Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-04063/USCOURTS-cand-4_05-cv-04063-41/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

TESSERA, INC.,

Plaintiff,

v.

ADVANCED MICRO DEVICES, INC.,

et al.,

Defendants. /

AND RELATED COUNTERCLAIMS.

 /

No. C 05-4063 CW

ORDER GRANTING IN PART

THE ASP DEFENDANTS’

MOTION FOR A PRELIMINARY

INJUNCTION

Defendants Siliconware Precision Industries Co., Ltd.,

Siliconware USA, Inc., STATS ChipPAC Ltd., STATS ChipPAC (BVI)

Limited, STATS ChipPAC, Inc., Advanced Semiconductor Engineering,

Inc., ASE (U.S.) Inc., ChipMOS Technologies, Inc. and ChipMOS,

U.S.A., Inc. (collectively, the ASP Defendants) move for a

preliminary injunction prohibiting Plaintiff Tessera, Inc. from

initiating an action against them before the International Trade

Commission (ITC), or in any other way seeking relief against them

outside of California. Plaintiff opposes the ASP Defendants’

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1

Plaintiff argues that the other ASP Defendants are not

subject to the terms of the license agreements because they are not

parties to them. This is inconsistent with Plaintiff’s implied

position that the other ASP Defendants are “licensee affiliates,”

as that term is used in the license agreements, and thus are bound

by the terms of the agreements. Indeed, Plaintiff sues all of the

ASP Defendants for breach of the license agreements. Plaintiff

cannot now claim that certain of these Defendants are not covered

by those agreements.

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motion. The matter was heard on October 23, 2007. Having

considered oral argument and all of the papers submitted by the

parties, the Court grants the ASP Defendants’ motion, but issues an

injunction with narrower scope than that which the ASP Defendants

seek.

BACKGROUND

Plaintiff develops and patents semiconductor packaging

products. The ASP Defendants are assembly service providers; they

provide integrated circuit packaging services that utilize

Plaintiff’s technology. In 1998 and 1999, Plaintiff entered into

license agreements with four of the ASP Defendants: Advanced

Semiconductor Engineering, Inc., ChipMOS Technologies, Inc.,

Siliconware Precision Industries Co., Ltd., and ChipPAC, Inc.1

 The

agreements gave these Defendants the right to use certain

technologies covered by Plaintiff’s patents. Each of the

agreements contains an identically worded governing law provision

that reads in part:

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 litigation between the parties

relating to this Agreement shall take place in San Jose,

California. The parties hereby consent to personal

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jurisdiction and venue in the state and federal courts of

California.

Trinh Dec. Ex 2 at 13.

Plaintiff brought this lawsuit in 2005. The second amended

complaint charges the ASP Defendants, as well as other Defendants,

with both breaching their license agreements and infringing

Plaintiff’s patents without a license. In April, 2007, Plaintiff

filed a complaint in the ITC against, among others, the non-ASP

Defendants AMD, Spansion and STMicroelectronics. These three

Defendants subsequently moved the Court for a stay of this entire

action pending a final decision in the ITC proceedings. In their

motion, they stated (and Plaintiff did not dispute) that:

In both actions brought by Tessera, the accused products

are the same. Moreover, since all the asserted Tessera

patents, including the two patents asserted at the ITC

and the four patents asserted against the movants in this

Court, have the same specification and relate to the same

invention, there are many issues of claim construction,

infringement, validity and enforceability that will

overlap in both cases.

Docket No. 443 at 2.

The ASP Defendants first filed a statement of non-opposition

to the other Defendants’ motion. In that statement, they noted

that they “could not join that motion because Tessera did not name

them as respondents in its ITC complaint” and, therefore, they were

not entitled to the automatic stay provided to ITC respondents

pursuant to 28 U.S.C. § 1659. Docket No. 464. They later signed a

stipulation agreeing to a stay of this action in its entirety

pending a final ITC decision. Docket No. 466.

Plaintiff claims that discovery was needed in the ITC

proceeding in order to determine whether the ASP Defendants were

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responsible for providing packaging services during the manufacture

of the accused products. Plaintiff claims that, for this reason,

it did not name the ASP Defendants as respondents in the original

ITC complaint. However, on September 7, 2007, Plaintiff filed a

motion to modify the ITC’s protective order. The ASP Defendants

state that, given Plaintiff’s motion, they have reason to believe

that Plaintiff intends either to file a new ITC complaint against

them or to add them as respondents in the existing proceeding. 

They now move for a preliminary injunction prohibiting Plaintiff

from doing so.

