Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03923/USCOURTS-cand-3_04-cv-03923-44/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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 The Court issued a temporary restraining order against Magma on August 30,

2005. By stipulation of the parties, the temporary restraining order remains in effect until

December 2, 2005. (See Stipulation and Order re: Modified Hearing and Briefing

Schedule, filed September 23, 2005, ¶ 4.)

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SYNOPSYS, INC.,

Plaintiff,

 v.

MAGMA DESIGN AUTOMATION, INC.,

Defendant.

 /

No. C-04-3923 MMC

ORDER GRANTING SYNOPSYS’S

MOTION FOR PRELIMINARY

INJUNCTION; VACATING HEARING

(Docket Nos. 342, 409)

Before the Court is plaintiff Synopsys, Inc.’s (“Synopsys”) motion, filed July 29, 2005

and revised September 16, 2005, for a preliminary injunction restraining defendant Magma

Design Automation, Inc. (“Magma”) from, inter alia, abandoning, dedicating to the public, or

seeking reexamination of United States Patents Nos. 6,453,446 (“’446 Patent”) and

6,725,438 (“’438 Patent”) pending final resolution of the instant action or, alternatively,

pending the Court’s determination of ownership of said patents.1

 Magma has filed

opposition to the motion, to which Synopsys has replied. Having considered the papers

filed in support of and in opposition to the motion, the Court finds the matter appropriate for

decision without oral argument, see Civil L.R. 7-1(b), and hereby VACATES the

December 2, 2005 hearing. For the reasons set forth below, the motion is GRANTED.

In determining whether to grant a motion for preliminary injunction, the Court weighs

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“four equitable factors: the movant’s likelihood of success on the merits; the possibility of

irreparable injury to the moving party; the extent to which the balance of hardships favors

each party; and whether the public interest will be advanced by granting the preliminary

relief.” See Overstreet v. United Brotherhood of Carpenters and Joiners of America, Local

Union No. 1506, 409 F.3d 1199, 1207 (9th Cir. 2005). To obtain a preliminary injunction, “a

moving party must show either a combination of probable success on the merits and the

possibility of irreparable harm or serious questions going to the merits, the balance of

hardships tipping sharply in its favor, and at least a fair chance of success on the merits.” 

See id. (internal quotation and citations omitted). “For the purposes of injunctive relief,

‘serious questions’ refers to questions which cannot be resolved one way or the other at the

hearing on the injunction and as to which the court perceives a need to preserve the status

quo lest one side prevent resolution of the questions or execution of any judgment by

altering the status quo.” Republic of the Phillippines v. Marcos, 862 F.2d 1355, 1362 (9th

Cir. 1988). “Serious questions need not promise a certainty of success, nor even present a

probability of success, but must involve a fair chance of success on the merits.” Id.

(internal quotation and citation omitted).

Here, for the reasons set forth below, Synopsys has demonstrated a serious

question exists as to ownership of the patents and, indeed, has demonstrated a probability

of success on the issue of whether it is a co-owner of the patents.

In particular, Lukas van Ginneken (“van Ginneken”), the named inventor of the ’446

and ’438 patents and a former employee of both Synopsys and Magma, signed a

Proprietary Information and Inventions Agreement (“Agreement”) with respect to his work at

Synopsys, by which he agreed that all inventions he “ma[d]e, conceive[d], reduce[d] to

practice, or develop[ed] (in whole or in part, either alone or jointly with others) during [his]

employment” with Synopsys “shall be the sole property” of Synopsys. (See Edelman Decl.,

filed July 29, 2005, Ex. B ¶ 3(D).) In that agreement, van Ginneken expressly agreed that

Synopsys “shall be the sole owner of all patents” on such inventions, and assigned to

Synopsys “any rights [he] may have or acquire in such [i]nventions.” (See id.) In a

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 Although, as Magma points out, van Ginneken testified at deposition that he felt

“pressured or intimidated” into signing said declaration because of the existence of

Synopsys’s lawsuit against him, (see Catalano Decl. Ex. 6 (van Ginneken Dep.) at 17:23-

18:4), van Ginneken testified that he participated in the drafting of the declaration, (see id. at 16:7-24), and did not testify that any of the statements contained in the declaration are

untrue.

