Texas Inst. Inc. v. Tessera Inc & US Trade Comm.

• Decision Date: 07 November 2000
• Citation: 56 USPQ2d 1674,231 F.3d 1325
• Parties: (Fed. Cir. 2000) TEXAS INSTRUMENTS INCORPORATED, Plaintiff-Appellant, v. TESSERA, INC., Defendant-Appellee, and U.S. INTERNATIONAL TRADE COMMISSION Defendant-Appellee. 00-1381 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1325

231 F.3d 1325 (Fed. Cir. 2000)

TEXAS INSTRUMENTS INCORPORATED, Plaintiff-Appellant, v. TESSERA, INC., Defendant-Appellee, and U.S. INTERNATIONAL TRADE COMMISSION Defendant-Appellee.

00-1381

United States Court of Appeals for the Federal Circuit

DECIDED: November 7, 2000

Appealed from: United States District Court for the Central District of California

Kenneth R. Adamo, Jones, Day, Reavis & Pogue, of Dallas, Texas, argued for plaintiff-appellant. With him on the brief were Mark N. Reiter, and Michael J. Newton. Of counsel on the brief were Gregory A. Castanias, and Lawrence D. Rosenberg, Jones, Day, Reavis & Pogue, of Washington, DC. Also of counsel on the brief was Jay C. Johnson, Texas Instruments Incorporated, of Dallas, Texas.

Michael A. Ladra, Wilson Sonsini Goodrich & Rosati, of Palo Alto, California, argued for defendant-appellee, Tessera, Inc. With him on the brief was James C. Otteson.

Michael Diehl, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, argued for defendant-appellee, U.S. International Trade Commission. With him on the brief were Lyn M. Schlitt, General Counsel; and James A. Toupin, Deputy General Counsel.

Judge David O. Carter

Before NEWMAN, LOURIE, and RADER, Circuit Judges.

Opinion for the court filed by Circuit Judge RADER. Dissenting opinion filed by Circuit Judge LOURIE.

RADER, Circuit Judge.

In the United States District Court for the Central District of California, Texas Instruments Incorporated (TI) sought to enjoin Tessera, Inc. (Tessera) from continued participation in an International Trade Commission (ITC) infringement action that Tessera had initiated. The district court denied TI's motion. Because the license agreement between TI and Tessera requires any litigation, including ITC proceedings under Section 337 of the Tariff Act of 1930, to occur in the State of California, this court vacates and remands to the district court to re-entertain TI's preliminary injunction motion. ¹

I.

On November 1, 1996, TI entered into a "Limited TCC? License Agreement" with Tessera. The license agreement covers technology claimed in several of Tessera's United States patents. The technology relates to chip scale packaging, a semiconductor package with connections between the semiconductor chip and a circuit board underneath the chip, within the periphery of the chip itself. Tessera designates this type of chip package with the brand name "TCC?," for Tessera Compliant Chip. TCC?s occupy less space on a circuit board than conventionally packaged chips, a feature which is particularly attractive in applications such as cellular phones.

The license agreement between Tessera and TI contains a clause that governs the law and venue that applies to the agreement:

Governing Law. This Agreement shall be governed, interpreted and construed in accordance with the laws of the States [sic] of California as if without regard to its provisions with respect to conflicts of Laws. Both parities [sic] shall use their best efforts to resolve by mutual agreement any disputes, controversies, claims or difference which may arise from, under, out of or in connection with this Agreement. If such disputes, controversies, claims or differences cannot be settled between the parties, any litigation between the parties relating to this Agreement shall take place in California. The parties hereby consent to personal jurisdiction and venue in the state and federal courts of California.

(Emphasis added.)

In April 1999, Tessera requested royalties for a class of TI imports known as "MicroStar BGA." Tessera sought royalties under its United States Patents Nos. 5,679,977, "Semiconductor Chip Assemblies, Methods of Making Same and Components for Same" ('997 patent); 5,852,326, "Face-Up Semiconductor Chip Assembly" ('997 patent); and 5,347,159, "Semiconductor Chip Assemblies with Face-Up Mounting and Rear-Surface Connection to Substrate." After negotiations, TI and Tessera could not agree on whether the license agreement covered the accused TI products. Therefore, on January 17, 2000, Tessera notified TI of its termination of the license agreement. In response to Tessera's notice of termination, TI filed an action for declaratory judgment of invalidity and non-infringement in the United States District Court for the Central District of California on February 1, 2000.

On March 28, 2000, Tessera filed a complaint with the ITC, under Section 337 of the Tariff Act of 1930, charging that TI's importation of the MicroStar BGA products and certain importations by others infringe the '997 and '326 patents. See 19 U.S.C. 1337 (1994).

