Crystal Semiconductor v. Tritech Microelectronics
| Decision Date | 07 March 2001 |
| Docket Number | 00-1006,PLAINTIFF-APPELLANT,Nos. 99-1558,DEFENDANTS-CROSS,1559,s. 99-1558 |
| Citation | 246 F.3d 1336,57 USPQ2d 1953 |
| Parties | (Fed. Cir. 2001) CRYSTAL SEMICONDUCTOR CORPORATION,, v. TRITECH MICROELECTRONICS INTERNATIONAL, INC. AND TRITECH MICROELECTRONICS INTERNATIONAL PTE LTD.,APPELLANTS, AND OPTI, INC., DEFENDANT |
| Court | U.S. Court of Appeals — Federal Circuit |
Wayne M. Harding, Brobeck, Phleger & Harrison Llp, of Austin, Texas, argued for plaintiff-appellant. With him on the brief were Kevin S. Kudlac, and Steven J. Pollinger. Of counsel on the brief was J.P. Violette, Crystal Semiconductor Corporation, of Austin, Texas.
Daniel Joseph, Akin, Gump, Strauss, Hauer & Feld, L.L.P., of Washington, Dc, argued for defendants-cross appellants. With him on the brief were C. Fairley Spillman; and Michael Rocco Cannatti, of Austin, Texas. Of counsel was Gary W. Hamilton, Akin, Gump, Strauss Hauer & Feld, L.L.P., of Austin, Texas. Also of counsel was Michael A. Piazza, Akin, Gump, Strauss, Hauer & Feld, L.L.P., of Dallas, Texas.
Before Mayer, Chief Judge, Clevenger, and Rader, Circuit Judge.
On a motion for partial summary judgment, the United States District Court for the Western District of Texas determined that OPTi Inc.'s (OPTi's) and TriTech Microelectronics International, Inc.'s (TriTech's) accused devices literally infringe Crystal Semiconductor Corporation's (Crystal's) U.S. Patent Nos. 4,746,899 ('899 patent) and 5,220,483 ('483 patent). See Crystal Semiconductor Corp. v. OPTi, Inc., No. A 97-CA-026 SS (W.D. Tex. Apr. 20, 1999). After the close of evidence but before the case went to the jury, the district court granted judgment as a matter of law (JMOL) that Crystal's U.S. Patent No. 4,851,841 (the '841 patent) was not invalid due to an on-sale bar. See Crystal Semiconductor Corp. v. OPTi, Inc., No. A 97-CA-026 SS (W.D. Tex. May 12, 1999).
At trial, the jury found that TriTech and OPTi willfully infringed all three patents and awarded damages in excess of $48 million. The district court granted TriTech's JMOL motion that Crystal was not entitled to lost profit or price erosion damages, and remitted Crystal's damages to a reasonable royalty of $10 million. See Crystal Semiconductor Corp. v. OPTi, Inc., No. A 97-CA-026 SS, slip op. at 8 (W.D. Tex. July 23, 1999) (Crystal). The district court then doubled Crystal's damages to $20 million due to TriTech's willful infringement. See id. at 19. The district court also awarded Crystal attorney fees but denied prejudgment interest. See id. at 21.
Because the district court properly granted partial summary judgment of infringement, this court affirms that portion of the judgment. However, because the district court improperly entertained Crystal's JMOL motion on the on-sale bar, this court vacates and remands. Further, because the district court properly granted TriTech's JMOL motion to deny price erosion damages, properly denied TriTech's JMOL motion to void the finding of willfulness, and acted within its discretion in denying prejudgment interest, this court affirms those parts of the judgment. However, because the record shows entitlement to lost profit damages and because the district court erred in its damages calculation, this court reverses and remands to the district court to enter an award as determined by this court.
Crystal, a subsidiary of Cirrus Logic, Inc., is the assignee of the '483, '841, and '899 patents. All three patents involve analog-to- digital (A/D) converter technology. A/D converters convert sound (or analog input voltage information) into digital information and are commonly used in the compact disc burners or sound cards of personal computer (PC) systems.
Sound may be recorded using either analog or digital signals. In an analog recording, sound is converted into an electrical signal by a device such as a microphone. The microphone generates an electrical signal that varies in proportion to changes in pitch, tone, and volume. The voltage signal is an analogous replica of the sound source, thus the name "analog" sound.
