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BROOKTREE CORP. v. ADVANCED MICRO DEVICES

December 10, 1990

BROOKTREE CORPORATION, Plaintiff,
v.
ADVANCED MICRO DEVICES, INC., Defendant


William B. Enright, United States District Judge.


The opinion of the court was delivered by: ENRIGHT

WILLIAM B. ENRIGHT, UNITED STATES DISTRICT JUDGE

 INTRODUCTION

 Brooktree is a California corporation in the business of designing, manufacturing, and selling semiconductor chip products used in computer graphic displays. AMD is a competitor and is one of the five largest manufacturers of chip products in the United States, with sales almost 30 times that of Brooktree.

 This action was originally brought for infringement of mask works by Brooktree Corporation (Brooktree) against Advanced Micro Devices, Inc. (AMD). A bifurcated jury trial began on August 7, 1990, and ended on October 1, 1990. The jury found AMD liable on all but one of the patent claims, on all of the mask work claims, and found that AMD's infringement of Brooktree's patents had been willful. The jury awarded damages of over $ 25 million. AMD now brings this motion for Judgment Notwithstanding the Verdict ("JNOV") or, in the alternative, for a new trial. Concurrently, Brooktree brings motions for enhanced damages, attorney's fees and prejudgment interest.

 AMD moves for a JNOV based upon ten main grounds:

 1) With respect to the Mask Work claim, that a) no reasonable jury could have found that AMD did not prove its reverse engineering defense, and b) that no reasonable jury could have found that Brooktree proved Mask Work infringement.

 2) That the '189 Patent is invalid a) due to Brooktree's addition of new matter after the patent's filing date; b) because Brooktree failed to disclose the best mode of practicing the invention in its patent filing; and c) because the patent was invalid as obvious.

 3) That claims 5-7, 11 and 40 of the '189 Patent are not infringed.

 4) That all claims of the '282 Patent are invalid as anticipated by an earlier patent or, in the alternative, are invalid as obvious in view of this earlier patent.

 6) That Claims 8-19 of Patent No. 4,831,282 are not infringed.

 7) That all of the evidence proves that AMD did not infringe any claim of the '688 Patent as properly interpreted.

 8) That AMD is entitled to a judgment that claims 11-18 of the '688 patent are not infringed because Brooktree failed to introduce any evidence of infringement.

 9) With regard to the finding of willfulness, there was not clear and convincing evidence that AMD's infringement was willful.

 10) With regards to the jury award for lost profits, that Brooktree did not prove the absence of non-infringing substitutes.

 AMD also argues in the alternative that a new trial should be granted, based upon the following eight grounds:

 1) That as a matter of law the jury awarded excessive lost profits damages because the award included damages not caused by AMD's infringement.

 2) That this court gave erroneous jury instructions concerning the Chip Protection Act and the definition of "willful patent infringement."

 3) That this court improperly struck the declaration of one of AMD's experts.

 4) That this court erred in prohibiting AMD from introducing surrebuttal testimony concerning the invalidity of the '282 Patent.

 5) That this court refused to admit "the Donnelly reference" concerning the validity of the '189 Patent.

 6) That this court erred in prohibiting AMD from introducing surrebuttal testimony concerning the validity of the '282 Patent.

 7) That this court failed to strike certain testimony by Brooktree's damages expert.

 8) Due to misconduct by Brooktree's counsel during closing argument.

