Brooktree Corp. v. Advanced Micro Devices, Inc.

• Decision Date: 09 October 1992
• Docket Number: 91-1259,Nos. 91-1258,s. 91-1258
• Citation: 24 USPQ2d 1401,977 F.2d 1555
• Parties: 1992 Copr.L.Dec. P 26,997, 24 U.S.P.Q.2d 1401 BROOKTREE CORPORATION, Plaintiff/Cross-Appellant, v. ADVANCED MICRO DEVICES, INC., Defendant/Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1555

977 F.2d 1555

1992 Copr.L.Dec. P 26,997, 24 U.S.P.Q.2d 1401

BROOKTREE CORPORATION, Plaintiff/Cross-Appellant, v. ADVANCED MICRO DEVICES, INC., Defendant/Appellant.

Nos. 91-1258, 91-1259.

United States Court of Appeals Federal Circuit.

Oct. 9, 1992.

Rehearing Denied; Suggestion for

Rehearing In Banc Declined

Jan. 4, 1993.

David E. Monahan, Gray, Cary, Ames & Frye, San Diego, Cal., argued, for plaintiff/cross-appellant. With him on the brief were John Allcock and Marcello E. Mihaila. Also on the brief was Ellsworth Roston, Roston & Schwartz, Los Angeles, Cal.

Donald R. Dunner, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C., argued, for defendant/appellant. With him on the brief were Allen M. Sokal and E. Robert Yoches. Also on the brief were Kenneth E. Keller, Alexander Brainerd Before NEWMAN, MICHEL, and RADER, Circuit Judges.

David Eiseman, IV, and Robert J. Stumpf, Jr., Bronson, Bronson & McKinnon, and Martin C. Fliesler, Fliesler, Dubb, Meyer & Lovejoy, San Francisco, Cal., of counsel.

PAULINE NEWMAN, Circuit Judge.

Brooktree Corporation brought suit against Advanced Micro Devices, Inc. (herein AMD) for patent infringement, 35 U.S.C. § 271, and infringement of mask work registrations, 17 U.S.C. § 910, in connection with certain semiconductor chips used in color video displays. The United States District Court for the Southern District of California entered judgment that the patents were valid and infringed and that the registered mask works were infringed, assessing damages. ¹

The principal issues on appeal arise under the Patent Act, of which the Federal Circuit has exclusive appellate jurisdiction, 28 U.S.C. § 1295(a)(1), and the Semiconductor Chip Protection Act, of which this court's appellate jurisdiction is pendent. Thus for issues of fact and law under the Semiconductor Chip Protection Act we apply the discernable law of the Ninth Circuit, in accordance with the principles set forth in Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1438-40, 223 USPQ 1074, 1086-87 (Fed.Cir.1984) (en banc ) (applying copyright law of the circuit in which the case was tried, thus avoiding creating new opportunities for forum shopping). Judicial consideration of the Semiconductor Chip Protection Act has thus far been sparse, and we have given particular attention to the statute and its history, for the parties dispute significant aspects of statutory interpretation.

This case occasioned a lengthy trial over the course of seven weeks before the jury, in consecutive determinations of liability and damages. The jury verdicts were the subject of duly filed motions for judgment notwithstanding the verdict and for a new trial, which motions were denied by the district court. AMD charges error on issues of mask work infringement and damages, and also on issues of patent validity, infringement, and willfulness. Brooktree cross-appeals certain damages rulings, and the denial of attorney fees under both the Patent Act and the Semiconductor Chip Protection Act.

I

MASK WORKS

The Semiconductor Chip Protection Act

The Semiconductor Chip Protection Act of 1984, Pub.L. 98-620, Title III, 98 Stat. 3347, codified at 17 U.S.C. §§ 901-914, arose from concerns that existing intellectual property laws did not provide adequate protection of proprietary rights in semiconductor chips that had been designed to perform a particular function. The Act, enacted after extensive congressional consideration and hearings over several years, adopted relevant aspects of existing intellectual property law, but for the most part created a new law, specifically adapted to the protection of design layouts of semiconductor chips.

