Wisconsin Alumni Research Foundation v. Intel

656 F.Supp.2d 898

WISCONSIN ALUMNI RESEARCH FOUNDATION, Plaintiff, v. INTEL CORPORATION, Defendant.

No. 08-cv-78-bbc.

United States District Court, W.D. Wisconsin.

September 17, 2009.

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Azar Mouzari, Alan J. Heinrich, Benjamin T. Wang, Blake B. Greene, Ellisen Shelton Turner, Gary N. Frischling, Jason Sheasby, Morgan Chu, Peter Gratzinger, Samuel Kai Lu, Zachariah Summers, Irell & Manella LLP, Los Angeles, CA, James Donald Peterson, Bryan J. Cahill, Godfrey & Kahn, S.C., Michelle Marie Umberger, Wisconsin Alumni Research Foundation, Madison, WI, for Plaintiff.

Adam S. Gershenson, Bryan Scott Conley, Donald R. Steinberg, Elizabeth M. Reilly, Jonathan Andron, Lauren B. Fletcher, Stephen M. Muller, Wilmer Cutler Pickering Hale and Dorr LLP, Patrick M. Callahan, Peter W. Baik, Sarah A. Beigbeder, William F. Lee, Wilmer Hale, Boston, MA, James L. Quarles, Meaghan Hannan Davant, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, Leo L. Lam, Matthias Andreas Kamber, Robert A. Van Nest, Keker & Van Nest LLP, San Francisco, CA, Victor F. Souto, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Richard L. Bolton, Boardman, Suhr, Curry & Field LLP, Madison, WI, for Defendant.

OPINION and ORDER

BARBARA B. CRABB, District Judge.

This is a patent infringement suit involving computer hardware. Plaintiff Wisconsin Alumni Research Foundation alleges that defendant Intel Corporation's products infringe plaintiff's United States Patent Number 5,781,752 (the '752 patent), a patent involving computer processor architecture, and that defendant's infringement is willful. Aside from the standard defenses and counterclaims (noninfringement, invalidity), defendant contends that it has a license to the '752 patent or, in the alternative, that the patent should not be enforceable against defendant for equitable reasons. Plaintiff's patent is derived from research performed at the University of Wisconsin-Madison; defendant contends that it provided conditional funding for the research project that brought about the invention claimed in the '752 patent.

The case is before the court on the parties' cross motions for partial summary judgment. Plaintiff has moved for summary judgment on defendant's license-related defenses and defendant has moved for summary judgment on one of its theories of invalidity and on plaintiff's claim of willful infringement. (In addition, plaintiff has moved for leave to file a surreply to defendant's motion for summary judgment after defendant raised new arguments in its reply brief. That motion will be granted.)

I will grant most of plaintiff's motion for summary judgment. I conclude that the parties' written funding agreements are ambiguous, which means the circumstances in which they were made must be considered. Those circumstances establish that the parties did not intend to grant defendant a license to intellectual property in exchange for the funding. Moreover, because defendant did not start developing the allegedly infringing products until after plaintiff offered to license the '752 patent, there exists no "implied license" or related equitable basis for barring plaintiff's infringement suit. I will deny plaintiff's motion with respect to two of defendant's counterclaims and defenses: any "waiver defense" not related to plaintiff's conduct leading up to January 2001 (when plaintiff sought to offer a license to defendant) and defendant's "unclean hands" defense. Plaintiff failed to identify a basis for summary judgment on either of these claims.

As for defendant's motion, I will deny it with regard to defendant's theory of invalidity and grant it with regard to plaintiff's claim of willful infringement. Defendant's theory that claims 1 and 2 of the '752 patent are anticipated by four "memory reference tagging" techniques identified in United States Patent Number 5,619,662 does not hold water. Upon determining the proper scope of the term "prediction" as used in the '752 patent (a matter left incomplete by the court's earlier construction), I conclude that none of the four memory reference techniques disclose all the elements claimed in the '752 patent. I will grant defendant's motion as to plaintiff's claim for willful infringement because defendant's licensing defense was a relatively close question, which means that plaintiff cannot establish the "objectively high likelihood" of infringement required to establish willful infringement.

