Powertech Technology, Inc. v. Tessera, Inc.

872 F. Supp. 2d 924, 2012 U.S. Dist. LEXIS 70630, 2012 WL 1835699
CourtDistrict Court, N.D. California
DecidedMay 21, 2012
DocketNo. C 11-6121 CW
StatusPublished
Cited by3 cases

This text of 872 F. Supp. 2d 924 (Powertech Technology, Inc. v. Tessera, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Powertech Technology, Inc. v. Tessera, Inc., 872 F. Supp. 2d 924, 2012 U.S. Dist. LEXIS 70630, 2012 WL 1835699 (N.D. Cal. 2012).

Opinion

ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND TO STRIKE (Docket No. 20)

CLAUDIA WILKEN, District Judge.

Defendant Tessera, Inc. moves to dismiss and to strike the claims brought [927]*927against it by Plaintiff Powertech Technology, Inc. (PTI). PTI opposes the motion. Having considered the papers filed by the parties and their oral arguments at the hearing, the Court DENIES Tessera’s motion.

BACKGROUND

On October 20, 2003, PTI and Tessera entered into a contract called Tessera Compliant Chip License Agreement (TCC License). Compl., Appendix A (TCC License). The TCC License allows PTI to use Tessera’s patents to make integrated circuit packages and to use or sell these products world-wide. Compl. ¶ 1; TCC License ¶ II.A. In return, PTI is obliged to make certain royalty payments to Tessera. See TCC License § III.

The TCC License states in part,
License Grant. Subject to ... Licensee’s payment of the fees and royalties stated herein ..., Tessera hereby grants Licensee a world-wide, non-exclusive, nontransferable, non-sublicensable, limited license to the Tessera Patents to assemble ICs into TCC Licensed Products and use or sell such TCC License Products.
Termination for Breach. Either party may terminate this Agreement due to the other party’s breach of this Agreement, such as failure to perform its duties, obligations, or other responsibilities herein ... The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof.
Governing Law.... Both parties shall use reasonable efforts to resolve by mutual agreement any disputes, controversies, claims or differences which may arise from, under, out of or in connection with this Agreement. If such disputes, controversies, claims or differences cannot be settled between the parties, any dispute resolution proceedings shall take place in the United States, but if either party files a claim in state or federal court, such claim shall be filed in the state or federal courts of California. Nothing herein shall 'alter or affect any other rights either party may have to redress any breach or act of the other party. Notwithstanding any provision herein, after the sixty (60) day cure period set forth in Paragraph VIII.B and notice of termination of this Agreement by one of the parties, either party may bring an action in the U.S. International Trade Commission.
No waiver. Any waiver, express or implied, by either of the parties hereto of any right hereunder or default by the other party, shall not constitute or be deemed a continuing waiver or a waiver of any other right or default. No failure or delay on the part of either party in the exercise of any right or privilege hereunder shall operate as waiver thereof, nor shall any single or partial exercise of such right or privilege preclude other or further exercise thereof or of any other right or privilege....

TCC License ¶¶ II.A, VIII.B, XIV.A, XIV.B.

PTI has performed its obligations under the TCC License, including paying its ongoing royalties to Tessera. Compl. ¶ 22.

In December 2007, Tessera initiated ITC Investigation No. 337-TA-630 (the 630 Investigation), accusing certain companies of infringing certain Tessera patents, including its 5,663,106 patent (’106 patent), [928]*928through the importation and sale of particular wBGA and uBGA products. Compl. ¶ 5. Tessera also simultaneously filed a civil action in the Eastern District of Texas, in which it asserted the same patents against the same defendants for the same products as in the ITC action. Complaint, Tessera, Inc. v. A-DATA Tech. Co., No. 07-534 (E.D.Tex. Dec. 7, 2007), Docket No. 1.1

PTI was not named as a respondent in the ITC action or defendant in the Texas action, but Powerchip Semiconductor Corp. (PSC), ProMos Technologies Corp., and Elpida Memory Inc. were. In related litigation, PTI has since asserted that these companies were among PTI’s customers for the accused products. See Opp. to Mot. to Dismiss, Powertech Technology, Inc. v. Tessera, Inc. (PTI I), Case No. 10-945 (N.D.Cal.), Docket No. 33; Powertech Technology, Inc. v. Tessera, Inc., 660 F.3d 1301, 1304 (Fed.Cir.2011).

In August 2009, the Administrative Law Judge (ALJ) in the 630 Investigation issued an initial determination, finding, among other things, that for uBGA products, “Tessera’s patent rights are exhausted as to those accused products purchased from Tessera’s licensees,” precluding any liability based on these products. Tessera v. ITC, 646 F.3d 1357, 1363 (Fed.Cir.2011) (summarizing the ALJ’s conclusions). On January 4, 2010, the ITC issued its final determination in the 630 Investigation, affirming the ALJ’s finding of patent exhaustion. Id. (summarizing the ITC’s holding).

On March 5, 2010, several months after the ITC issued its final determination in the 630 Investigation, PTI filed an action for declaratory relief in this Court. See Compl., PTI I, Docket No. 1. In that case, PTI sought declarations of non-infringement and invalidity of the '106 patent and maintained that it faced an imminent threat of injury because Tessera had accused PTI’s customers of infringement based on PTI-packaged products. On April 1, 2010, Tessera moved to dismiss the case for lack of subject matter jurisdiction, stating that, to its knowledge, “PTI is a licensee in good standing and it and its customers therefore enjoy protection against any suit accusing its licensed products of infringement of the '106 patent or any other licensed patent.” Mot. to Dismiss, PTI I, Docket No. 14, 6. Tessera also asserted that its license with PTI “protects PTI and its customers.” Id. at 3. In June 2010, this Court dismissed the action for lack of subject matter jurisdiction, finding that there was no Article III case or controversy between the parties, because Tessera had explicitly excluded licensed products from its enforcement actions. Powertech Technology, Inc. v. Tessera, Inc., 2010 WL 2194829, at *3, 2010 U.S. Dist. Lexis 53621, at *7-8 (N.D.Cal.).

On May 23, 2011, the Federal Circuit affirmed in part the ITC’s final determination in the 630 Investigation and reversed it in part.2 In particular, the Federal Circuit upheld the finding of patent exhaustion for the infringement accusations against the uBGA products, and stated that because “Tessera’s licensees were authorized to sell the accused products” at the time of sale without reservation, Tess-era could not subsequently assert its patent rights against the licensees’ customers. Tessera v. ITC, 646 F.3d at 1369-71. In so holding, the court rejected Tessera’s argument that its licensees’ sales to their [929]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Microsoft Corporation v. Motorola Mobility
795 F.3d 1024 (Ninth Circuit, 2015)
Apple, Inc. v. Motorola Mobility, Inc.
886 F. Supp. 2d 1061 (W.D. Wisconsin, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
872 F. Supp. 2d 924, 2012 U.S. Dist. LEXIS 70630, 2012 WL 1835699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/powertech-technology-inc-v-tessera-inc-cand-2012.