Chip design layouts embody the selection and configuration of electrical components and connections in order to achieve the desired electronic functions. The electrical elements are configured in three dimensions, and are built up in layers by means of a series of "masks" whereby, using photographic depositing and etching techniques, layers of metallic, insulating, and semiconductor material are deposited in the desired pattern on a wafer of silicon. This set of masks is called a "mask work", and is part of the semiconductor chip product. The statute defines a mask work as:

a series of related images, however fixed or encoded

(A) having or representing the predetermined, three dimensional pattern of metallic, insulating, or semiconductor (B) in which series the relation of the images to one another is that each image has the pattern of the surface of one form of a semiconductor chip product.

material present or removed from the layers of a semiconductor chip product; and

17 U.S.C. § 901(a)(2). The semiconductor chip product in turn is defined as:

the final or intermediate form of any product--

(A) having two or more layers of metallic, insulating, or semiconductor material, deposited or otherwise placed on, or etched away or otherwise removed from, a piece of semiconductor material in accordance with a predetermined pattern; and

(B) intended to perform electronic circuitry functions.

17 U.S.C. § 901(a)(1).

The design of a satisfactory chip layout may require extensive effort and be extremely time consuming, particularly as new and improved electronic capabilities are sought to be created. A new semiconductor chip may incur large research and development costs, yet after the layout is imprinted in the mask work and the chip is available in commerce, it can be copied at a fraction of the cost to the originator. Thus there was concern that widespread copying of new chip layouts would have adverse effects on innovative advances in semiconductor technology, as stated in the Senate Report:

In the semiconductor industry, innovation is indispensable; research breakthroughs are essential to the life and health of the industry. But research and innovation in the design of semiconductor chips are threatened by the inadequacies of existing legal protection against piracy and unauthorized copying. This problem, which is so critical to this essential sector of the American economy, is addressed by the Semiconductor Chip Protection Act of 1984.

* * * * * *

The Semiconductor Chip Protection Act of 1984, ... would prohibit "chip piracy"--the unauthorized copying and distribution of semiconductor chip products copied from the original creators of such works.

S.Rep. No. 425, 98th Cong., 2d Sess., 1 (1984) (hereinafter Senate Report ).

In the evolution of the Semiconductor Chip Protection Act it was first proposed simply to amend the Copyright Act, 17 U.S.C. § 101 et seq., to include semiconductor chip products and mask works as subject of copyright. See H.R. 1028, 98th Cong., 1st Sess. (1983). However, although some courts had interpreted copyright law as applicable to computer software imbedded in a semiconductor chip, see Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1249, 219 USPQ 113, 121 (3d Cir.1983), cert. dismissed, 464 U.S. 1033, 104 S.Ct. 690, 79 L.Ed.2d 158 (1984), it was uncertain whether the copyright law could protect against copying of the pattern on the chip itself, if the pattern was deemed inseparable from the utilitarian function of the chip. Indeed, the Copyright Office had refused to register patterns on printed circuit boards and semiconductor chips because no separate artistic aspects had been demonstrated. Copyright Protection for Semiconductor Chips: Hearings on H.R. 1028 Before the Subcomm. on Courts, Civil Liberties, and the Administration of Justice of the House Comm. on the Judiciary, 98th Cong., 1st Sess., 77 (1983) (hereinafter 1983 House Hearings ) (statement of Dorothy Schrader, Associate Register of Copyrights for Legal Affairs). Concern was also expressed that extension of the copyright law to accommodate the problems of mask works would distort certain settled copyright doctrines, such as fair use. 1983 House Hearings at 16-17 (statement of Jon A. Baumgarten, Copyright Counsel, Association of American Publishers, Inc.)

The patent system alone was deemed not to provide the desired scope of protection of mask works. Although electronic circuitry and electronic components are within the statutory subject matter of patentable invention, see 35 U.S.C. § 101, and some original circuitry may be patentable if it also meets the requirements of the The Semiconductor Chip Protection Act of 1984 was an innovative solution to this new problem of technology-based industry. While some copyright principles underlie the law, as do some attributes of patent law, the Act was uniquely adapted to semiconductor mask works, in order to achieve appropriate protection for original designs while meeting the competitive needs of the industry and serving the public interest.

                Patent Act, as is illustrated in this case, Congress sought more expeditious protection against copying of original circuit layouts, whether or not they met the criteria of patentable invention.   Senate Report at 8
                

The Semiconductor Chip Protection Act provides for the grant of certain exclusive rights to owners of registered mask works, including the exclusive right "to reproduce the mask work by optical, electronic, or any other means", and the exclusive right "to import or distribute a semiconductor chip product in which the mask work is embodied". 17 U.S.C. § 905. Mask works that are not "original", or that consist of "designs that are staple, commonplace, or familiar in the semiconductor industry, or variations of such designs, combined in a way that, considered as a whole, is not original", are excluded from protection. 17 U.S.C. § 902(b). Protection is also not extended to any "idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated or embodied" in the mask work. 17 U.S.C. § 902(c).

The sponsors and supporters of this legislation foresaw that there would be areas of uncertainty in...