Before turning to the motions, a word about procedure is in order. I have drawn the undisputed facts from the parties' proposed findings of fact and the record. However, a large number of the facts proposed by the parties have been disregarded. In some instances, this is for the usual reasons (the facts are not necessary to resolve the parties' disputes or the evidence cited does not support the fact proposed). However, many of the facts related to defendant's express license defense have been disregarded as irrelevant, including the parties' dealings regarding unrelated funding, defendant's later-developed internal system for organizing funding agreements, conclusory statements regarding defendant's unexpressed "intent" and whether and why plaintiff was wrong to classify defendant's funding as a "gift" under its policies. All that is relevant to the question whether plaintiff expressly licensed the '752 patent is the language of the parties' agreements, Erickson v. Gundersen, 183 Wis.2d 106, 117, 515 N.W.2d 293, 299 (Ct. App.1994), and, if that language is ambiguous, "the conduct of the parties and negotiations which took place, both before and after the execution of the documents, and ... all related documents of the parties." Smith v. Osborn, 66 Wis.2d 264, 272, 223 N.W.2d 913, 917 (1974); see also Brest v. Maenat Realty Co., 245 Wis. 631, 635, 15 N.W.2d 798, 800 (1944) (parties' other agreements not relevant to intent of parties unless those agreements relate to same transaction and have same object as agreement at issue); Gerruth Realty Co. v. Pire, 17 Wis.2d 89, 95, 115 N.W.2d 557, 560 (1962) (evidence of what defendant "had in mind" irrelevant because "it was not communicated" to the other party). The facts related to other universities' approaches to funding will be disregarded as lacking foundation. Although the parties' intent sometimes requires a court to consider what "persons in the business to which the contract relates" might understand, Columbia Propane, L.P. v. Wisconsin Gas Co., 2003 WI 38, ¶ 25, 261 Wis.2d 70, 661 N.W.2d 776, the parties have not laid the proper foundation for their testimony regarding what other universities' approaches to funding are.

I. LICENSING DEFENSES AND COUNTERCLAIMS

UNDISPUTED FACTS

A. Parties

Plaintiff Wisconsin Alumni Research Foundation is a not for profit Wisconsin corporation having its principal place of business in Madison, Wisconsin. Plaintiff is the patent management organization for the University of Wisconsin, supporting research at the university by patenting and licensing university inventions and by returning the proceeds of that licensing to fund additional research at the university.

Plaintiff owns United States Patent No. 5,781,752 (the '752 patent). The named inventors of the '752 patent include Gurindar Sohi, Andreas Moshovos, Scott Breach and Terani Vijaykumar. At the time of the invention, Sohi was an associate professor in the Computer Sciences Department at the university and a researcher in the field of computer microprocessor architecture. Moshovos, Breach and Vijaykumar were graduate students and research assistants in the university's Computer Sciences Department.

Defendant Intel Corporation is a Delaware corporation with its principal place of business in Santa Clara, California. Defendant makes semiconductor chips and develops advanced integrated digital technology products for industries such as computing and communications. Primary among defendant's technology products are its integrated circuits, which are semiconductor chips etched with interconnected electronic switches.

B. Intel's Award of Funding to Sohi

1. Discussions leading up to award of funding

By May 1994, Sohi was becoming well known for his research in computer microarchitecture, particularly in an area called "instruction level parallel processing." He was working on a project that he referred to as the "multiscalar paradigm" that involved using a collection of scalar processors to cooperate in the efficient execution of a sequential program. Sohi's research focused on developing a new architectural paradigm that would allow multiple sequences of instructions to be executed simultaneously on several connected processors to improve the overall speed at which programs could be loaded. By May 1994, Sohi's research on multiscalar architecture was underway and was being supported by the National Science Foundation and the Office of Naval Research in amounts totaling approximately $200,000 annually.

Defendant had established a "Research Council" to support university research in the technology areas in which defendant was involved. Among the research areas the council had targeted was microcomputers, which included work in "processor architecture." In early 1994, Sohi's work on computer processor architecture came to defendant's attention. On May 31, 1994, Hans Mulder, a representative of defendant, emailed Sohi about defendant's university-research grant program. Mulder told Sohi that his "work on the Multiscalar architecture ... could be applicable for support from Intel." Mulder offered to fax Sohi information about defendant's grant program and a sample research proposal. A few hours later, Sohi responded by email, stating that he was interested in having defendant's support for the "multiscalar work" and that a sample proposal would be "nice."

The next day Mulder faxed Sohi an Intel brochure describing the grant program and a sample research...