Intel Corp. v. Tela Innovations, Inc.

INTEL CORPORATION, Plaintiff, v. TELA INNOVATIONS, INC., Defendant.

Case No. 3:18-cv-02848-WHO

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

December 22, 2020

ORDER ON MOTIONS FOR SUMMARY JUDGMENT; MOTIONS TO STRIKE AND EXCLUDE; ADMINISTRATIVE MOTIONS TO SEAL

Re: Dkt. Nos. 217, 218, 219, 221, 228, 230, 234, 236, 241, 242, 243, 244, 245, 246, 247, 248, 249, 250, 253, 255, 257, 259, 260, 261, 262, 270, 272, 274, 276

INTRODUCTION

Tela Innovations, Inc. ("Tela"), the defendant and counterclaimant, owns (as relevant here) five patents related to the design and manufacture of semiconductor chips. Intel Corporation ("Intel"), the plaintiff and counter-defendant, filed this action seeking declaratory judgment that several of its products did not infringe Tela's patents and that the patents are unenforceable.

Before me are eight substantive motions. Each party has moved for summary judgment on several issues. Intel seeks summary judgment that its products do not infringe on two grounds and that two of Tela's patents are invalid. Tela seeks summary judgment on a group of Intel's claims and defenses that depend on Intel's contention that Professor Lawrence Pileggi—who assigned his putative rights in the patents to Intel—is an unnamed inventor of the patents. Tela also seeks summary judgment on Intel's claims and defenses that allege Tela breached a covenant not to sue between the parties. Additionally, each party has filed three motions to strike the opinions or exclude the testimony of the other party's experts.

Intel's motion for summary judgment is granted. It has shown its products do not infringe Tela's patents because they lack "diffusion regions" and "gate contact structures" that the asserted claims require. It has also shown that two of Tela's patents are invalid for failure to satisfy the statutory written description and enablement requirements. Tela's motion for summary judgment is granted in part and denied in part. It has shown that it did not breach the covenant not to sue. The inventorship issue, however, is dependent on genuine disputes of material fact not appropriate for summary judgment. The motions to strike and exclude are resolved as described below.

BACKGROUND

I. THE TECHNOLOGY

These motions concern U.S. Patent Nos. 7,943,966 ("the '966 Patent"), 7,948,012 ("the '012 Patent"), 10,141,334 ("the '334 Patent"), 10,141,335 ("the '335 Patent"), and 10,186,523 ("the '523 Patent") (collectively, the "Asserted Patents"). The Asserted Patents are all owned by Tela, are part of the same patent family, and claim priority to U.S. Provisional Patent Application No. 60/781,288 ("the '288 Provisional"). The Asserted Patents were issued between May 2011 and January 2019; the '288 Provisional was filed March 9, 2006.

I describe the aspects of the Asserted Patents relevant to this dispute in greater detail below. As a general matter, the Asserted Patents concern fabrication of semiconductor chips. See Claim Construction Order [Dkt. No. 175] 4. The fabrication of circuits like those described in the Asserted Patents occurs layer by layer. Id. "Lithography" is one part of the fabrication process in which light is used to pattern shapes onto a material. Id. 4-5. In general, as technology has advanced, the size of the features on the devices has gotten smaller and smaller. The "lithographic gap" is the phenomenon in which feature sizes are smaller than the wavelength of the light that is patterning them. Id. 5. The Asserted Patents aim to improve the design and manufacturability of integrated circuits by helping resolve the lithographic gap. Id.

This summary judgment dispute relates to semiconductor chips made by Intel using what it refers to as 22 nm, 14 nm, and 10 nm fabrication technologies (collectively, the "Accused Products"). Again, the aspects of these technologies relevant to the dispute are discussed in detail below. Generally, Intel argues that the state of the art, and its Accused Products, have progressed beyond what is reflected in the Asserted Patents and that the Accused Products do not infringe.

