Further to our July 27, 2012 post, on August 17, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Semiconductor Chips and Products Containing Same (Inv. No. 337-TA-753).

By way of background, the Complainant in this investigation is Rambus Inc. of Sunnyvale, California (“Rambus”).  Rambus accused Respondents of infringing certain claims of U.S. Patent Nos. 6,470,405; 6,591,353; and 7,287,109 (collectively, “the Barth patents”), and Nos. 7,602,857 and 7,715,494 (collectively, “the Dally patents”).  Although the Notice of Investigation named numerous respondents, many were terminated due to settlement.  In particular, Mediatek Inc., Audio Partnership PLC, and Oppo Digital, Inc. settled with Rambus following the ALJ’s issuance of the ID.  Two remaining Respondents are LSI Corporation (“LSI”) and STMicroelectronics N.V. and STMicroelectronics Inc. (collectively, “STMicro”).  With LSI and STMicro as additional Respondents are seven of their respective customers.

On March 2, 2012, ALJ Theodore R. Essex issued the Final Initial Determination (“ID”) finding no violation of Section 337 because all of the asserted claims (in both patent families) were found to be invalid in view of certain prior art under 35 U.S.C. §§ 102 and 103.  The Barth patents were also found to be unenforceable under the doctrine of unclean hands by virtue of Rambus’s destruction of documents.  The ID also found that Rambus had exhausted its rights under the Barth patents as to certain products of one respondent.  The ID found that all of the asserted patent claims were infringed and rejected numerous affirmative defenses raised by the Respondents.  See our March 7, 2012 post for more details.

On May 3, 2012, the Commission issued a notice determining to review the ID in its entirety.  The Commission requested the parties to brief issues relating to claim construction, validity, infringement, unclean hands, inequitable conduct, domestic industry, and standing.  Each will be discussed in turn.

Claim Construction

Rambus and Respondents petitioned for review of the terms “output frequency,” “processor,” and “transmitter circuit” / “transmitter” as used in the Dally patents.  The Commission confirmed the ALJ’s construction of “output frequency” to mean “output data rate,” confirmed the ALJ’s finding that Respondents waived their arguments regarding the term “processor,” and determined that the terms “transmitter circuit” and “transmitter” should be given their plain and ordinary meaning.


The Commission affirmed the ALJ’s conclusion that all of the asserted claims are invalid under 35 U.S.C. §§ 102 or 103.  As to the Dally patents, the Commission affirmed the ALJ’s determination that an article written by two IBM scientists entitled “Single-Chip 4x500Mbaud CMOS Transceiver” (“Widmer Article”) anticipates claims 1, 4-6, 9-10, 24-28, 35-36, 39-44, 47, and 53 of the Dally ‘857 patent, and claims 1, 2, 6, and 8 of the Dally ‘494 patent.  All remaining asserted claims of the Dally patents were determined to be invalid as obvious over the Widmer Article in view of an article entitled “Single Chip 1062Mbaud CMOS transceiver for Serial Data Communication” (“Ewen Article”).

As to the Barth patents, the Commission affirmed ALJ Essex’s determination that certain Barth patent claims were anticipated by Japanese Pat. Pub. No. 3-276344 (“Yano”), European Pat. App. No. 94,304,672.2 (“Dan”), NextBus Specification, U.S. Pat. No. 5,313,624 (“Harriman”), and U.S. Pat. No. 5,218,684 (“Hayes”).  Further, the Commission affirmed the ALJ’s obviousness conclusions regarding the combination of U.S. Pat. No. 5,584,037 (“Farmwald”) with the Yano, Dan, NextBus, or Harriman references.  In particular, the Commission noted that it would be obvious to combine the teachings of asynchronous memory systems (such as Yano or Dan) with Farmwald’s synchronous memory system because asynchronous systems had functionalities well-known to a person of ordinary skill in the art, which could be combined with synchronous systems to achieve “predictable results” under KSR v. Teleflex.  The fact that it took a “consensus-oriented organization” multiple years to arrive at an agreed-upon combination of prior art elements did not alter the Commission’s decision.

