Intel Corp. v. Via Technologies, Inc., C 99-03062 WHA.

• Decision Date: 20 November 2001
• Docket Number: No. C 99-03062 WHA.,C 99-03062 WHA.
• Citation: 174 F.Supp.2d 1038
• Court: U.S. District Court — Northern District of California
• Parties: INTEL CORPORATION, a Delaware corporation, Plaintiff, v. VIA TECHNOLOGIES, INC., a Taiwan corporation, and VIA Technologies, Inc., a California corporation, Defendants.

174 F.Supp.2d 1038

INTEL CORPORATION, a Delaware corporation, Plaintiff, v. VIA TECHNOLOGIES, INC., a Taiwan corporation, and VIA Technologies, Inc., a California corporation, Defendants.

No. C 99-03062 WHA.

United States District Court, N.D. California.

November 20, 2001.

Henry A. Petri, Jr., John F. Lynch, Arnold White & Durkee, Houston, TX, Joseph Kattan, Gibson Dunn & Crutcher, Washington, DC, James F. Valentine, Howrey Simon Arnold & White, LLP, Menlo Park, CA, Marc G. Schildkraut, Howrey Simon Arnold & White LLP, Washington, DC, for Plaintiff.

Robert P. Feldman, Leo Cunningham, Wilson Sonsini Goodrich & Rosati, John S. Ferrell, John S. Ferrell, Carr & Ferrell LLP, Palo Alto, CA, Laura Lee Engurasoff, Howery Simon Arnold & White, LLP, Menlo Park, CA, Michael S. Dowler, Howery Simon Arnold & White, LLP, Houston, TX, for Defendants.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON EXPRESS LICENSE DEFENSE FOR UNITED STATES PATENT NO. 6,006,291; DENYING PLAINTIFF'S CROSS-MOTION FOR SUMMARY JUDGMENT

ALSUP, District Judge.

INTRODUCTION

This case features an industry-wide standard for certain computer-chip specifications and the scope of a royalty-free cross-license covering the standard. Such standards promote progress. Without them, the industry would balkanize, improvements would slow, and consumers would suffer. A key issue, however, concerns patent rights. On the one hand, by definition, standards must be available and unencumbered for industry-wide use. On the other, property rights, an important incentive to innovate, need protection. This tension pervades the present motion in this hard-fought litigation between two chip manufacturers.

For the reasons given below, this order holds that VIA Technologies, Inc., is licensed to practice certain patent claims owned by Intel Corporation that are required to implement an industry-wide standard promoting so-called "Fast Write," a standard promulgated by Intel itself. The claims at issue are namely Claims 1, 4, 6, and 7 of United States Patent No. 6,006,291. VIA's motion for summary judgment is GRANTED. Intel's cross-motion for summary judgment is DENIED.¹

STATEMENT

The controversy concerns a signal protocol known as Fast Write. By way of background, the components of a computer system include separate chips mounted on a circuit board known as the motherboard. The system memory, microprocessor, chipset, and various input/output devices, such as modems, are all distinct components. In order to communicate with each other, each component chip must send its signals through the chipset, which acts as a translator between components. Both parties herein manufacture and sell chipsets.

The patent at issue in this motion, United States Patent No. 6,006,291, is entitled "High-Throughput Interface Between a System Memory Controller and a Peripheral Device." As discussed in greater detail in the claim construction order dated June 29, 2001, the '291 patent is directed to the discourse between a chipset and a graphics chip — specifically, the Fast-Write protocol. VIA concedes that some of its products practice Fast Write, i.e., Claims 1, 4, 6, and 7 of the '291 patent (VIA Exh. 50, at 2-3). It contends, however, that it does not infringe the '291 patent, invoking the defense of license. Intel argues that Fast Write is outside the scope of the royalty-free cross-license it granted to VIA and all other members of the computer industry signing on to its terms. Presented now is a question of interpretation of the industry-wide license.

* * * * * *

Except as otherwise noted, the following facts are not in dispute. At all relevant times, in the computer industry, IHVs (independent hardware vendors) fabricated the components of computer systems, such as graphic cards and chipsets, and OEMs (original equipment manufacturers) assembled the components and sold the finished product. Achieving component inter-operability was desirable. Doing so was difficult, however, because of the web of intellectual-property rights that could be implicated. One way that the industry dealt with this problem was through the formulation of industry standards. Standards were often promulgated by a special interest group (SIG) comprised of the interested parties pooling their experience and knowhow. Once a standard was agreed upon, the SIG published a specification explaining how to implement the technology and a license for those who wished to sign on.