LEGAL STANDARD

A party seeking a preliminary injunction must establish: (1) a

reasonable likelihood of success on the merits; (2) irreparable

harm if an injunction is not granted; (3) a balance of hardships

tipping in its favor; and (4) a public interest favoring the

injunction. Sanofi-Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1374

(Fed. Cir. 2006). These factors can be established by

demonstrating either “(1) a combination of probable success on the

merits and the possibility of irreparable injury or (2) that

serious questions are raised and the balance of hardships tips

sharply in its favor.” Mikohn Gaming Corp. v. Acres Gaming, Inc.,

165 F.3d 891, 895 (Fed. Cir. 1998) (citing Dollar Rent A Car v.

Travelers Indem. Co., 774 F.2d 1371, 1374-75 (9th Cir. 1985)). 

“These are not two distinct tests, but the poles of a ‘continuum in

which the required showing of harm varies inversely with the

required showing of meritoriousness.’” Id. (quoting Rodeo

Collection, Ltd. v. W. Seventh, 812 F.2d 1215, 1217 (9th Cir.

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1987).

DISCUSSION

I. Procedural Ripeness

Plaintiff argues that because it has not yet filed an ITC

complaint against the ASP Defendants, their motion is not ripe for

adjudication. It correctly notes that the ASP Defendants provide

little evidence supporting their contention that Plaintiff is about

to file a complaint against them with the ITC.

It is true that a preliminary injunction “cannot be issued to

prevent a mere speculative injury.” Regents of Univ. of Cal. v.

Am. Broadcasting Cos., Inc., 747 F.2d 511, 524 (9th Cir. 1984). 

However, the threat of injury here is neither remote nor

speculative. It is obvious from this lawsuit that Plaintiff

believes that the ASP Defendants’ products infringe its patents. 

Based on Plaintiff’s own admissions, it is not unlikely that it

will seek to add the ASP Defendants to its ITC action once

sufficient discovery has been completed. The Court finds the

threat of harm sufficiently imminent to support a preliminary

injunction. The Court need not wait until Plaintiff actually files

a complaint against the ASP Defendants identifying specific

products in order to adjudicate the ASP Defendants’ motion. 

Indeed, at that point it may be too late to prevent the harm the

ASP Defendants seek to avoid, given that the ITC may continue to

investigate a matter even after a complaint is withdrawn.

II. Collateral Estoppel

The ASP Defendants argue that Plaintiff is collaterally

estopped from opposing their motion by virtue of its involvement in

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Texas Instruments v. Tessera, Inc., 231 F.3d 1325 (Fed. Cir. 2000). 

In that case, the Federal Circuit was presented with a set of facts

similar to those here. Tessera had attempted to initiate an ITC

action against Texas Instruments (TI) while a related patent

proceeding was underway in the Central District of California. Id.

at 1327. The license agreement between the parties contained a

governing law provision almost identical to the one here. See id.

On appeal of the district court’s denial of TI’s motion for a

preliminary injunction, the Federal Circuit found that the forum

selection clause was enforceable and required that all litigation

activity related to the license agreement take place in California. 

Id. at 1326. After the case was remanded and transferred to the

Northern District of California, this Court granted TI’s motion for

a preliminary injunction and enjoined Tessera from further pursuing

the ITC action. Order Granting Plaintiff’s Renewed Motion for

Preliminary Injunction and Motion for Preliminary Injunction

Regarding Its Customers, dated Mar. 6, 2001, Case No. C 00-2114.

The doctrine of collateral estoppel provides that once a court

has decided an issue of fact or law necessary to its judgment, that

decision may preclude re-litigation of the issue in a suit on a

different cause of action involving a party in the first case. 

Allen v. McCurry, 449 U.S. 90, 94 (1980). A prior decision has

preclusive effect when:

(1) the issue necessarily decided at the previous

proceeding is identical to the one which is sought to be

relitigated; (2) the first proceeding ended with a final

judgment on the merits; and (3) the party against whom

collateral estoppel is asserted was a party or in privity

with a party at the first proceeding.

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Kourtis v. Cameron, 419 F.3d 989, 994 (9th Cir. 2005) (quoting

Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000).

The Federal Circuit in Texas Instruments decided two relevant

issues with respect to the forum selection clause. First, it

decided that, given the parties’ familiarity with patent disputes,

the term “litigation” in the forum selection clause encompassed

proceedings before the ITC. 231 F.3d at 1331. This issue is not

disputed here.

Second, Texas Instruments addressed governing law clauses

employing language such as that in Tessera’s license agreement with

TI, which covered all disputes that “may arise from, under, out of

or in connection with” the agreement. The court found that when a

license agreement exists, all legal disputes, including patent

disputes, related to the licensed products can be said to “arise

from” it. Id. However, while this holding is binding precedent,

it does not estop Tessera because the license agreement here is

different from the agreement between Tessera and TI in a crucial

respect, as discussed below.