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 Magma contends the claims of the Synopsys draft patent applications are directed

to a different invention than that claimed in the ’446 patent because the Synopsys draft

patents require delay to be held constant while the ’446 patent requires an “initial intended

delay.” The Court notes, however, that the two draft patent applications and the ’446

patent all expressly state delay may be changed or adjusted. (See Catalano Decl. Ex. 2 at

8; id. Ex. 3 at SY004583, SY004586; Third Amended Complaint, Ex. H (’446 Patent) at

18:14-35.)

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declaration dated March 10, 2005, van Ginneken attests that the ’446 and the ’438 patents

each disclose inventions that he “conceived while employed at Synopsys.”2

 (See van

Ginneken Decl. ¶¶ 44-45.)

In addition, van Ginneken attests that he worked with Synopsys’s patent counsel to

draft a patent application for the inventions he conceived while working at Synopsys, that at

least two such drafts were prepared, that he conceived all inventions disclosed in those

draft applications while he worked at Synopsys, and that the draft applications describe the

same inventions later disclosed in the ’446 and ’438 patents. (See van Ginneken Decl.

¶¶ 21-23.) Synopsys has provided corroboration of van Ginneken’s statements by

submitting a chart itemizing significant similarities between one of the draft patent

applications prepared by Synopsys and the shared specification of the ’446 and ’438

patents.3 (See Edelman Decl. Ex. K.)

Further, van Ginneken attests, he co-authored a white paper, titled “The Constant

Delay Methodology,” while he worked at Synopsys, which, he attests, sets forth “several

aspects of the inventions contained in the [’446 and ’438] Patents.” (See van Ginneken

Decl. ¶ 24.) Synopsys has provided corroboration of van Ginneken’s statement by

submitting a chart itemizing significant similarities between the above-referenced white

paper and the specification shared by the ’446 and ’438 patents. (See chart at Edelman

Decl. Ex. L.) 

Van Ginneken also attests that “[b]eginning in 1997,” after van Ginneken joined

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 Magma states in its supplemental interrogatory responses that claims 1-9, 19-26,

and 33-54 of the ’446 Patent and claims 1-16 and 19 of the’438 Patent were conceived

jointly by van Ginneken and Prabakhar Kudva of IBM, and that claims 10-18 and 27-32 of

the ’446 Patent as well as claims 17 and 18 of the ’438 patent were conceived jointly by

van Ginneken and Patrick Groeneveld of Magma. (See Edelman Decl. Ex. N at 2:20-3:5.)

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Magma, “Magma proceeded to extensively use the inventions and information described in

the Synopsys draft patent application and confidential white paper in order to create the

patent applications that would ultimately result in the issuance of the [’446 and ’438]

Patents.” (See van Ginneken Decl. ¶ 33.)

 In addition, Magma, in its supplemental responses to Synopsys’s First Set of

Interrogatories, concedes that all claims of the ’446 and ’438 patents were conceived by

van Ginneken, although it further contends that the claims were conceived not by van

Ginneken alone, but, rather, by van Ginneken in conjunction with employees of IBM or

Magma.4 (See Edelman Decl. Ex. N at 2:18-3-8.) Moreover, in response to an

interrogatory asking Magma to state all facts supporting the statement that van Ginneken

developed the inventions disclosed in the Magma patents after he co-founded Magma in

1997, Magma stated that only claims 10-18 and 27-32 of the ’446 patent, and claims 17

and 18 of the ‘438 patent, were conceived by van Ginneken after he resigned from

Synopsys, thus implicitly conceding that the other claims of the ’446 and ’438 patents were

conceived before van Ginneken resigned from Synopsys. (See id. at 6:3-6, 6:15-18.) 

