Intel Corp. v. Broadcom Corp.

167 F. Supp. 2d 692, 2001 U.S. Dist. LEXIS 16506, 2001 WL 1191525
CourtDistrict Court, D. Delaware
DecidedOctober 9, 2001
Docket00-796-RRM
StatusPublished
Cited by24 cases

This text of 167 F. Supp. 2d 692 (Intel Corp. v. Broadcom Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Intel Corp. v. Broadcom Corp., 167 F. Supp. 2d 692, 2001 U.S. Dist. LEXIS 16506, 2001 WL 1191525 (D. Del. 2001).

Opinion

MEMORANDUM OPINION

McKELVIE, District Judge.

This is a patent case. Plaintiff Intel Corporation is a Delaware corporation with its principal place of business in Santa Clara, California. Defendant Broadcom Corporation is a California corporation with its principal place of business in Irvine, California.

On August 30, 2000, Intel filed a complaint in this court claiming that Broad-com is infringing one or more of the claims of five of its patents directly, by inducing others to infringe, and by committing acts of contributory infringement. The five Intel patents cover three different technologies that Intel alleges intersect in Broadcom’s high-speed networking and communications products. One of the patents relates to smart networking products, another relates to semiconductor chip packaging structures, and the last three relate to digital video encoding and decoding techniques. Intel alleges that Broad-com is using “Intel technology to build its business” and that virtually every Broad-com product infringes one or more of the five patents-in-suit.

On October 10, 2000, Broadcom moved to dismiss Intel’s complaint or, in the alternative, to transfer the action to the United States District Court for the Northern District of California. Broadcom argues that this court lacks personal jurisdiction over it, and in the alternative submits that even if the court finds that it has jurisdiction over Broadcom, the court should use its discretion to transfer the case pursuant to 28 U.S.C. § 1404(a). The parties have been conducting discovery in the matter for the past eleven months. On September 24, 2001, the court heard oral argument on Broadcom’s motion to dismiss or transfer. This is the court’s decision on that motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

The court draws the following facts from the complaint and the accompanying documents, deposition transcripts, and declarations that have been submitted by the *695 parties along with their briefs on the issues of jurisdiction and transfer.

A. The Parties

1. Intel Corporation

Intel is the world’s largest semiconductor chip manufacturer. It produces and sells chips to customers throughout the computing and communications industries that are used to run computers, servers, and networking and communications products. Intel owns a broad array of patents covering its proprietary technologies.

According to its December 31, 1999 Annual Report, Intel has approximately 70,-200 employees worldwide. Intel’s major products include microprocessors, chipsets, networking and communications products, and digital imaging and other personal computer peripherals.

2. Broadcom, Corporation

Broadcom was founded in 1991. Broad-com is a leading provider of semiconductor chips that enable broadband communications and networking of voice, video, and data services. Its key products include cable products, high-speed networking products, and semiconductor package configurations. More specifically, Broadcom designs, develops, and supplies complete “system-on-a-chip solutions” and related applications for digital cable set-top boxes, cable modems, high-speed local, metropolitan and wide area networks, digital subscriber lines (DSL), and various other high speed networking and communications products.

As of June 2001, Broadcom has approximately 2,700 employees. In the year 2000, Broadcom sold over 88.9 million units for a total of approximately $1.15 billion in revenues. It is estimated that “Broadcom chips are now in more than 80% of all cable modems, digital cable TV set-top boxes and local area network switches sold around the world.” Jay Palmer, The Barron’s 500, Barron’s, April 24, 2000, at 2. According to its CEO, Henry Nicholas, Broadcom’s “objective is to have chips in every single television set, every single telephone, and every single computing device worldwide.”

Broadcom designs its products in Arizona, California, Georgia, the Netherlands, and Singapore. The employees of Broad-com’s Digital Video Technology Group, Enterprise Switching Group, and Home Networking Group are located in facilities that Broadcom leases in Sunnyvale and San Jose, California.

Broadcom primarily sells its products through its direct sales force. The. Broadcom sales force is based out of offices in California, Texas, Massachusetts, Illinois, Maine, and Georgia. Broadcom does not sell its products directly to individual consumers. Rather, Broadcom sells its products to companies in the high speed communications market who then use Broadcom’s products as components in their own products, which they in turn sell to corporate or individual customers throughout the world. Many of Broad-com’s customers are well-known multi-na-tional corporations that have world-wide distribution networks. These customers include 3Com, Cisco Systems, Hewlett-Packard, Motorola, Nortel Networks, Pace Micro Technology, Samsung, Scientific-Atlanta, Apple Computer, Compaq, Dell, Gateway, Thomson CE, and Comcast Cable. While Broadcom does not instruct or direct where or to whom its customers may resell products containing Broadcom components, thousands of digital set-top boxes and cable modems that contain allegedly infringing Broadcom chips are sold each year in Delaware by Broadcom customers such as Motorola, Cisco Systems, Com21, and Scientific-Atlanta.

According to its 2000 Annual Report, Broadcom’s involvement with its custom *696 ers often goes beyond the mere selling of products. Broadcom’s business model calls for Broadcom to collaborate with its key customers to develop custom designed chips and then to help those customers design and develop products using Broad-com products. Accordingly, Broadcom assigns dedicated engineers to work with the engineers of their highest revenue customers to jointly develop semiconductor chips that are customized to work with that customer’s products. Broadcom has executed agreements relating to participation in technical exchanges, joint development, and joint promotional activities with many of its customers, including Apple, Dell, Gateway, Compaq, Hewlett-Packard, Microsoft, Nortel, Pace Micro Technology, Pioneer, Samsung, Scientific-Atlanta, Motorola, Thompson CE, and 3Com. Broad-com also has entered into indemnification agreements with its customers, promising to indemnify their customers for patent infringement lawsuits “[ajnywhere they may be sued.”

With the exception of Broadcom itself, Insight Electronics is the sole distributor of Broadcom products in the United States. Insight’s main office is located in San Diego, California. Insight does not have an office in Delaware. Greg Proven-zano, the President and CEO of Insight, stated in his declaration that as of the date this suit was filed, “Insight had not solicited any business for Broadcom in Delaware, had not received any orders for Broadcom products from companies in Delaware, had not made any sales of Broad-com products to customers in Delaware, and had not distributed any Broadcom products within Delaware.”

Broadcom is also represented by an independent sales representative, New Era Sales.

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Bluebook (online)
167 F. Supp. 2d 692, 2001 U.S. Dist. LEXIS 16506, 2001 WL 1191525, Counsel Stack Legal Research, https://law.counselstack.com/opinion/intel-corp-v-broadcom-corp-ded-2001.