On April 4, 2000, TI applied for a Temporary Restraining Order (TRO) and an order requesting an expedited preliminary injunction hearing in the California district court. TI requested the court to restrain Tessera "from pursuing any disputes, controversies, claims or differences . . . against TI that arise from, under, out of or in connection with" the license agreement, in any place outside California. TI asserted that because the ITC tribunal is located in Washington, D.C., Tessera's ITC complaint violated the license agreement. TI further explained that the ITC determines whether to initiate an investigation within thirty days of the filing of a complaint. TI considered its request for an expedited preliminary injunction hearing warranted because Tessera could not simply withdraw its complaint once the ITC initiated an investigation. The district court denied TI's application for a TRO and set the preliminary injunction hearing date for May 1, 2000.

On April 27, 2000, the ITC instituted an investigation into the allegedly infringing imports. See In the Matter of Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Investigation No. 337-TA-432 (April 27, 2000). The ITC's Notice of Investigation named TI, Sharp Corporation, and Sharp Electronics Corporation as respondents. Id. That same day, the ITC made a motion, under Fed. R. Civ. P. 24, for leave to intervene in the preliminary injunction hearing at the district court "for the purpose of opposing [TI's] motion to enjoin [Tessera] from pursuing claims . . . through the ITC."

On May 2, 2000, the district court granted ITC's motion to intervene and denied TI's motion for a preliminary injunction. See Texas Instruments Inc. v. Tessera, Inc., 192 F.R.D. 637 (C.D. Cal. 2000) (TI I). The district court found that TI was not likely to succeed on the merits of its claim that the governing law clause covered ITC proceedings. The district court concluded that the agreement's governing law clause "is limited to 'litigation' and that [TI] has not established a likelihood of proving that [Tessera's] action before the ITC is litigation." TI I, at 640. In reaching this conclusion, the district court relied on the definition of "litigation" in the Cal. Code of Civ. Proc., section 391(a) (1994), "Vexatious Litigants." In that section, "litigation" means 'any civil action or proceeding, commenced, maintained or pending in any state or federal court.'" TI I, at 640 (quoting Cal. Code Civ. Proc. 391(a)). Based on this definition, the trial court found that the term "litigation" in the agreement "doesn't limit the parties' federal right to administrative redress." Id. The district court further found that enjoining Tessera's participation would be an impermissible interference with the ITC's statutorily authorized proceedings. TI appeals, invoking this court's jurisdiction of interlocutory appeals under 28 U.S.C. 1292(c)(1) (1994).

II.

This court generally views the grant or denial of a preliminary injunction as a procedural issue not unique to the exclusive jurisdiction of the Federal Circuit. See Mikohn Gaming Corp. v. Acres Gaming, Inc., 165 F.3d 891, 894, 49 USPQ2d 1308, 1310 (Fed. Cir. 1998); see also Chrysler Motors Corp. v. Auto Body Panels of Ohio, Inc., 908 F.2d 951, 952, 15 USPQ2d 1469, 1470 (Fed. Cir. 1990). When reviewing "procedural matters not unique to the areas that are exclusively assigned to the Federal Circuit," this court generally applies the procedural law of the regional circuit in which the case originated. Nat'l Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1188 n.2, 37 USPQ2d 1685, 1686 n.2 (Fed. Cir. 1996). This court, however, applies its own body of precedent to uniformly deal with procedural matters arising from substantive issues in areas of law within the unique jurisdiction of this circuit. See Mikohn Gaming, 165 F.3d at 894, 49 USPQ2d at 1310; see also Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1360, 50 USPQ2d 1672, 1675-76 (Fed. Cir.) cert. denied, 120 S. Ct. 527 (1999).

TI's preliminary injunction motion was a request for the district court to enjoin Tessera from continued participation in an ITC proceeding. This court has exclusive appellate jurisdiction over ITC determinations made under section 337 of the Tariff Act of 1930. See 28 U.S.C. 1295(a)(6) (1994). Thus, TI's appeal relates to a procedural matter arising from substantive issues in an area of law within the unique jurisdiction of this circuit. This circuit's procedural law, therefore, applies to the district court's order under review. Under Federal Circuit law, this court sustains a grant or denial of a preliminary injunction unless the district court abused its discretion, or based its decision on an erroneous legal standard or clearly erroneous findings of fact. See Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 F.3d 1374, 1377, 47 USPQ2d 1683, 1685 (Fed. Cir. 1998); see also Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1449, 7 USPQ2d 1191, 1194 (Fed. Cir. 1988).

The district court's order denying TI's motion for a preliminary injunction also presents an issue concerning interpretation of a license agreement. General contract interpretation is not within the exclusive jurisdiction of the Federal Circuit. The Supreme...