Chip Law : Semiconductor Lawyer & Attorney : Perkins Coie Law Firm : Intellectual Property, Patent Litigation

When conducting an infringement threat assessment in your industry, don't write off the foreign companies. Foreign companies can and do file in US courts, whether against domestic or foreign competitors. As the US market becomes more competitive and foreign companies become more sophisticated, a greater diversity of plaintiffs' country of incorporation can be expected.

Japan-based Nichia Corp. filed a patent infringement lawsuit against Chinese solar products company Jiawei North America Inc. The complaint was filed in, of all places, the U.S. District Court for the Eastern District of Texas. Nichia alleges that Jiawei has infringed four LED-related patents.

This is not the first time Nichia has been to the Eastern District of Texas. Previously, Nichia settled two lawsuits filed by Seoul Semiconductor Co., also involving LED patents. It would appear Nichia now has a taste for Texas.

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On Aug. 31, Advanced Ion Beam Technology ("AIBT") had its antitrust counterclaims dismissed without prejudice from a patent infringement suit for failing to properly allege specific antitrust injury. On the same day, AIBT filed a new Sherman Act suit refining its antitrust allegations against Varian Semiconductor Equipment Associates Inc. ("Varian"), attempting to rectify the problems with its previous counterclaims.

Antitrust counterclaims are frequently raised by the defendant in patent infringement cases. A patent, by definition, is a monopoly providing the patentee with power to exclude others from making, using, selling, or offering to sell the patented invention. Such claims can be Walker Process fraud claims, alleging the asserted patent was procured by fraud in an effort to create or gain monopoly power in a market. Antitrust claims can also be "sham litigation" claims, alleging the patentee sought to create or maintain a monopoly by enforcing a patent knowing it to be invalid and by filing and maintaining an objectively baseless lawsuit.

Fortunately for the patentee, successfully asserting an antitrust counterclaim requires a high level of proof. Before initiating a patent infringement suit, it would be wise to review the asserted patents with an eye towards possible antitrust issues.

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The Federal Circuit's recent decision in Cardiac Pacemakers represents a shift in method patent protection scope. Generally, activities outside the U.S. do not trigger U.S. patent liability. But 35 U.S.C. Section 271(f) creates patent liability for certain import and export activities, such as exporting components of a patented invention and actively inducing the combination of the components outside of the US, if such combination would infringe within the US.

Under previous case law, the Federal Circuit found that 271(f) applied to method claims, and a defendant's export of a catalyst needed to perform a patented method could result in liability. Union Carbide Chemicals & Plastics Technology Corp. v. Shell Oil Co. (Fed. Cir. 2005).

In Cardiac Pacemakers, the Federal Circuit reversed its previous position and ruled that the section does not apply to method patents. Cardiac Pacemakers had sued over a patent claiming a method of using an implantable stimulator that detects heart arrhythmias. The Federal Circuit held that the defendant's implantable cardioverter defibrillators practicing the method of Cardiac’s patent outside the U.S. cannot constitute infringement under that statute. Because method or process patents do not include the required "physical components" of a patented invention and because one cannot "supply the step of a method," the statute cannot apply to method or process patents.

It is now more important than ever to ensure your patent portfolio protects not only the methods of producing semiconductor products, but also the products themselves if at all possible.
 

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