The Federal Circuit made no finding on irreparable harm with

respect to TI’s motion for a preliminary injunction. Rather, it

remanded the case to this Court so that it could make additional

findings on this issue. On remand, the Court found that the

possibility of irreparable harm existed. However, even if such a

finding made in the course of a preliminary injunction were

entitled to preclusive effect, the finding of irreparable harm was

based on the specific facts in that lawsuit. While the facts here,

and thus the issues here, are similar, they are not identical to

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those in Texas Instruments; both the procedural posture and the

relationships among Plaintiff, the ASP Defendants and their

customers differ. Accordingly, while this Court’s decision in

Texas Instruments will serve as precedent when analyzing whether

irreparable harm exists here, it does not serve as a basis for

collateral estoppel. Accordingly, Plaintiff is not collaterally

estopped from opposing the ASP Defendants’ motion.

III. Judicial Estoppel

Plaintiff argues that the ASP Defendants should be estopped

from requesting that the Court enforce the forum selection clause

because they previously consented to a stay of these proceedings

pending a final decision in the ITC. Judicial estoppel provides

that “[w]here a party assumes a certain position in a legal

proceeding, and succeeds in maintaining that position, he may not

thereafter, simply because his interests have changed, assume a

contrary position, especially if it be to the prejudice of the

party who has acquiesced in the position formerly taken by him.” 

New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting Davis v.

Wakelee, 156 U.S. 680, 689 (1895)). In order for the doctrine to

apply, however, the party’s later position must be “clearly

inconsistent” with its earlier position. Id.; see also Abercrombie

& Fitch Co. v. Moose Creek, Inc., 486 F.3d 629, 633 (9th Cir. 2007)

(setting out other factors supporting the application of judicial

estoppel).

Here, the ASP Defendants did not take any action that is

clearly inconsistent with their present request for enforcement of

the forum selection clause. Although they consented to a stay of

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this action so that the ITC proceedings could go forward without

them, they did not consent to being named as respondents in that

action. Plaintiff makes the valid point that the ASP Defendants

had every reason to suspect that their products would be implicated

in the ITC proceeding. The ASP Defendants might have raised the

issue of their opposition to being named as respondents in the ITC

proceeding when Plaintiff first initiated it. Nonetheless, failing

to do so is not clearly inconsistent with their present motion. 

Thus, the Court can find no basis for judicial estoppel.

IV. Preliminary Injunction Factors

Plaintiff asserts that the ASP Defendants are unlikely to

succeed on the merits of their claim because the forum selection

clause does not bar its anticipated ITC action. As noted above,

the clause provides that any disputes “which may arise from, under,

out of or in connection with” the license agreement shall be

litigated exclusively in California. 

Like the forum selection clause in Texas Instruments, the

clause here “is not limited to license related issues such as the

amount of royalty due, term of agreement, and cross-licensing.” 

231 F.3d at 1331. Rather, it is worded so as to encompass any type

of dispute or disagreement arising from or relating to the

agreement. Where there is a license agreement between a patent

holder and an alleged infringer, Texas Instruments holds that

infringement disputes concerning products that are even arguably

licensed do “arise from” the agreement as a matter of law. Id.

However, the relevant provisions of the license agreements

here, unlike their counterparts in Texas Instruments, restrict the

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licensees’ use of the applicable patents to certain types of

products and applications. Specifically, the ASP Defendants are

limited to using the patented technology to produce tape-based

packaging products. Lo Dec. Ex. 3 at 3. In this sense, the

agreements carve out and license only a subset of the realm covered

by the patents’ claims, excluding from the licenses’ scope entire

fields of use. Thus, products which are not tape-based are

excluded from the license.

The ASP Defendants urge an expansive reading of Texas

Instruments. According to them, the decision stands for the

proposition that whenever a patent is the subject of a license

agreement, any dispute over that patent is subject to the

agreement’s governing law clause. But Texas Instruments dealt with

a license which granted rights that, in all relevant respects, were

coterminous with the claims of the licensed patents. See Lo Dec.

Ex. 5. In that case, TI argued that the accused products did not

fall within the scope of the license agreement because they did not

infringe the licensed patents, and vice-versa. See Order on CrossMotions for Summary Judgment on Patent Issues, TI’s Motion to

Dismiss and Tessera’s Motion for Summary Judgment on Contract

Issues, dated Nov. 14, 2001, No. C 00-2114. The issue of

infringement was inextricably linked with the terms of the license

agreement, and therefore “arose from” it.

