Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03657/USCOURTS-cand-3_14-cv-03657-58/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MLC INTELLECTUAL PROPERTY, LLC,

Plaintiff,

v.

MICRON TECHNOLOGY, INC.,

Defendant.

Case No. 14-cv-03657-SI 

ORDER RE: MICRON'S DAMAGES 

MOTIONS IN LIMINE #2, #3 AND #5

Re: Dkt. Nos. 445, 447, 451

On June 6, 2019, the Court held a hearing on various pretrial motions. For the reasons set 

forth below, the Court GRANTS Micron’s damages motions in limine # 2 and # 3 and DENIES 

Micron’s damages motion in limine #5 without prejudice to specific objections at the time of trial.

I. Micron’s Damages MIL #21

Micron seeks “to preclude MLC from proffering any testimony, evidence, argument, or 

insinuation regarding the non-party subsidiaries and affiliates, their extraterritorial sales, or to 

contest Micron’s determination of what constitutes a foreign sale.” MIL #2 at 1 (Dkt. No. 445). 

Based upon the expert report of MLC’s damages expert, Mr. Milani, it is clear that MLC seeks 

damages based on a royalty base that includes all of Micron’s worldwide sales and that includes all 

sales, domestic and foreign, by eight of Micron’s wholly-owned subsidiaries as well as IMFT, a 

joint venture between Micron and Intel. Micron asserts that MLC may not seek damages based on 

Micron’s foreign sales, and that MLC may not seek damages based on any sales by Micron’s 

 

1

 The Court rejects MLC’s assertion that MIL #2 is a disguised and therefore procedurally 

improper summary judgment motion, as the motion does not seek dismissal of any pending claims 

in the lawsuit, but rather seeks to preclude MLC from presenting evidence at trial that is outside the 

scope of MLC’s claims.

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subsidiaries and IMFT.

The Court agrees with Micron. As an initial matter, MLC never alleged or disclosed in 

discovery that it was seeking to hold Micron liable for foreign sales or the sales by its subsidiaries 

and joint ventures. Instead, the question of non-party and foreign sales was first presented as 

discovery dispute when MLC sought discovery on Micron’s sales. As the record reflects, discovery 

regarding Micron’s sales was complicated and protracted. In an order filed November 26, 2018, the 

Court ultimately allowed discovery on Micron’s worldwide sales (as well as non-party sales)

because, inter alia, MLC asserted that wanted to challenge as a factual matter whether sales were 

properly characterized as “foreign” or “domestic” and because the Court recognized that the law 

regarding the relevance of foreign sales was somewhat in flux. In addition, the Court directed 

Micron to produce sales data for subsidiaries and the joint venture because MLC asserted that 

Micron’s production of sales data was incomplete in numerous respects and because such discovery 

might be relevant to one of Micron’s affirmative defenses.2 However, when the Court allowed such 

discovery the Court expressly reserved the questions of whether Micron would be liable for foreign

and non-party sales. See generally Dkt. No. 240. The Court’s order also noted that on November 

13, 2018, MLC had filed a motion to amend the complaint to add 9 new parties, which were the 

subsidiaries and joint venture, and that motion was then pending. The Court subsequently denied 

MLC’s motion to amend the complaint, finding that “[a]dding nine new defendants to this already 

complex case would inject additional layers of complexity to this litigation,” and require the 

reopening of fact discovery and the setting of an entirely new pretrial schedule. See generally Dkt. 

No. 288.

Now that all discovery has closed and this case is approaching trial, the Court concludes that 

MLC has not demonstrated a legal or factual basis for seeking to hold Micron liable for non-party 

sales or foreign sales. As discussed supra, MLC never alleged or disclosed in discovery that it is 

entitled to damages based on Micron’s vicarious liability for the non-parties. Further, based upon 

 

2

 MLC had also asserted, in the context of the discovery dispute, that Micron “benefitted” 

from the sales made by subsidiaries, and that there was some unspecified legal basis to hold Micron 

liable for those sales.

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the briefing and the arguments of counsel, the Court concludes that as a factual matter MLC does 

not have evidence to raise a triable issue regarding vicarious liability. In order to hold Micron liable 

for the sales of non-parties, MLC needs to pierce the corporate veil by showing, inter alia, 

“pervasive control over the subsidiary, such as when a parent corporation dictates every facet of the 

subsidiary’s business—from broad policy decisions to routine matters of day-to-day operation.” 

Ranza v. Nike, Inc., 793 F.3d 1059, 1073 (9th Cir. 2015) (internal quotation marks and citation 

omitted). MLC’s evidence of alter ego largely consists of Micron’s SEC filings in which Micron 

reports consolidated financials and states, inter alia, that it guarantees certain debts of its 

subsidiaries.