Various licensing schemes were used. For example, PCI (peripheral component interconnect) was an industry standard relating to a bus (a set of lines carrying signals) connecting the chipset and peripheral devices. The first revision of the PCI Specification was available to anyone who signed a reciprocal royalty-free cross-license. In a more-recent standard called 1394, an external bus used for digital video, anyone implementing the specification was required to pay a royalty, which was divided among the members of a patent pool comprised of companies that had contributed intellectual property to the specification (Fair Dep. 16-17, 21).

Intel, the leading producer of microprocessors and chipsets, has been an important, if not the most important, leader in the development of industry standards. Intel has benefitted in its sale of chips by making computers themselves less expensive and better performing. In order to increase performance of PC's in general, Intel devoted considerable research and marketing efforts to supporting the PC platform, i.e., making sure that the components of a personal computer, other than the microprocessor and chipset, kept apace with the technological developments of the products Intel produced. This principle was internally known at Intel as the "balanced system" (e.g., Rash Dep. 32). The idea was that better overall performance of the PC would expand the market and increase sales.

1. AGP.

AGP (accelerated graphics port) was an industry standard developed by Intel. The development of AGP was spurred by the growing popularity of three-dimensional graphics applications, which required large amounts of memory and high-speed processing. Before AGP, graphics chips, shared a common bus to the core logic with all the other peripheral devices. This inhibited the three-dimensional graphics capabilities of personal computers. Intel perceived that this was a "bottleneck" to the performance of the "balanced system" (Aymar Dep. 30). As a result, Intel's engineers began designing a direct interface between the chipset and graphics devices known as the graphics-attach port ("GAP").² The name was eventually changed to AGP. No special interest group for AGP was formed. Instead, Intel controlled the entire endeavor.

In December 1995, Intel finished the first revision of what became the AGP 1.0 Specification (VIA Exh. 7). The final AGP 1.0 Specification was released in July 1996. AGP 1.0 offered significant improvements over the prior art. Not only did it call for a port dedicated to data transfers between the core logic and a graphics chip, but it established a new protocol for data transfers, performed at the initiative of a graphics chip. Unlike PCI, AGP allowed a graphics chip to send or receive blocks of data in bursts. Furthermore, it contained a feature known as 2x in which data could be transferred on the rising and trailing edge of every clock signal, effectively doubling transfer speed. AGP 1.0 is not immediately at issue herein, but it illuminates the history of the license at issue.

Before releasing the AGP 1.0 Specification, Intel began promoting AGP at trade shows and in the press. Intel admits that its representatives touted AGP as "an `open specification,' and [stated] that it would be accompanied by a reciprocal royalty-free license. In some statements Intel representatives likened the [s]pecification's openness to two existing specifications, the PCI Specification and the Universal Serial Bus ("USB") Specification" (Opp.5).³

The AGP 1.0 Specification and a license agreement entitled "Accelerated Graphics Port Interface Specification Agreement" could be downloaded from Intel's website. The agreement was binding once the party executing it signed and submitted it to Intel. The terms of this agreement were almost identical to the later-signed one at issue. VIA signed the AGP 1.0 agreement in December 1996 and began making chipsets that were compatible with graphics chips using AGP.

Intel continued to promote AGP after releasing the AGP 1.0 Specification. It published design guides providing technical information that helped implement AGP (Crepps Dep. 59). It provided technical support to industry members trying to implement the technology (id. at 46). It also sponsored "plug-fests," which were events where industry members could test their products to determine whether the products were AGP compatible (id. at 39).

Meanwhile, Intel was developing two improvements to the AGP 1.0 Specification. The first was known as 4x, which doubled the speed of 2x transfers by using clock strobes. The second was Fast Write. The latter enabled the chipset to instigate high-speed data transfers to the graphics chip. AGP 1.0 only allowed the graphics chip to initiate such transfers. With Fast Write, a chipset could blast data across the AGP interface on its own initiative. In December 1997, Intel privately filed a patent application on Fast Write. In May 1998, Intel publicly released the AGP 2.0 Specification, which taught how to implement 4x and Fast Write. Before releasing the AGP 2.0 Specification, the Intel attorney who drafted both AGP licenses, Joseph Bond, reviewed and edited the specification (Bond Dep. 65). When the AGP 2.0 Specification was released, Intel posted another license form on its website, the subject of this dispute.

Like AGP 1.0, Intel promoted AGP 2.0 before and after its release and continued to provide technical support and to hold plug-fests (Fair Dep. 67-71). At a trade show, for...