DTE.
In order to demonstrate infringement, Tessera had its expert, Dr. Qu, perform two separate experiments on Respondents’ accused packages. Dr. Qu began by creating “baseline” packages to compare to the accused packages. These baseline packages were purposely made rigid, so that there would be minimal movement between the terminals and the chip. ALJ Essex objected to these baseline packages, concluding that the baseline packages were “artificially stiff” and thus were guaranteed not to move as much as the accused packages. But the Commission disagreed and held that the baseline packages needed to be artificially stiff in order for Dr. Qu to perform a meaningful infringement analysis. The accused packages – which moved under external loads – needed to be compared to baseline packages that did not move under external loads, in order to determine if the accused packages moved in such a way that they relieved the mechanical stresses caused by DTE and infringed the asserted patents. Thus, the Commission held that Dr. Qu’s use of the “artificially stiff” baseline packages was appropriate and necessary.
Dr. Qu’s first experiment was to compare the behavior of the accused packages to the behavior of the baseline packages during “thermal cycling,” i.e., systematically raising and lowering the temperature to simulate real-world conditions. He found that the accused packages were more reliable and attributed this increased reliability to the accused packages’ superior ability to move under external loads. However, for this experiment, the Commission agreed with ALJ Essex and found that Dr. Qu had failed to demonstrate infringement.
Regarding Dr. Qu’s second experiment, the Commission found that it did prove infringement, and reversed ALJ Essex’s non-infringement determination. According to the Commission, the second experiment did not have the same problem as the first experiment because it eliminated the uncertainty caused by the differing coefficient of thermal expansion of the accused packages and the baseline packages. Accordingly, the Commission reversed ALJ Essex and found that the accused packages infringed the ‘326 and ‘419 patents.
In addition to reversing ALJ Essex’s finding of no direct infringement, the Commission also reversed his finding that Tessera had waived its indirect infringement arguments and found that Respondents contributorily infringed the asserted claims of the ‘419 patent. ALJ Essex had based his finding of waiver on the fact that Tessera had not set forth any argument on indirect infringement in its initial post-hearing brief, as required by the ground rules in the investigation. The Commission noted, however, that the Commission Investigative Staff had discussed indirect infringement in its initial post-hearing brief. According to the Commission, this preserved the issue even though Tessera itself had not discussed it. The Commission went on to find that Respondents contributorily infringed the ‘419 patent because there were no substantial non-infringing uses for the accused packages.
Additionally, while the Commission modified ALJ Essex’s validity findings, such modifications did not change the ultimate conclusion that the asserted patents were valid. Specifically, the Commission found that ALJ Essex had misapplied the “on-sale” bar provision of 35 U.S.C. § 102(b) by comparing the date of sale of a prior art device to the conception date of the asserted patents, rather than the “date of the application for patent in the United States” as mandated by the statute. 35 U.S.C. § 102(b). By making this faulty comparison, ALJ Essex determined that the device was not 102(b) prior art because it was not on sale more than one year before the conception date. The Commission reversed this finding because the device was on sale more than one year before the application date. Further, the Commission reversed ALJ Essex’s finding that the reference was not prior art under 35 U.S.C. § 102(g) because it was not “made in this country.” The Commission found that the prior art device had in fact been constructively reduced to practice in the U.S. through the filing of a U.S. patent covering the device. Nevertheless, even though it ruled that the device could be considered prior art under 102(b) and 102(g), the Commission found that it did not anticipate the claims of the ‘326 and ‘419 patents and thus did not invalidate them. Accordingly, the Commission did not disturb ALJ Essex’s ultimate determination that the asserted patents are not invalid.
Finally, with respect to remedy, the Commission denied Tessera’s request for a “tailored” GEO and instead issued an LEO covering Respondents’ infringing chip packages and Motorola’s downstream products containing infringing chip packages. From the beginning of the investigation, Tessera had been requesting that all downstream products – including those from entities other than the named Respondents – be subject to an LEO. However, after the investigation began, the Federal Circuit issued its opinion in Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340 (Fed. Cir. 2008), in which the court held that only named respondents could have their downstream products excluded under an ITC LEO. Thus, in responding to the Commission’s Notice of Review, Tessera for the first time requested a “tailored” GEO, which would allow it to exclude the downstream products of non-respondents despite the Federal Circuit’s holding in Kyocera. The Commission was willing to consider this late request because of the intervening change in the law, but it ultimately held that Tessera was not entitled to a GEO because Tessera could not meet the heightened burden of showing a difficulty in identifying the source of infringing products or a danger that Respondents might circumvent an LEO. Accordingly, the Commission denied Tessera’s request for a GEO and instead issued an LEO reaching Respondents’ infringing chip packages and named-respondent Motorola’s downstream products. The Commission also entered cease and desist orders directed to those Respondents that maintain commercially significant inventory of infringing goods in the U.S., namely Motorola, Qualcomm, Freescale, and Spansion.