By Eric Schweibenz
On December 21, 2010, the Federal Circuit issued its opinion in Spansion, Inc. v. Int’l Trade Comm’n, (2009-1460, -1461, -1462, -1465).  The Federal Circuit affirmed in all respects the ITC’s determinations, including those on infringement and the issuance of exclusion and cease and desist orders.

By way of background, on April 17, 2007, Tessera, Inc. (“Tessera”) filed a complaint alleging violations of Section 337 in the importation or sale of certain semiconductor chips or products containing the chips, which infringe U.S. Patent Nos. 6,433,419 (the ‘419 patent) and 5,852,326 (the ‘326 patent).  The complaint named Spansion, Inc. and Spansion, LLC (collectively, “Spansion”), Freescale Semiconductor, Inc. (“Freescale”), ATI Technologies, Ulc., ST Microelectronics N.V., and Qualcomm Inc. (“Qualcomm”) (collectively, “Appellants”) as respondents.  On May 21, 2007 the ITC instituted an investigation (Inv. No. 337-TA-605).  On December 1, 2008 ALJ Theodore R. Essex issued an Initial Determination (“ID”), finding no infringement with respect to the ‘419 and ‘326 patents, and determining that the patents were neither indefinite under 35 U.S.C. § 112, ¶ 2, nor anticipated under 35 U.S.C. § 102.  The Commission reviewed the ID in part, and on May 20, 2009, issued a Final Determination reversing the ALJ’s infringement determinations, finding instead that Appellants directly infringed the ‘326 patent and contributorily infringed the ‘419 patent.  The ITC further issued cease and desist and limited exclusion orders against Qualcomm, Freescale, and Spansion.

Claim Construction

The patents at issue address strain to semiconductor packages and printed circuit boards caused by temperature changes.  Since their components are ordinarily formed by different materials having different coefficients of thermal expansion, they expand and contract by different amounts with each power cycle, causing electrical contacts on one component to move relative to the contacts of another component to which it is attached.  This can ultimately lead to permanent damage of solder balls that electrically attach the terminals to the printed circuit board.  According to the Federal Circuit opinion, the patents address this problem by inserting a layer of compliant material that is “flexible, compressible, and/or elastic” between the chip and its backing element to provide the semiconductor package with the ability to accommodate relative movement between its components.

Appellants argued on appeal that the ITC incorrectly determined that the “moveable” limitation found in each of the asserted claims is not indefinite.  The ITC interpreted the movable 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 the displacement appreciably relieves mechanical stresses, such as those caused by differential thermal expansion which would be present in the electrical connections absent such displacement.” Appellants contended that (1) a person of ordinary skill would not understand whether movement of the terminals “appreciably relieve[d] mechanical stresses” as required by the ITC’s construction and thus would not be able to determine how much movement constitutes infringement, (2) the patents do not define any standard for measuring stress relief, and there is no “anchor” for determining when stress relief is “appreciable,” and (3) the patents fail to distinguish between the claimed movement and other unclaimed movement that is present in chip packages.  The Federal Circuit affirmed the ITC’s finding that the claims were not indefinite, focusing on the fact that two of Appellants’ own experts were able to discern “a dividing line between what an appreciable relief of stress is and what is not.”  The Federal Circuit further determined that the prosecution history “clearly differentiates claimed from unclaimed movement” by distinguishing solder ball deformation and “CTE matching” from claimed movement.  This further limited claimed movement to that caused by “external loads,” and excluded movement caused by “internal loads,” (i.e., movement caused by internal components that occurs regardless whether the semiconductor package is connected to the circuit board).  Finally, the Federal Circuit determined that although determining whether claimed movement occurred required an expert and detailed computer simulations, the difficulty of the infringement analysis did not necessarily speak to whether a claim is indefinite.

The Federal Circuit also affirmed the ITC’s construction of the claim limitation “bonding wires extending downwardly alongside said edges of said chip” included in claim 1 of the ‘326 patent.  The ITC construed the limitation to mean “along the side of the semiconductor chip, with the caveat that one of ordinary skill in the art would understand that through the wire bonding process, the bonding wires may extend up, outward and then downward toward the backing element.”  Appellants argued that this construction impermissibly broadened the claim limitation and rendered the term “alongside” superfluous because it does not specify how far from the semiconductor chip edge the bonding wires are allowed to fan out. Appellants’ position was that the specification and prosecution history require that the limitation define “alongside” as being “in close proximity” to the edges of the semiconductor chip.  The Federal Circuit determined that the specification to the ‘326 patent discloses only conventional wires connected through conventional wire bonding processes, wherein the bonding wires extend up, out and then down, and that Appellants conceded that all of the accused products use conventional wire bonding with wires extending up, our and away from the chip.  The Federal Circuit further held there was no clear disclaimer in the parent to the ‘326 patent of connections not in close proximity to the chip edge.


Before addressing infringement, the Federal Circuit reiterated that for factual findings, such as infringement, the Administrative Procedure Act requires the Federal Circuit to affirm ITC findings supported by “substantial evidence,” and therefore, the Federal Circuit could not substitute its judgment for the ITC’s finding, merely because the Federal Circuit believes its view is more reasonable.