A digital recording converts the same sound source into a series of binary numbers, 1s and 0s. This digital signal represents the sound source. A digital signal is not continuous. Rather, it represents a "sampling" of the sound source at regular, closely spaced intervals. Each sample is analogous to a digital snapshot of the sound at a particular point in time. If the sampling is done frequently enough, the digital signal can accurately represent the sound source. Common A/D converters operate at approximately 44.1 kHz, meaning they sample sound approximately 44,100 times per second. In sum, an A/D converter transforms audio waveforms into series of bits. These bits can be processed and stored by a digital recording medium.
Earlier A/D converters were typically made of two or more separate converter circuit devices and several external components. These multiple bulky components operated on two or three power supply voltages. In the late 1970's, the semiconductor industry integrated A/D converters onto a single chip. These integrated-circuit A/D converters are smaller, more reliable, less costly, and consume less power. However, because the single chip design places many components in close proximity, electrical noise is an inherent problem. In particular, components for processing analog inputs generate high frequency bursts that interfere with components for digitizing the input voltage. This electrical noise causes digitization errors that distort the recording.
In general, Crystal's three patents-in-suit relate to techniques for reducing or eliminating the effects of electrical noise in integrated-circuit A/D converter chips. The '899 patent, issued on May 24, 1988, discloses a method for using clock technology to control electrical noise. Under the claimed method, a first clock signal samples the analog input voltage while a separate, delayed clock signal activates operation of the digital circuit. Because activation of the digital circuit is thus offset in time from the analog sampling, the activation signal does not interfere with the analog sampling, or vice versa.
The '841 patent, issued on July 25, 1989, claims an A/D converter with a sampling component called a delta-sigma modulator and a signal digitizing component called a digital decimation filter. These components reduce the effects of noise in the integrated chip. The patent also claims methods for reducing noise. The delta-sigma modulator has a feedback reference voltage input and the digital decimation filter uses impulse-response coefficients. The patent claims recite the reduction of noise through gain scaling -- setting the effective feedback reference voltage on the delta-sigma modulator to a value that is greater than the maximum analog input voltage and correspondingly adjusting the gain of the digital decimation filter.
The '483 patent, issued on June 15, 1993, claims a capacitor structure with a sub-circuit and a tri-layered, insulated capacitor. This capacitor has a guarding structure around the second layer (the sensitive node) to shield extraneous noise.
By 1994, Apple and Intel/Windows PCs included audio systems with stereo sound. These audio systems used a CODEC -- a combination A/D converter and digital-to-analog converter on a single chip. The CODEC transforms analog sound signals into digital form for processing on a PC, and also decodes the digital form back into analog sound so the user can hear it. Crystal incorporated its A/D converter technology, covered by the three patents-in-suit, into CODEC audio chips, and began selling the chips in the audio PC market in 1991. Early audio chips were of relatively low quality, with only eight bits of digitization per sample. Crystal's audio chips are sixteen-bit CODECs and provide higher quality sound than the eight-bit CODECs.
TriTech, a company with facilities in Singapore and California, designs, manufactures, and sells audio chips. In 1994, TriTech began manufacturing sixteen-bit audio CODECs in Singapore and selling the chips worldwide. TriTech sold some of these chips to OPTi, which in turn sold these audio chips under the name "Model 931" to the U.S. PC market.
By March 1995, Crystal reverse engineered several of OPTi's and TriTech's audio chips to determine whether the technology in these chips fell within the scope of Crystal's patents. On January 10, 1997, Crystal filed suit in the United States District Court for the Western District of Texas accusing both TriTech and OPTi of infringing Crystal's '899, '841, and '483 patents.
Following a hearing in January 1998, a special master construed the claims of these patents. J. App. 95-144.1. The district court adopted the Special Master's claim interpretation. Crystal then filed summary judgment motions alleging that the OPTi Model 931 audio chip literally infringed the '483 and '899 patents. The district court entered summary judgment that the Model 931 chips contain every element of claims 1, 6, 9, 10, 15, and 18 of the '483 patent and claims 1, 3, and 4 of the '899 patent. The court left to the jury to decide whether TriTech and OPTi had committed acts of infringement in the United States.
The district court conducted a jury trial on infringement, validity, enforceability, and damages. At the close of evidence, but before jury deliberation, the district court granted Crystal's motion for JMOL that the '841 patent was not invalid under an on-sale bar. The district court further granted Crystal's JMOL motion that the '899 and '841 patents were not unenforceable due to inequitable conduct and were not invalid for violating the best-mode requirement.
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