3

 The Court finds that as a matter of law that this evidence, on its own, is insufficient 

to raise a triable issue of fact as to alter ego, and thus GRANTS Micron’s motion to exclude evidence 

of any sales by Micron’s subsidiaries and IMFT. The Court also finds that the case law upon which 

MLC relies for the assertion that “whether Micron is directing and/or controls its foreign subsidiaries 

in their infringing activities” (MLC’s Opp’n at 10; Dkt. No. 496) is inapposite. See Sound View 

Innovations, LLC v. Hulu, LLC, Case No. LA CV 17-04146 JAK (PLAx), Dkt. No. 452 at 12-13 

(Redacted Summary Judgment Order) (C.D. Cal. Apr. 30, 2019) (unreported) (denying summary 

judgment on plaintiff’s claim of divided infringement, where plaintiff alleged that defendant 

performed certain steps of claimed method and that defendant directed and controlled third parties 

to perform remaining steps of the claimed method); see also Nalco Co. v. Chem-Mod, LLC, 883 

F.3d 1337, 1351 (Fed. Cir. 2018) (addressing divided infringement theory). 

As to Micron’s foreign sales, Micron states that it characterized as “foreign” those sales in 

which the sale, shipment and manufacture of the accused products all occurred outside of the United 

States. MLC argues that it may seek damages based on those entirely foreign sales based on Power 

Integrations, Inc. v. Fairchild Semiconductor Int’l Inc., et al., No. CV 04-1371-LPS, 2018 WL 

4804685 (D. Del. Oct. 4, 2018). In that case, Judge Stark held that the Supreme Court’s decision in 

WesternGeco LLC v. ION Geophysical Corp., 138 S. Ct. 2129 (2018) (“WesternGeco II”), implicitly 

overruled the Federal Circuit’s decision in Power Integrations Inc. v. Fairchild Semiconductor Int’l 

 

3

It does not appear that MLC conducted any other discovery relevant to vicarious liability 

which is not surprising since MLC never alleged or disclosed such a theory.

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Inc. et al., 711 F.3d 1348 (Fed. Cir. 2013) (“Power Integrations I”), and thus that Power Integrations 

could seek recovery of worldwide damages for direct infringement under 35 U.S.C. § 271(a).4 In 

WesternGeco II, the Supreme Court reversed the Federal Circuit and held that a plaintiff seeking 

lost profits damages under 35 U.S.C. § 271(f)(2)5 may seek worldwide damages. Judge Stark 

reasoned that “[t]he Supreme Court’s analysis of the patent damages statute, § 284, has equal 

applicability to the direct infringement allegations pending here, as governed by § 271(a), as it did 

to the supplying a component infringement claims at issue in WesternGeco II, which were governed 

by § 271(f)(2).” Power Integrations, Inc., 2018 WL 4804685, at *1. However, recognizing that 

“the Federal Circuit could well disagree with this Court’s assessment that the Supreme Court in 

WesternGeco II implicitly overruled the Federal Circuit’s Power Integrations decision,” Judge Stark 

certified his decision for interlocutory appeal, id. at *2, and that appeal is still pending before the 

Federal Circuit. 

Micron argues that MLC’s reliance on Judge Stark’s opinion is misplaced for a number of 

reasons, and it disagrees that WesternGeco II implicitly overruled Power Integrations I. Micron 

argues that the Supreme Court’s analysis of damages under § 271(f) in WesternGeco II is not 

transferable to the availability of damages under § 271(a) because § 271(f) involves some foreign 

conduct (the combining of components in an infringing manner outside the United States), whereas 

§ 271(a) involves domestic acts of infringement. Micron also notes that MLC is seeking damages 

based on a reasonable royalty, not lost profits (as is the case in Power Integrations and 

WesternGeco), and that in any event, Judge Stark’s opinion conflicts with controlling Federal Circuit 

 

4

 35 U.S.C. § 271(a) provides: “Except as otherwise provided in this title, whoever without 

authority makes, uses, offers to sell, or sells any patented invention, within the United States or 

imports into the United States any patented invention during the term of the patent therefor, infringes 

the patent.”

5

 35 U.S.C. § 271(f)(2) provides:

“(2) Whoever without authority supplies or causes to be supplied in or from the United States 

any component of a patented invention that is especially made or especially adapted for use in the 

invention and not a staple article or commodity of commerce suitable for substantial noninfringing 

use, where such component is uncombined in whole or in part, knowing that such component is so 

made or adapted and intending that such component will be combined outside of the United States 

in a manner that would infringe the patent if such combination occurred within the United States, 

shall be liable as an infringer.”

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and Supreme Court cases holding that the relevant patent laws do not provide “compensation for a 

defendant’s foreign exploitation of a patented invention, which is not infringement at all.” Power 

Integrations I, 711 F.3d at 1371 (citing Brown v. Duchesne, 60 U.S. 183, 195 (1856) (“And the use 

of it outside of the jurisdiction of the United States is not an infringement of his rights, and he has 

no claim to any compensation for the profit or advantage the party may derive from it.”)). 