Several concepts require explanation for context and to aid understanding. The substantive discussion of the relevant aspects of the technology is below; this explanation should not be understood to describe in detail integrated circuits generally or the Asserted Patents or Accused Products specifically. Integrated circuit chips are a fundamental element of modern technology like computers and smartphones. As noted, chips like those at issue here are fabricated in layers. The base layer is a semiconductor material (usually silicon) called the "substrate." To generate an electrical current, impurities (for instance, boron) are introduced within the substrate. These impurities act as "sources" and "drains" that are charged, permitting an electrical current to flow. The flow is controlled by a "gate," sometimes referred to as "poly" (because they were often made with polysilicon); in the Asserted Patents, the gate is in a different layer than the substrate. Additionally, a "gate contact" layer or structure is placed above the gate. Last, interconnect layers—sometimes referred to as "metal" or "M" with designators such as "Metal 1" or "M1" depending on the layer number—connect the bottom layers to higher ones that are added.

II. THE PARTIES' HISTORY

On March 1, 2005, Scott Becker, the CEO of Tela and named inventor on the Asserted Patents, met with Carnegie Mellon Professor Lawrence Pileggi. What occurred at this meeting is described below in the discussion on Tela's motion for summary judgment. Both parties agree that Pileggi and his graduate students presented about technology they were working on—some of which Pileggi was attempting to commercialize through a company he founded called Fabbrix. The meeting occurred under a confidentiality agreement that Becker signed. Pileggi and Intel claim that, in this meeting, Pileggi presented concepts that Becker then used as an integral part of the Asserted Patents. Tela disputes this. Pileggi sold Fabbrix to a company called PDF in 2007. Pileggi worked with PDF for four more years, although the parties dispute his level of involvement with the company.

In June 2008, PDF filed a patent protest to an application that was then pending to which the Asserted Patents claim priority. The protest included alleged prior art references, including from Pileggi and Fabbrix. In May 2007, Intel invested in Tela. The parties also entered into a covenant not to sue (the "CNTS"). In June 2008, Intel considered a follow-on investment; itrequested and was given a legal analysis from Tela regarding PDF's protest. In January 2019, after this suit was filed, Pileggi licensed his purported rights in the Asserted Patents to Intel.

III. PROCEDURAL HISTORY

I have discussed the history of this case in several previous orders. See, e.g., Dkt. Nos. 162, 175. Intel originally filed this action in May 2018 for a declaratory judgment of noninfringement or unenforceability of a group of patents owned by Tela and has twice amended its complaint, altering the patents at issue. Dkt. Nos. 1, 38, 119. Tela eventually brought counterclaims against Intel and Intel brought counterclaims in reply. Dkt. Nos. 83, 101, 118, 164, 169, 170. There have since been several motions to dismiss, a motion to transfer venue, a series of discovery disputes, and a claim construction. Additionally, there has been a co-pending proceeding before the International Trade Commission ("ITC") about much of the same subject matter.

Here, Intel moves for summary judgment of noninfringement on the Asserted Patents. It also moves for summary judgment that the '334 and '335 patents are invalid. Tela seeks summary judgment on several of Intel's claims and defenses. Specifically, some of Intel's claims and defenses argue that the technology in the Asserted Patents was invented, in part, by Pileggi. See Second Amended Complaint ("SAC") [Dkt. No. 119] at 39-49; Intel's Answer to Tela's Counterclaims and Counterclaims in Reply ("CIR") [Dkt. No. 164] at 18-19. Tela seeks summary judgment on these inventorship claims and defenses because, it argues, Pileggi did not invent the technology, the claims fail as a matter of law, and the claims are barred by laches and equitable estoppel. Intel also argues that infringement claims against it based on the Asserted Patents are barred by the CNTS. Tela seeks summary judgment on Intel's claims and defenses based on the CNTS because, it contends, it does not cover the Asserted Patents. Each party has also filed three motions to strike the reports or exclude the testimony of the other party's experts on numerous grounds. I held a hearing on December 2, 2020, on all pending motions.

LEGAL STANDARD

I. SUMMARY JUDGMENT

A. Generally

Summary judgment on a claim or defense is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). In order to prevail, a party moving for summary judgment must show the absence of a genuine issue of material fact with respect to an essential element of the non-moving party's claim, or to a defense on which the non-moving party will bear the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made this showing, the burden then shifts to the party opposing summary judgment to identify "specific facts showing there is a genuine issue for trial." Id. The party opposing summary judgment must then present affirmative evidence from which a jury could return a verdict in that party's favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986).

On summary judgment, the Court draws all reasonable factual inferences in favor of the non-movant. Id. at 255. In deciding a motion for summary judgment, "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are...