This case presents a different type of license agreement. 

Here, unlike in Texas Instruments, it is possible for a product

produced by the ASP Defendant to infringe a Tessera patent licensed

to them, while still falling outside the scope of the license

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agreements. An infringement dispute over a product that is clearly 

not licensed cannot be said to arise from the license agreement. 

The reasoning in Texas Instruments does not apply to this scenario,

and the Court can identify no sound legal theory for subjecting

such a dispute to a forum selection clause in an unrelated

contract. Accordingly, the Court finds that Texas Instruments

holds that when a product is even arguably the subject of a license

agreement containing a forum selection clause, the clause applies

not just to disputes over licensing issues such as royalties or the

terms of the agreement, but also to related patent disputes such as

the scope of the patent itself, whether the products in question

infringe the patent, or whether the patent is valid. It does not

follow from this holding that disputes over accused products that

both parties agree are not covered by the license agreement should

be governed by the forum selection clause. The ASP Defendants thus

have a high likelihood of success on the merits, but only if the

products that are the subject of any ITC proceeding are arguably

within the scope of their licenses.

Plaintiff also argues that the ASP Defendants will not be

irreparably harmed by the initiation of ITC proceedings. Citing

Sampson v. Murray, 415 U.S. 61, 90 (1974), Plaintiff notes that

litigation expenses ordinarily do not constitute irreparable harm

because they can be reimbursed. However, this does not take into

account that the ITC proceedings could result in an exclusion order

barring the importation of the ASP Defendants’ products. There is

a high likelihood that even a temporary ban on imports would

disrupt the ASP Defendants’ business and damage relations with

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their customers. These harms cannot readily be quantified, and

thus are irreparable.

In contrast, Plaintiff stands to face little hardship by being

forced to litigate its claims against the ASP Defendants in this

Court. Its primary hardship is having to wait until the conclusion

of the ITC proceedings before litigating the remainder of its

claims in this Court, thereby delaying an ultimate decision. Yet

Plaintiff initiated the proceedings in the ITC after already having

filed this lawsuit and despite the forum selection clause in its

license agreements with the ASP Defendants. Plaintiff then

consented to a stay of the entire proceedings in this Court pending

an ITC determination. Plaintiff cannot now claim to face great

hardship as a result of its own litigation strategy. Thus, the

balance of hardships tilts in the ASP Defendants’ favor.

Finally, public policy generally favors the enforcement of

forum selection clauses so long as they are not unreasonable. See

Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d

273, 280 (9th Cir. 1984). It is true that in this case, the

interests of economy weigh against granting the ASP Defendants’

motion. It is certainly more efficient for the ITC to adjudicate

Plaintiff’s claims against the ASP Defendants and the other

Defendants at the same time, in that the same patents and issues

will presumably be involved. Still, the wastefulness of

duplicative proceedings and the risk of inconsistent decisions are

lessened somewhat by the stay currently in effect in this action. 

Accordingly, the public interest provides no compelling reason to

deny Plaintiff’s motion.

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In sum, the factors governing preliminary injunctions strongly

favor granting the ASP Defendants’ motion, but only with respect to

products that are arguably within the scope of their license

agreements. Plaintiff assures the Court that it intends to pursue

in the ITC only infringement claims based on products that are

clearly not licensed. Yet because Plaintiff has not identified

those products, the Court cannot determine whether they clearly

fall outside of the fields of use that are covered by the license

agreements. Plaintiff has agreed to abide by the forum selection

clause if the ASP Defendants argue that the accused products fall

within the scope of the agreements.

CONCLUSION

For the foregoing reasons, the Court GRANTS IN PART the ASP

Defendants’ motion for a preliminary injunction (Docket No. 489). 

Plaintiff is enjoined from filing a complaint against the ASP

Defendants in the ITC, or in any other way seeking relief against

them outside of California, accusing of infringement any of the ASP

Defendants’ products that are arguably covered by a license

agreement with Plaintiff. Before filing any complaint against the

ASP Defendants, Plaintiff must give them notice of its proposed

action, accompanied by a copy of the proposed complaint. The

notice must identify the accused products and demonstrate that they

do not fall within the scope of Plaintiff’s license agreements with

the ASP Defendants. The ASP Defendants may respond to the notice

within ten days. If they take the position that the products are

covered by their licenses, Plaintiff may not bring its proposed

action. If they do not, Plaintiff will be permitted to proceed

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with its action. If a dispute arises, either party may apply for

relief from this Court.

IT IS SO ORDERED.

11/1/07

Dated: ________________________ 

CLAUDIA WILKEN

United States District Judge

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