Indeed, Magma expressly conceded the point in its supplemental responses to Synopsys’s

first set of requests for admission, in which it admitted that the methods described in claims

1-9, 19-26, and 33-54 of the ’446 patent and claims 1-16 and 19 of the ’438 patent were

conceived before van Ginneken resigned from Synopsys. (See Edelman Decl. Ex. O at

3:17-28, 5:6-17.) Thus, Magma and van Ginneken each have conceded that van Ginneken

was involved in the conception of at least some of the claims of the ’446 and ’438 patents

while van Ginneken was employed at Synopsys. Pursuant to the Agreement between van

Ginneken and Synopsys, all inventions van Ginneken conceived in whole or in part, alone

or jointly with others, while he worked at Synopsys, are the property of Synopsys, as are all

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 Much of the parties’ briefing is devoted to Magma’s argument that any ownership

rights Synopsys may have in the inventions described in the ’446 and ’438 patents are

shared with IBM, and that, consequently, Synopsys cannot demonstrate sole ownership of

the patents. The relevant issue, however, for purposes of the instant motion, is not

whether Synopsys can demonstrate that it is the sole owner of the patents, but whether it

has any ownership rights in the patents that could be irreparably injured if Magma were

permitted to attempt to alter the scope of the patents prior to a final determination of patent

ownership.

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 Synopsys also seeks an order enjoining Magma from taking any action in the PTO

or any foreign patent office with respect to “progenies” of the ‘446 and ’438 patents and

Continuation Application No. 10/828,547 as owner thereof, but has made no showing that

van Ginneken conceived the inventions set forth therein while he was employed at

Synopsys. Consequently, the Court will not enjoin Magma from taking any action with

respect to “progenies” of the ‘446 and ’438 patents and Continuation Application No.

10/828,547.

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patents obtained in connection therewith. (See id. Ex. B ¶ 3(D).) The Federal Circuit has

held that an assignment of rights to a future invention is effective to transfer to the assignee

legal title to the patent rights accruing as a result of a subsequent application for a patent

on the assigned invention. See Filmtec Corp. v. Allied-Signal, Inc., 939 F.2d 1568, 1572-74

(Fed. Cir. 1991). Thus, Synopsys has established, at a minimum, a probability of

demonstrating co-ownership5 of the ’446 and ’438 patents.6

As to the possibility of irreparable injury and the balance of hardships, Synopsys

likely would be precluded from participating in the reexaminations Magma states it intends

to initiate immediately if the Court denies the instant motion. (See Opp. at 1.) By statute,

reexamination proceedings are conducted by the Patent and Trademark Office (“PTO”),

with the participation of the patent owner and the person seeking reexamination. See 35

U.S.C. §§ 302-305; see also 37 C.F.R. § 3.71 (noting all partial assignees of patent must

participate in reexamination). As Magma is the patent owner of record, Synopsys likely

would be excluded from any such proceedings, despite its claim to ownership of the ’446

and ’438 Patents. Indeed, the PTO has previously indicated an unwillingness to become

involved in the ownership dispute between Synopsys and Magma, or to allow Synopsys to

participate in the prosecution of any continuation patent applications that derive from the

’446 and ’438 patents. (See Edelman Decl. Ex. R (April 27, 2005 order dismissing

Synopsys’s petition to suspend prosecution of United States Patent Application No.

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 The Court notes that Magma could not be held liable for infringement of its own

patents.

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10/828,547 pending resolution of ownership dispute between Synopsys and Magma).) 

Moreover, if Magma were permitted to seek reexamination, or to otherwise seek to

change the scope of the patents by, inter alia, abandoning, limiting, disclaiming, or

dedicating to the public any portion of the patents, any resulting limitation of the scope of

the patents likely could not be redressed should the Court later determine that Synopsys

has an ownership interest in the patents. See, e.g., Altoona Publix Theatres, Inc. v.

American Tri-Ergon Corp., 294 U.S. 477, 492 (1935) (“To permit [an] abandoned claim to

be revived, with the presumption of validity, because the patentee had made an improper

use of the disclaimer, would be an inadmissible abuse of the patent law to the detriment of

the public.”). Accordingly, Synopsys has demonstrated a possibility of irreparable injury if

the Court were to deny the instant motion.

Magma, for its part, asserts that it will suffer severe hardship if the injunction is

granted because it will be precluded from seeking to narrow the patent claims in a

reexamination proceeding, and, consequently, will “be forced to defend against invalid

patents in this lawsuit.” (See Opp. at 22.)7 As noted, however, Magma’s own

representations in this litigation suggest it is likely Magma is not the sole owner of the ’446

and ’438 patents. Under such circumstances, Magma has no compelling interest in

seeking reexamination of the patents until ownership is determined, particularly since the

PTO has suggested that it will not permit Synopsys to participate in such proceedings

unless and until Synopsys obtains a final court order awarding title to Synopsys. (See

Edelman Decl. Ex. R (April 27, 2005 order dismissing Synopsys’s petition to suspend

prosecution of United States Patent Application No. 10/828,547 pending resolution of

ownership dispute between Synopsys and Magma).)

