Home Semiconductor Corp. v. Samsung Elecs. Co.
| Decision Date | 14 January 2020 |
| Docket Number | Civil Action No. 13-2033-RGA |
| Parties | HOME SEMICONDUCTOR CORPORATION, Plaintiff, v. SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., and SAMSUNG AUSTIN SEMICONDUCTOR, LLC, Defendants. |
| Court | U.S. District Court — District of Delaware |
Presently before the court in this patent infringement action is a motion to dismiss for lack of standing pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(h)(3) filed by defendants Samsung Electronics Co., Ltd. ("SEC"), Samsung Electronics America, Inc. ("SEA"), Samsung Semiconductor, Inc. ("SSI"), and Samsung Austin Semiconductor, LLC ("SAS") (collectively, "Samsung"). (D.I. 175) For the reasons that follow, the court recommends GRANTING Samsung's motion to dismiss without prejudice.1
On December 16, 2013, plaintiff Home Semiconductor Corporation ("HSC")2 originally filed this patent infringement action against SEC, SEA, Samsung Telecommunications America, LLC ("STA"), and SSI, alleging infringement of United States Patent Numbers 5,452,261 ("the '261 patent"), 6,030,893 ("the '893 patent"), 6,146,997 ("the '997 patent"), and 6,150,244 ("the '244 patent"). (D.I. 1 at ¶¶ 2-5, 17-21) Only the '997 patent and the '261 patent remain as the Patents-in-Suit (the "Patents-in-Suit"). The '997 patent and '261 patent relate to methods of manufacturing semiconductor devices. The Second Amended Complaint avers that HSC is the owner by assignment of the Patents-in-Suit, and alleges that Samsung's dynamic random-access memories ("DRAMs"), NAND flash memories, and processors are infringing products. (D.I. 188 at ¶¶ 17-18, 24-41)
On May 14, 2014, HSC filed its First Amended Complaint (the "First Amended Complaint"), which added SAS as a defendant. (D.I. 21) On December 17, 2014, Samsung filed petitions for inter partes review ("IPR") of the '893 patent, the '997 patent, and the '244 patent before the Patent Trial and Appeal Board ("PTAB") of the United States Patent and Trademark Office ("USPTO"). (D.I. 55) The present case was stayed and administratively closed pending the IPRs on December 22, 2014. (Id.; D.I. 56) The asserted claims of the '893 patent, the asserted claims of the '244 patent, and claims 1 and 3-8 of the '997 patent were found unpatentable at the conclusion of the IPRs. (D.I. 66) The stay was lifted on November 9, 2017, and on November 28, 2017, a supplemental scheduling order was entered. (D.I. 67; D.I. 70)
On June 11, 2018, HSC dismissed defendant STA, because it had merged into SEA. (D.I. 79; D.I. 80) On June 12, 2018, HSC dismissed its claims with respect to the '893 patent and the '244 patent. (D.I. 81; D.I. 82) On December 28, 2018, HSC filed a motion for leave to amend the First Amended Complaint to add a claim of infringement of the '997 patent under 35 U.S.C. § 271(g).3 (D.I. 108; D.I. 109)
On May 1, 2019, Samsung filed the present motion to dismiss for lack of standing. (D.I. 175) On May 16, 2019, in a Memorandum Opinion, the court granted HSC's motion for leave to amend the First Amended Complaint. (D.I. 186; D.I. 187) On May 17, 2019, HSC filed its Second Amended Complaint (the "Second Amended Complaint"). (D.I. 188)
The '261 patent was invented by Jinyong Chung and Michael A. Murray, who assigned the patent to Mosel Vitelic Inc. ("Mosel Vitelic") on September 7, 1994. (D.I. 188 at ¶ 17; D.I. 177, Ex. 4) The '997 patent was invented by Jacson Liu and Jing-Xian Huang, who assigned the patent to Mosel Vitelic on September 29, 1999. (D.I. 188 at ¶ 18; D.I. 177, Ex. 5) ProMOS Technologies Inc. ("ProMOS") acquired the '261 patent and the '997 patent from Mosel Vitelic on June 20, 2005 and May 24, 2004 respectively. (D.I. 177, Ex. 6; Ex. 7)
On February 27, 2013, ProMOS and Home Semiconductor, Inc. of Samoa ("HSI")4 executed a Patent Transfer and License Agreement ("PTLA"). (D.I. 177, Ex. 8) Pursuant to thePTLA, ProMOS retained "an irrevocable, non-terminable, non-exclusive license, without the right to sublicense, under the claims of the Transferred Patents, to make, have made, design, have designed, use, sell, offer for sale, import or otherwise dispose of any products." (Id. at § 2(a)) ProMOS retained thirty-five percent of the aggregate Net Licensing Revenues5 above one million dollars. (Id. at § 3(b)) The PTLA included a side letter agreement that provided that:
[P]rior to the commencement of any patent enforcement action brought by HSI against one or more alleged infringers, HSI will provide to ProMOS a patent enforcement plan for its review and commentary. ProMOS and HSI will confer in good faith regarding the alleged infringers in which patent enforcement action(s) shall be brought. However, HSI agrees not to bring any patent enforcement action against Hynix and Elpida unless authorized by ProMOS.