As to infringement, Appellants argued that testing by Tessera’s expert, Dr. Qu, failed to show that the accused products either practiced the claimed movement or that such movement caused appreciable stress relief.  Appellants first argued that Dr. Qu’s fifty chosen samples were not representative of all accused products.  The Federal Circuit disagreed, and cited Appellants’ expert’s testimony that “the accused devices were similar in structure,” and found that substantial evidence supported the ITC’s findings that the tested products operate similarly with respect to the claimed invention.

With respect to Dr. Qu’s primary test to establish infringement, Appellants argued that: (1) loads were applied to the bottom of the solder balls instead of at the top; (2) the ITC improperly assumed that all observed stress relief was attributed to claimed movement; (3) the linearity assumption was a fatal defect in the test; and (4) the test was inherently unreliable because it was used only by Dr. Qu for the purpose of legal proceedings.  The Federal Circuit was not persuaded by these arguments.  The Federal Circuit found reasonable the ITC’s position that it was “undisputed that the PCB applies all of its force to the bottom of the solder ball,” and therefore “Dr. Qu properly simulated the external load being applied to the packages by determining displacement at the bottom of the solder balls, at least some of which is transferred to the terminals.”  As to the remaining issues, the Federal Circuit found that the claim construction did not require a quantification of external load, and therefore a linearity approximation (which assumes that movements due to simultaneous internal and external loads was equal to the sum of those movements when they are separately applied) was sufficient to show infringement.  The Federal Circuit further found that Tessera’s test was “based on industry-accepted modeling, was reliable evidence of infringement,” and that “this conclusion is not invalidated simply because the model was specifically tailored to the unique claim construction at issue.”

Tessera admitted that accused standalone semiconductor packages can only indirectly infringe the ‘419 patent, because its claims requires such packages to be mounted on printed circuit boards.  Appellants first argued that the ITC’s finding of indirect infringement should be reversed because evidence of direct infringement focused on Motorola who subsequently signed a license specifically authorizing use of the accused packages.  The Federal Circuit responded that evidence of indirect infringement was not limited solely to Motorola, and that Appellants can seek modification of remedial orders from the ITC.  Second, Appellants argued that the ITC ignored evidence that the standalone packages had non-infringing uses when mounted onto a printed circuit board with underfill or sockets.  The Federal Circuit determined that Appellants’ general assertions of alternative uses did not overcome Tessera’s prima facie case of indirect infringement, which clearly showed that at least the accused devices included solder balls and had no substantial non-infringing uses.  Finally, the Federal Circuit found that sufficient knowledge for contributory infringement was presumed from Appellants’ knowledge of the ‘419 patent through license negotiations and the absence of substantial non-infringing uses.


Several Appellants appealed the ITC’s finding that U.S. Patent No. 5,241,133 (the “Mullen patent”) and 5,216,278 (the “Lin patent”) did not anticipate Tessera’s asserted claims under 35 U.S.C. §102(e).  The relevant issue was whether the inventions claimed in Tessera’s asserted patents were conceived prior to the filing dates of the Mullen and Lin patents.  The Federal Circuit, after reviewing the record evidence that included an analysis of engineering notebooks and testimony, affirmed the ITC’s determination that the asserted patents had an invention date of June 1990, which is prior to the December 1990 filing dates of the Mullen and Lin patents, and are therefore not anticipated by those patents.

Injunctive Relief

Spansion argued that even if Appellants were liable for infringement, the ITC’s award of prospective injunctive relief should be vacated because the ITC failed to give meaningful consideration to the public interest consequences of the injunction.  Spansion specifically argued that the public interest inquiry in this context is similar to the traditional test for injunctive relief that district courts apply under eBay Inc. v. Mer-cExchange, L.L.C., 547 U.S. 388 (2006).

The Federal Circuit first noted that by statute, the ITC is required to issue an exclusion order upon finding a Section 337 violation absent a further finding that the effects of one of the statutorily-enumerated public interest factors dictate otherwise.  The enumerated public interest factors include: (1) the public health and welfare; (2) competitive conditions in the United States economy; (3) the production of like or directly competitive articles in the United States; and (4) United States consumers.  The Federal Circuit then considered the legislative history of the amendments to Section 337, and found that Congress intended injunctive relief to be the normal remedy for a Section 337 violation and that a showing of irreparable harm is not required to receive such injunctive relief.

Given the different statutory underpinnings for relief before the ITC in Section 337, the Federal Circuit concluded that eBay does not apply to ITC remedy determinations under Section 337, and the ITC is therefore not required to apply the traditional four-factor test for injunctive relief used by district courts when deciding whether to issue the equitable remedy of a permanent injunction.  Finally, the Federal Circuit noted that the ‘419 patent was subject to a final rejection in a reexamination, and that the ITC held it was premature to give the reexamination significant weight unless Tessera had exhausted its appeals.  The Federal Circuit determined that PTO reexaminations are not explicitly listed as a public interest factor in Section 337 proceedings, and the ITC therefore committed no error in omitting discussion of the reexamination from its analysis of public interest factors when fashioning its remedy to Appellants’ violation of Section 337.  For more discussion on this decision as it relates to reexaminations, please see December 22, 2010 post at the Patents Post-Grant Blog.

Based on the above, the Federal Circuit affirmed the ITC’s decision in all respects.