 JUDGMENT NOTWITHSTANDING THE VERDICT STANDARD

 When a party moves for JNOV, the trial court must consider all the evidence in a light most favorable to the non-mover, must draw reasonable inferences favorable to the non-mover, must not determine credibility of witnesses, and must not substitute its own choice for that of the jury between conflicting elements in evidence. Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506, 1512, 220 U.S.P.Q. (BNA) 929 (Fed. Cir. 1984), cert. denied, 469 U.S. 871, 83 L. Ed. 2d 150, 105 S. Ct. 220, 224 U.S.P.Q. (BNA) 520 (1984); Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1546, 220 U.S.P.Q. (BNA) 193 (Fed. Cir. 1983). A JNOV is proper only if "the evidence permits only one reasonable conclusion as to the verdict." The motion must be denied if "reasonable minds could differ over the verdict." Sjolund v. Musland, 847 F.2d 1573, 1577 (Fed. Cir. 1988). The court should grant the motion only if it is firmly convinced that reasonable people could not have reached the verdict brought in by the jury. Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893, 221 U.S.P.Q. (BNA) 669 (Fed. Cir. 1984), cert. denied, 469 U.S. 857, 83 L. Ed. 2d 120, 105 S. Ct. 187 (1984).

 ANALYSIS

 1) The Mask Work Claims

 Defendant AMD argues that the jury's mask work verdict is unsupported by any substantial evidence, and that its "condemnation" of AMD's reverse engineering runs counter to the purpose of the Semiconductor Chip Act. The crux of AMD's argument is as follows: 1) where reverse engineering has been shown, the test for determining infringement is whether the mask work is substantially identical to the registered mask work; 2) that given the evidence of AMD's photographic analysis of the BT451, its introduction of a "second source product" that directly competed with Brooktree's device, and its substantial investment in developing this second source product (along with an accompanying paper trail), no reasonable jury could find that AMD did not prove its reverse engineering defense; and 3) that AMD's mask work, given the over fifty (50) differences between the two mask works, was not substantially identical to Brooktree's mask work.

 Brooktree, in answer to AMD's reverse engineering argument, argues first that the Chip Act prohibits more than production of perfect copies of patented mask works, and allows the production of reverse engineered mask works only if the resulting product is an "original." Brooktree also notes that AMD was allowed to present its reverse engineering defense to the jury, that at least two of the elements of that defense -- whether the AMD analysis of Brooktree's mask work was of the type contemplated by the Chip Act and whether the mask works were "original" -- were strongly contested by Brooktree, and that the jury was given AMD's instruction regarding the reverse engineering defense. In Brooktree's view, the jury simply decided that Brooktree's arguments and evidence were stronger, and that AMD failed in its attempt to prove its reverse engineering defense.

 AMD has not made out a case for the granting of a JNOV on these grounds. Whether the defense consists of two or four elements, at least two of these elements were contested with credible evidence by Brooktree. In addition, the jury was given the AMD's instruction as to the elements of that defense. Given this state of affairs, with credible evidence presented on both sides, a reasonable jury could have found that AMD did not prove its reverse engineering defense. Given that, it is not necessary to reach AMD's further argument as to the test for infringement once a finding of "reverse engineering" has been made.

 2) The '189, '282, No. 4,831,282 and '688 Patents

 AMD next makes myriad arguments as to the validity and infringement of several of the Brooktree patents. Specifically, AMD argues that: 1) the '189 and '282 patents are invalid; 2) claims 5-7, 11 and 40 of the '189 patent are not infringed; 3) claims 8-19 of the No. 4,831,282 patent are not infringed; and 4) that the '688 patent, properly interpreted, is not infringed by the AMD product.

 These points need not be addressed individually. Both parties presented credible evidence to support their positions. The jury determined that the evidence weighed in Brooktree's favor. This court cannot say that AMD's evidence was so persuasive that no reasonable jury could have made such a determination. Accordingly, AMD's motion for a JNOV based on these grounds is also be denied.

 In addition, Brooktree is correct in its assertion that, as to the '189 patents, AMD is barred from raising its alleged noninfringement of any claims of the '189 patent because it failed to raise these issues in its motion for a directed verdict. See Kinzenbaw v. Deere & Co., 741 F.2d 383, 387, 222 U.S.P.Q. (BNA) 929 (Fed. Cir. 1984), cert. denied 470 U.S. 1004, 84 L. Ed. 2d 379, 105 S. Ct. 1357 (1985) ("If a party fails to specify an issue in ...


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