Intel Corp. v. U.S. Intern. Trade Com'n, Nos. 89-1459

• Citation: 946 F.2d 821,20 USPQ2d 1161
• Decision Date: 17 September 1991
• Docket Number: 89-1476 and 89-1534,Nos. 89-1459
• Parties: , 20 U.S.P.Q.2d 1161, 9 Fed. Cir. (T) 121 INTEL CORPORATION, Appellant, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Atmel Corporation, General Instrument Corporation and Microchip Technology Incorporated, Hyundai Electronics Industries Co., Ltd., and Hyundai Electronics America, Inc. and SEEQ Technology, Inc., Intervenors-Appellees. ATMEL CORPORATION, Appellant, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Intel Corporation and SEEQ Technology, Inc., Intervenors-Appellees. GENERAL INSTRUMENT CORPORATION and Microchip Technology Incorporated, Appellants, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Intel Corporation and SEEQ Technology, Inc., Intervenors-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 821

946 F.2d 821

13 ITRD 1717, 20 U.S.P.Q.2d 1161, 9

Fed. Cir. (T) 121

INTEL CORPORATION, Appellant, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Atmel Corporation, General Instrument Corporation and Microchip Technology Incorporated, Hyundai Electronics

Industries Co., Ltd., and Hyundai Electronics America, Inc.

and SEEQ Technology, Inc., Intervenors-Appellees.

ATMEL CORPORATION, Appellant, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Intel Corporation and SEEQ Technology, Inc., Intervenors-Appellees.

GENERAL INSTRUMENT CORPORATION and Microchip Technology

Incorporated, Appellants, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Intel Corporation and SEEQ Technology, Inc., Intervenors-Appellees.

Nos. 89-1459, 89-1476 and 89-1534.

United States Court of Appeals Federal Circuit.

Sept. 17, 1991.

Rehearing Denied Oct. 24, 1991.

James J. Elacqua, Arnold, White & Durkee, of Houston, Tex., argued for Intel Corp., appellant in 89-1459 and intervenor-appellee in 89-1476 and 89-1534. With him on the brief were Jack C. Goldstein, Hilary E. Pearson, Timothy N. Trop, Thomas A. Miller, Danny L. Williams, Russell T. Wong, Anne E. Brookes and Richard L. Stanley. Also on the brief was Carl Silverman, Intel Corp., Santa Clara, Cal., of counsel.

Judith M. Czako, Office of the Gen. Counsel, U.S. Intern. Trade Com'n, of Washington, D.C., argued for appellee. With her on the brief were Lyn M. Schlitt, General Counsel, James A. Toupin, Asst. Gen. Counsel and John M. England, Jr. Robert C. Morgan, Fish & Neave, of New York City, argued for Atmel Corp., appellant in 89-1476 and intervenor-appellee in 89-1459. With him on the brief were Thomas L. Secrest, Wayne M. Kennard and Gerry Ann Fifer.

Stephen B. Judlowe, Hopgood, Calimafde, Kalil, Blaustein & Judlowe, of New York City, argued for General Instrument Corp. and Microchip Technology, Inc., appellant in 89-1534 and intervenor-appellee in 89-1459. With him on the brief were Marvin N. Gordon, Brian P. Murphy and Joel Miller.

James W. Geriak and Thomas J. Morgan, Lyon & Lyon, of Los Angeles, Cal., represented SEEQ Technology, Inc., intervenor-appellee.

Philip J. Mause, Thelen, Marrin, Johnson & Bridges, of Washington, D.C., was on the brief for Hyundai Electronics Industries, intervenor-appellee.

Before ARCHER, Circuit Judge, COWEN, Senior Circuit Judge, and MAYER, Circuit Judge.

ARCHER, Circuit Judge.

Intel Corporation (Intel), Atmel Corporation (Atmel), and General Instrument Corporation and Microchip Technology Incorporated (collectively GI/M) have each filed an appeal from certain aspects ¹ of the Opinion (Decision) and Order, issued March 16, 1989, by the United States International Trade Commission (Commission), in Certain Erasable Programmable Read Only Memories, Components Thereof, Products Containing Such Memories, And Processes For Making Such Memories, 12 ITRD 1088 (1989). The Order prohibited Atmel and GI/M (and other parties in that proceeding) from importing into the United States certain Erasable Programmable Read-Only Memories (hereinafter EPROMs) ² found to infringe one or more of Intel's United States patents. ³ We affirm-in-part, reverse-in-part, and vacate-in-part.

I

An investigation was begun by the Commission in September 1987, under section 337 of the Tariff Act of 1930, codified as amended at 19 U.S.C. § 1337 (1988), in response to a complaint filed by Intel alleging unfair acts and unfair methods of competition in the importation and sale of certain EPROMs by seven respondents, including Atmel and GI/M. See 19 U.S.C. § 1337(a)(1) (1988).

In the complaint, Intel alleged that the respondents violated section 337 by importing EPROMs which infringed six Intel U.S. product patents and two Intel U.S. process patents (one of which was withdrawn from consideration). ⁴ Section 337 permits the Commission to exclude from the United States any goods that violate the provisions of that section. 19 U.S.C. § 1337(e)(1). The Commission may also order any party violating section 337 "to cease and desist from engaging in the unfair methods or acts involved." 19 U.S.C. § 1337(f)(1).

