VLSI Technology LLC v. Intel Corporation
Docket No. 2022-1906 (https://cafc.uscourts.gov/opinions-orders/22-1906.OPINION.12-4-2023_2231550.pdf)
LOURIE, DYK, TARANTO
December 4, 2023
Brief Summary: Literal infringement finding affirmed for one of VLSI’s patent, infringement under DOE reversed for the other, with its damages award; DC denial of Intel’s pre-trial motion to add a license defense reversed. Summary: Intel appealed DC judgments of infringement of VLSI’s US 7,523,373 (literally) and 7,725,759 (under the doctrine of equivalents), and denial of its “pre-trial motion seeking to add a license defense to the case and to sever that defense from the rest of the case and stay its adjudication”. The ‘373 patent relates to integrated circuits and related methods, and Intel’s allegedly infringing products are its Haswell and Broadwell microprocessors. The ‘759 patent relates to systems for coupling two computer processors. Regarding the ‘373 patent, Intel argued that its accused products do not meet the “minimum voltage” limitation, but the FC panel disagreed (e.g., “the jury could reasonably credit VLSI’s evidence that the comparison presented by Intel was faulty”, one argument is “an argument for a claim construction, and Intel sought no claim construction on this point” (Avid Tech., FC 2016; Hewlett-Packard, FC 2003); “The ‘when’ claim language can reasonably be understood to mean simply ‘at the time that.’”) Regarding the DC’s finding of DOE-based (Sage, FC 1997; Warner-Jenkinson, US 1997; Festo, US 2002; Eli Lilly, FC 2019) infringement of the ‘759 patent, Intel argued “that prosecution history estoppel bars VLSI’s theory of equivalents” and that the evidence was legally insufficient. The FC panel did not address the prosecution history estoppel issue, but agreed VLSI evidence was legally insufficient. The FC panel explains that under the DOE “proof of equivalents must be limitation specific, not focused only on the claim as a whole” and “for the determination of whether a substitute element is only insubstantially different from a claimed element and hence an equivalent, a traditional formulation…asks ‘whether a substitute element matches the function, way, and result of the claimed element’…with the ‘way’ requirement of particular importance” (Spectrum, FC 2015 (“each of function, way, and result be ‘substantially the same’”); Union Paper-Bag, US 1877; Akzo, FC 2016 (“particularized testimony and linking argument as to the insubstantiality of the differences between the claimed invention and the accused device”)). The FC panel found VLSI’s equivalents contention insufficient and reversed the DOE-based finding of infringement because, e.g., its expert testimony “contains no meaningful explanation of why the way in which the request is made is substantially the same as what the claim prescribes” (e.g., “It is not enough, moreover, to say that the different functionality-location placements were a “design choice.”) Intel also appealed the damages award (~$1.5 billion), which the FC panel reviewed for an abuse of discretion (General Electric, US 1997; Finjan, FC 2010; reasonable royalty (35 USC 284; Aqua Shield, FC 2014; Finjan, FC 2018 (“reasonable royalty must seek to measure the value of the patented technology—it must be “apportion[ed]” to that value—by separating out and excluding other value in economic products or practices”); Lucent, FC 2009 (“hypothetical negotiation”)). Based on an error in VLSI’s testing and calculations, the damages award was set aside and a new trial ordered (e.g., “We cannot say that this error ‘could not have changed the result,’ namely, the precise amount of damages, so as to render it harmless.” Voda, FC 2008 (not harmless); “On remand, the opportunity to provide better explanations should be made available.”) Regarding Intel’s license defense, the FC panel found the DC’s denial was an abuse of discretion and requires a “fuller analysis of the governing law…or more fact-based litigation.”