Magma also argues that it has an “unqualified statutory right,” (see Opp. at 1), to

seek reexamination and that, consequently, Synopsys has no right to a permanent

injunction precluding Magma from seeking reexamination. No motion for a permanent

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 The Court is not persuaded by Magma’s argument that Synopsys delayed unduly

in seeking a preliminary injunction. Synopsys promptly filed the instant motion when it

became aware that Magma might seek reexamination of the patents.

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injunction is pending, however, and Synopsys is not seeking to bar Magma, in perpetuity,

from seeking reexamination of the patents. The issue presently before the Court is whether

reexamination should be delayed until ownership of the patents is resolved, to ensure that

the actual owner(s) of the patents will have the opportunity to participate in any

reexamination proceeding that ultimately may be initiated. See Manual of Patent

Examining Procedure (“MPEP”) § 301 (“All parties having any portion of the ownership in

the patent property must act together as a composite entity in patent matters before the

Office.”) (emphasis in original). Synopsys seeks only to maintain the status quo, and to

ensure that the patents remain intact, until the Court determines the ownership of the

patents. The Court finds, on the record before it, Synopsys has demonstrated not only the

possibility of irreparable injury, but that the balance of hardships tips sharply in its favor.8

 

The Court notes that in deciding whether to issue an injunction, the Court must

consider, where applicable, “advancement of the public interest." See Johnson v.

California State Board of Accountancy, 72 F.3d 1427, 1430 (9th Cir. 1995) (noting

“traditional equitable criteria” for preliminary injunctive relief includes, in certain cases,

“advancement of the public interest”). As the Federal Circuit has observed, “[t]he public

interest lies in having valid patents upheld and invalid patents rendered invalid, and hence

patents should be reexamined when a substantial question of patentability is raised.” See

In re Baker Hughes Inc., 215 F.3d 1297, 1302 (Fed. Cir. 2000.) Regardless of who initiates

a reexamination, “the PTO is charged with making an independent determination

concerning the patentability of inventions.” See id. Consequently, the public interest

weighs in favor of permitting reexamination where a question of validity exists. The public

interest does not, however, favor the PTO’s conducting such a proceeding without the input

of all of the owners of the patents. See MPEP § 301 (“All parties having any portion of the

ownership in the patent property must act together as a composite entity in patent matters

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before the Office.”) (emphasis in original). As discussed, Synopsys has demonstrated a

serious question exists as to the ownership of the ’446 and ’438 patents and, indeed, has

demonstrated a likelihood that it can establish it is a co-owner of the ’446 and ’438 patents. 

Under such circumstances, the public interest is not served by reexamination without

Synopsys’s input, unless and until it is determined that Synopsys has no ownership rights

in the ’446 and ’438 patents.

Finally, the Court recognizes issuance of a preliminary injunction against Magma will

not necessarily prevent reexamination from occurring pending the Court’s determination of

Synopsys’s ownership rights in the patents. Pursuant to 35 U.S.C. § 303, for example, the

PTO may initiate reexamination sua sponte. In addition, third parties may seek

reexamination of the patents. Any injunction the Court might issue against Magma would

not preclude the PTO or such other parties from initiating reexamination. With such

possibility in mind, Synopsys asks the Court to order Magma to seek a stay of any

reexamination initiated by the PTO or a third party. The Court declines to issue such an

order before any such reexamination has been initiated and the Court has had an

opportunity to consider the circumstances pertaining at that time.

For the reasons stated above, the Court finds issuance of a preliminary injunction is

appropriate. The Court will enjoin Magma from taking any steps to destroy, abandon,

suspend, limit, disclaim, or seek reexamination of the ’446 or ’438 patents, or any part

thereof, pending resolution of the issue of ownership. 

Accordingly, Synopsys’s motion for a preliminary injunction is hereby GRANTED, as

set forth in a separate order filed concurrently herewith. 

This order terminates Docket Nos. 342, 409.

IT IS SO ORDERED.

Dated: December 1, 2005 

MAXINE M. CHESNEY

United States District Judge

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