The respondents challenged the validity and enforceability of the asserted patents, as well as Intel's allegations of infringement. The investigation was assigned to an administrative law judge (ALJ) who produced a 350-page initial determination (ID) detailing the facts and resolving the numerous issues presented by the parties. On review of the ID, the Commission affirmed many of the ALJ's determinations, ordered review of certain portions of the ID, and requested written submissions on those and other issues. In another prodigious effort, the Commission made 143 pages of additional findings and conclusions. The following table summarizes how the Commission disposed of the validity and infringement issues for each of the Intel patents: ⁵

On the basis of its Decision, the Commission entered a limited exclusion order preventing the importation of, inter alia, the EPROMs manufactured abroad by or for Atmel (64K, 256K, 51 Series, and 1024K), and GI/M (256K and 51 Series). Order at 7-8. In addition, the Commission ordered Atmel and GI/M to cease and desist from "importing, selling for importation, assembling, testing, performing manufacturing steps with respect to, using, marketing, distributing, offering for sale, or selling" EPROMs which were determined to be infringing. Decision at 5.

The issues before us on appeal and cross-appeal include: (1) Atmel's claim that its EPROMs are noninfringing because they are manufactured by Sanyo Electric Co., Ltd. and Tokyo Sanyo Electric Co., Ltd. (collectively Sanyo) under a broad cross-licensing agreement between Sanyo and Intel; (2) Atmel's claim that the '084 patent is invalid; (3) Atmel's and GI/M's challenge to the Commission's finding that their "old" 51 Series EPROM's infringe the '084 patent; (4) Atmel's and GI/M's claim that Intel's '050 patent is invalid and not infringed; (5) GI/M's challenge to the validity of claim 2 of the '394 patent; (6) Intel's argument that GI/M cannot challenge the '394 patent's validity because of the doctrine of assignor estoppel; and (7) Atmel's and GI/M's claim that their EPROMs do not infringe claim 2 of the '394 patent. ⁸

II

A. Atmel argues that its EPROMs did not infringe any of the Intel patents because the EPROMs were made by Sanyo under Sanyo's cross-licensing agreement with Intel (the Intel/Sanyo agreement). The agreement grants Sanyo the right to make, use and sell "any Sanyo ... products" under Intel's patents. Intel contends that Sanyo is not licensed to manufacture another corporation's goods, i.e., under industry terminology Sanyo may not act as a "foundry." Because Intel licensed only Sanyo products, ⁹ Intel argues that the cross-license did not authorize Sanyo to manufacture Atmel-designed EPROMs for Atmel, for that would be the manufacture of "Atmel" products rather than "Sanyo" products. The ALJ framed the license defense issue as "whether Sanyo was licensed by Intel to make an Atmel EPROM, using Atmel's design, putting Atmel's name and product designation on the EPROM, and selling the EPROM to Atmel for resale as an Atmel product." ID at 25.

If the Intel/Sanyo agreement permits Sanyo to act as a foundry for another company for products covered by the Intel patents, the purchaser of those licensed products from Sanyo would be free to use and/or resell the products. Such further use and sale is beyond the reach of the patent statutes. See United States v. Univis Lens Co., 316 U.S. 241, 250-52, 62 S.Ct. 1088, 1093-94, 86 L.Ed. 1408 (1942) (the first vending of any article manufactured under a patent puts the article beyond the reach of the patent).

Section 14.5 of the Intel/Sanyo agreement states that "[t]his Agreement shall be governed by and subject to and construed according to the laws of the State of California." Under California law, the interpretation of a contract is a question of law, to the extent that it is based on the language of the agreement. Clark v. Rancho Santa Fe Ass'n, 216 Cal.App.3d 606, 618, 265 Cal.Rptr. 41, 47 (1989); see also Kern Oil & Refining Co. v. Tenneco Oil Co., 840 F.2d 730, 736 (9th Cir.1988). When interpreting a contract, we must, where possible, give meaning and purpose to every term used in the contract. See, e.g., Beck v. American Health Group Int'l, Inc., 211 Cal.App.3d 1555, 1566, 260 Cal.Rptr. 237, 244 (1989) (citing Jensen v. Traders & General Ins. Co., 52 Cal.2d 786, 345 P.2d 1 (1959)); see also Fortec Constructors v. United States, 760 F.2d 1288, 1292 (Fed.Cir.1985). In resolving what the parties meant by limiting the license only to Sanyo products, we try to ascertain and give effect to the intent of the parties at the time the contract was signed. See Moss Dev. Co. v. Geary, 41 Cal.App.3d 1, 9, 115 Cal.Rptr. 736, 741 (1974); Cal.Civ.Code. §§ 1636, 1641, 1652-53 (1985); see also Ralden Partnership v. United States, 891 F.2d 1575, 1577 (Fed.Cir.1989).

In determining that the Intel/Sanyo agreement did not cover foundry rights, the ALJ reasoned:

It is reasonable to assume that the parties meant to exclude parts that one party made as foundry for another company, using the other company's design, parts intended to be sold as the other company's parts under the other company's name, and not just used as Sanyo components in a larger product made by another company.

The interpretation of the licensing agreement as proposed by Atmel would mean that any company that was unable to obtain a license from Intel but still wanted to make its own parts practicing Intel patents could employ Sanyo as a foundry and circumvent Intel's patents. Without something to explain why the parties would have intended such a result, the agreement will not be given this strained construction.

ID at 28 (citation omitted, emphasis added). By not reviewing the ALJ's decision on this issue, the Commission adopted that decision. Commission Rule...