Inequitable Conduct

The Commission affirmed the ALJ’s ultimate conclusion of no inequitable conduct; however, its decision with respect to materiality differed from that of the ALJs.  “[R]espondents argued that the Barth patents are unenforceable because the inventors withheld a SyncLink standards document from the PTO during prosecution,” which disclosed a standard for high-speed memory interfaces that Respondents argued anticipated certain claims of the Barth ‘109 patent.  In the ID, the ALJ found that the SyncLink standard document was cumulative and, therefore, not material.  The ALJ also found that the named inventors and prosecution counsel lacked a specific intent to deceive the PTO.

On review, the Commission determined that Respondents failed to prove that the SyncLink standards documents were anticipatory, given that the sole document relied upon for inequitable conduct was found not to be prior art.  In addition to finding that the materiality prong was not met, the Commission affirmed the ALJ’s determination that Respondent’s failed to show a specific intent to deceive.


As to direct infringement, the Commission determined that all asserted claims of the Barth and Dally patents are infringed by Respondents’ accused products, excluding the multiple-transmitter claims of the Dally ‘857 patent and the Dally ‘494 method claims (as applied to LSI or Cisco’s accused products).

Regarding indirect infringement, the Commission affirmed the ALJ’s findings that Respondents induced and contributorily infringed the method claims of both patent families.  For inducement, intent to cause infringement was found in light of certain advertisements promoting an infringing use and further in view of product instructions directing end users to operate the accused products in an infringing manner.  The Commission also found that Respondents’ self-proclaimed “plausible litigation defenses” were insufficient to establish a lack of specific intent.  With respect to contributory infringement, the Commission presumed Respondents’ knowledge of infringement because no substantial noninfringing uses were established at trial, citing Spansion Inc. v. ITC, 629 F.3d 1331, 1355 (Fed. Cir. 2010).

Domestic Industry

The Commission reversed the ALJ’s determination that Rambus had satisfied the economic prong of the domestic industry requirement, finding that Rambus had not met its burden of proving a “substantial investment” in the exploitation of the patents.  Specifically, the Commission determined that circumstantial evidence of Rambus’s licensing revenues and the number of its licenses, standing alone, were an inadequate proxy for its licensing-based investments, and that Rambus was required under Section 337(a)(3)(C) to provide at least some direct evidence of specific licensing-based investments directed to the asserted patents.

Unclean Hands

The Commission affirmed the ALJ’s finding of unclean hands as to the Barth patents based on Rambus’s document destruction occurring after July 1998, when infringement litigation was determined to be reasonably foreseeable.  In view of this, and the ALJ’s determination that Rambus did not carry its burden of showing no prejudice as a result of the document destruction, the Commission affirmed the ALJ’s conclusion that no lesser sanctions were appropriate under the circumstances, and held the Barth patents unenforceable.


As a bona fide purchaser of the Dally patents, the Commission determined that Rambus has standing to enforce its rights at the ITC.  More specifically, the Commission determined that although ownership of the Dally patents vested with the University of North Carolina (“UNC”), rather than the Massachusetts Institute of Technology (“MIT”) whom Rambus acquired its rights from, Rambus had standing as a bona fide purchaser under 35 U.S.C. § 261.  In pertinent part, § 261 provides that an “assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.”  Because UNC never recorded its subcontract with MIT that gave UNC ownership rights under the Dally patents, and because Rambus lacked actual or inquiry notice of the MIT-UNC sublicense, the Commission found that § 261 operated to give Rambus sufficient title to the Dally patents and, thus, standing to sue.

Lastly, without extensive analysis, the Commission affirmed the ALJ’s findings regarding patent exhaustion, importation, and certain challenges to the ALJ’s evidentiary determinations.