Federal Circuit Revives VLSI Patent Claims Against Intel on Multicore Chip Technology

The April 14 opinion, authored by Chief Judge Kimberly Moore and joined by Circuit Judge Raymond Chen and Chief District Judge Thomas Kleeh of the Northern District of West Virginia, sitting by designation, revives VLSI's infringement case over U.S. Patent No. 8,566,836, which covers choosing one or more cores of a multicore processor to execute a task.

The district court, Judge Beth Labson Freeman, had granted Intel summary judgment of noninfringement on two grounds: extraterritoriality and rejection of VLSI's doctrine-of-equivalents theory. The panel reversed the extraterritoriality grant as to both the asserted method and apparatus claims, and reversed the doctrine-of-equivalents grant as to asserted apparatus claims 10, 11, 13, and 17, and remanded.

Central to the extraterritoriality ruling was a pretrial stipulation the parties entered early in the case, when VLSI was asserting eight patents. The stipulation deemed 70% of Intel products and associated activities meeting the claims' "technical requirements" — "without regard to geographic considerations" — to have a U.S. nexus "as required by each subsection of 35 U.S.C. § 271 and for determining any patent infringement damages."

The district court read the stipulation not to establish the required U.S. nexus because "[o]ne of the technical requirements necessary for the nexus to apply is that the claim limitations are met (in the United States)." Moore wrote that the reading "directly contradicts the stipulation, which requires the technical requirement determination be conducted 'without regard to geographic considerations.'"

The panel rejected Intel's position that the stipulation was merely "an agreed-upon accounting mechanism to simplify the calculation of damages." Moore wrote that "Section 271 is entirely about infringement, not damages," and that the "only reasonable interpretation of the stipulation is that it addresses U.S. nexus for infringement purposes as well as for damages calculations."

Moore also declined Intel's request to look past the stipulation's language. "Even if this strategic choice proved unwise in retrospect, we decline to look past the clear language of the stipulation to 'rescue' Intel from its decision to 'freely enter[]' an agreement 'which it later finds to be imprudently made,'" the opinion said, quoting Kearns v. Chrysler Corp.

On the apparatus claims, the panel separately held the district court improperly focused on where Intel's measuring was performed rather than "the undisputed fact that Intel imported and sold the accused products in the United States." Moore wrote that even under Intel's reading of the order, VLSI raised a genuine dispute as to whether the accused products include a performance measurement circuit with "dedicated, built-in circuitry" — citing testimony about built-in self-tests — sufficient to preclude summary judgment.

On VLSI's doctrine-of-equivalents theory, the panel ruled the district court erred in importing an "upon identifying" limitation into claim 10 via prosecution disclaimer, a limitation found in independent claims 1 and 20 but not claim 10. Moore wrote that the applicants' statements during prosecution did not clear the "high burden for prosecution disclaimer," noting that two of the three statements at issue "do not connect the words 'upon identifying' to claim 10 whatsoever."

As to a third statement citing claim 10 with a "see, e.g." signal, Moore wrote that the cite "is less than clear" and that because the statement is "at best, 'ambiguous or amenable to multiple reasonable interpretations, prosecution disclaimer is not established,'" quoting Tech. Props. Ltd. LLC v. Huawei Techs. Co.

The panel affirmed the district court's striking of net present value and value per unit damages theories offered by VLSI expert Dr. Sullivan for failing to comply with Northern District of California Patent Local Rule 3-8. A magistrate judge had found VLSI's contentions contained "scattershot references to Intel data or documents" that did not give Intel notice of VLSI's theory and promoted the "'type of inferential guesswork . . . [the] damages contentions are intended to avoid.'"

Moore wrote that VLSI's damages contentions had become a "recurring issue between the parties" and that the court had previously warned VLSI to "describe with specificity the bases for its damages claim." The panel found no abuse of discretion.

VLSI retains the ability to pursue damages through a separate expert, Mr. Chandler, whose theories were left untouched by the district court, the opinion noted.

VLSI was represented by Lucas M. Walker of MoloLamken LLP and a team from Irell & Manella LLP led by Morgan Chu. Intel was represented by Dominic E. Massa of Wilmer Cutler Pickering Hale and Dorr LLP.