The Court concludes that under Power Integrations I and the cases cited therein, MLC may 

not seek damages based on Micron’s wholly foreign sales. The Court also finds it significant that 

the Supreme Court denied certiorari in Power Integrations I. See Power Integrations, Inc. v. 

Fairchild Semiconductor Int’l Inc., 571 U.S. 1125 (2014). Whether Judge Stark is correct that 

WesternGeco II implicitly overruled Power Integrations I remains to be seen, but at this time 

controlling law holds that MLC may not seek damages under § 271(a) based on Micron’s wholly 

foreign sales. See also Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d 1283, 1306 

(Fed. Cir. 2015) (“[W]e think that § 271(a) provides the basis for drawing the needed line. It states 

a clear definition of what conduct Congress intended to reach—making or using or selling in the 

United States or importing into the United States, even if one or more of those activities also occur 

abroad. Where a physical product is being employed to measure damages for the infringing use of 

patented methods, we conclude, territoriality is satisfied when and only when any one of those 

domestic actions for that unit (e.g., sale) is proved to be present, even if others of the listed activities 

for that unit (e.g., making, using) take place abroad.”) (internal footnote omitted).

At the hearing, MLC’s counsel provided conflicting answers regarding whether MLC 

contested, as a factual matter, whether any of Micron’s “foreign” sales were in fact domestic sales 

that were recoverable. However, both at the hearing and its opposition brief, MLC attempted to 

shift the burden of proof to Micron, asserting that “Micron has opted to produce sales data with 

insufficient detail to readily ascertain what is truly a foreign sale versus a domestic sale, much less 

sufficiently detailed to be dispositive on the issue of the nexus.” MLC’s Opp’n at 12 (Dkt. No 496). 

Based upon the arguments of counsel and the briefing on this motion, it appears that MLC does not 

have any evidence to contest Micron’s classification of foreign sales as foreign. Micron’s counsel 

stated at the hearing that Micron classified sales as “foreign” when the sale, shipment and 

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manufacture of the product all occurred overseas. As MLC has the burden of proof to show that 

that the damages it seeks are legally compensable, and because MLC has not identified any evidence 

to challenge Micron’s categorization of certain sales as “foreign,” the Court GRANTS Micron’s 

motion in limine to exclude evidence of foreign sales.6

II. Micron’s MIL #3

Micron seeks to preclude MLC’s witnesses from referring to Micron as “the last/lone 

holdout,” “an invention plagiarist,” and/or a “dirty rotten infringer.” This motion is GRANTED as 

framed. If relevant,7 MLC may present evidence regarding the other licenses that BTG/MLC 

entered into with other NAND flash manufacturers. However, the Court agrees that referring to 

Micron as “the last/lone holdout” is prejudicial. The Court also finds that the terms “invention 

plagiarist” and “dirty rotten infringer” are prejudicial. The Court will issue a separate order 

regarding Ronald Epstein and whether he is permitted to testify as an expert regarding his real world 

licensing model in which he coined the term “invention plagiarist.” 

III. Micron’s MIL #5

Micron seeks to preclude testimony outside the scope of Mr. Milani’s and Mr. Epstein’s 

expert reports. As a general matter, experts are limited to providing testimony that has been 

disclosed in their reports. In addition, the Court will issue separate orders regarding the Daubert

 

6

 At the hearing, MLC’s counsel cited the Carnegie-Mellon case for the proposition that a 

product that was designed in the United States and manufactured elsewhere would be a domestic 

sale. In that case, the Federal Circuit vacated a portion of a damages award and remanded for a new 

trial to determine whether certain computer chips were sold in the United States. The court expressly 

declined to resolve the question of whether the sales at issue were domestic or foreign, and finding 

that further factual development at the district court was needed. The court also left open the 

question of whether “design” activities in the United States would be sufficient to make a sale 

domestic. See Carnegie-Mellon, 807 F.3d at 1308-09 (“[W]e do not have a full understanding of, 

among other things, what a ‘design win’ meant legally and practically, how such a ‘design win’ in 

the United States in this case compares with the activities that occurred in the United States in Halo 

(which were insufficient), and where specific chip orders were negotiated and made final. Until 

fuller exploration of factual and legal issues occurs on remand, it is premature to rule on whether 

sales occurred in the United States for the chips at issue.”).

7

 A number of the pending motions relate to whether MLC may present evidence regarding 

the other licenses for purposes of computing damages in this case.

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motions related to Mr. Milani and Mr. Epstein, as well as related motions in limine and/or to strike. 

The Court DENIES this motion without prejudice to specific objections at the time of trial.

IT IS SO ORDERED.

Dated: June 11, 2019 ______________________________________

SUSAN ILLSTON

United States District Judge

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