(D.I. 177, Ex. 8) Hsu Kuei-Jong ("Mr. Hsu") signed the PTLA as President and CEO of HSI. (Id.)
On September 23, 2013, Home Semiconductor Corporation, a Samoa corporation ("HSC Samoa"), executed a Patent Agreement (the "Patent Agreement") that assigned its interests in several patents, including the '261 patent and the '997 patent, to plaintiff. (D.I. 177, Ex. 11) On the same day, HSC Samoa and plaintiff executed a promissory note in the amount of one million dollars for the purported transfer of the Patents-in-Suit that matured on September 22, 2018, but was never paid. (D.I. 177, Ex. 12; Ex. 21 at 136:15-137:5) Mr. Hsu signed the Patent Agreement as Director and CEO of HSC. (D.I. 177, Ex. 11)
On March 25, 2015, HSI and ProMOS entered into a Patent Cooperation Agreement (the "PCA"), wherein ProMOS appointed HSI as "the exclusive agent to monetize the ProMOS Patent Portfolio," which included the '261 patent and the '997 patent. (D.I. 177, Ex. 13 at § 2(a))HSI represented that it was "the sole and lawful owner of the HSI Patent Portfolio and ha[d] the right to monetize such patents under [the PCA]." (Id. at § 8(c))
On November 20, 2017, HSI and SK Hynix Inc., a third party, entered into a Covenant Not to Sue Agreement (the "Covenant Not to Sue"), wherein both parties agreed not to initiate any legal action against each other with respect to HSI's patents, which included the '261 patent and the '997 patent. (D.I. 177, Ex. 15 at ¶¶ 2.1, 2.2) Specifically, the Covenant Not to Sue stated:
(Id.) Mr. Hsu signed both the PCA and Covenant Not to Sue as the President of HSI. (D.I. 177, Ex. 13; Ex. 15)
Standing to sue is a threshold requirement in every federal case. See Warth v. Seldin, 422 U.S. 490, 498 (1975). Whether a plaintiff has standing to sue is a matter of law to be determined by the court. See Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d 870, 873 (Fed. Cir. 1991). "Because the court (and not a jury) decides standing, the district court must decide issues of fact necessary to make the standing determination." Crayton v. Concord EFS, Inc. (In re ATM Fee Antitrust Litig.), 686 F.3d 741, 747 (9th Cir. 2012). "The party bringing the action bears the burden of establishing that it has standing." Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir. 2005).
A "patentee" has standing to bring a civil action for patent infringement. See 35 U.S.C. § 281. The "patentee" is the owner of the patent, either by issuance or assignment. See 35 U.S.C. § 100(d). An assignment by the patent title holder thus gives the assignee standing to bring an infringement action in his or her own name. See Vaupel Textilmaschinen KG, 944 F.2d at 875; see also Waterman v. Mackenzie, 138 U.S. 252, 255 (1891). A patent owner's transfer of "all substantial rights" in the asserted patents to an exclusive licensee "is tantamount to an assignment of those patents to the exclusive licensee, conferring standing to sue solely on the licensee" and divesting the patent owner of any right to sue. Alfred E. Mann Found. for Scientific Research v. Cochlear...
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