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HUGHES AIRCRAFT CO. v. NATIONAL SEMICONDUCTOR CORP

March 24, 1994

HUGHES AIRCRAFT COMPANY, Plaintiff,
v.
NATIONAL SEMICONDUCTOR CORPORATION, Defendant.


Williams


The opinion of the court was delivered by: SPENCER WILLIAMS

BACKGROUND

 This action involves three patents: (1) No. 3,472,712, entitled "Field-Effect Device with Insulated Gate" (hereafter "the '712 patent"), originally issued to Robert W. Bower (hereafter "Bower") on October 14, 1969; (2) No. 3,507,709, entitled "Method of Irradiating Dielectric-Coated Semiconductor Bodies with Low Energy Electrons" (hereafter "the '709 patent"), originally issued to Bower on April 21, 1970; and (3) No. 3,615,934, entitled "Insulated Gate Field Effect Device Having Source and Drain Regions Formed in Part by Ion Implantation and Method of Making Same" (hereafter "the '934 patent"), originally issued to Bower on October 26, 1971. These patents, collectively referred to as "the Bower patents," relate to certain technology used in the semiconductor industry.

 At some point prior to 1980, the Bower patents were allegedly transferred to Plaintiff Hughes Aircraft Company (hereafter "Hughes"). In 1980, Hughes began contacting a number of companies, one of which was Defendant National Semiconductor Corporation (hereafter "NSC"), to request that they pay royalties for the use of the Bower patents, and to inform them that if they did not pay, it would sue to enforce its rights. NSC and at least one other company, Intel Corporation, refused to pay royalties. Hughes sued Intel in 1983 to enforce its patents. In 1988, while its case against Intel was still pending, Hughes entered into a tolling agreement with NSC which provided in pertinent part that

 
The statutory period of recovery under 35 U.S.C. § 286 *fn1" is hereby tolled as of September 1, 1988 with respect to [the Bower patents] such that in any subsequent lawsuit by HUGHES AIRCRAFT COMPANY against NATIONAL SEMICONDUCTOR CORPORATION alleging infringement of [the Bower patents], NATIONAL SEMICONDUCTOR CORPORATION shall not assert 35 U.S.C. § 286 as a defense for any infringement of said patents occurring subsequent to September 1, 1982.

 On May 29, 1992, NSC executed a tolling agreement extension, which provided in pertinent part that

 
HUGHES and NATIONAL desire to promptly enter into and pursue negotiations toward settlement of HUGHES' claim against NATIONAL for infringement of the [Bower] patents without the need for HUGHES to file an infringement lawsuit against NATIONAL and for NATIONAL to defend such suit[.]

 * * *

 
WHEREAS [in the 1988 Tolling Agreement], NATIONAL agreed [that it] would not assert 35 U.S.C. 286 as a defense to damages for any infringement of said patents occurring subsequent to September 1, 1982 . . . . The tolling period under 35 U.S.C. 286 in the aforesaid Tolling Agreement between NATIONAL and HUGHES is hereby extended until December 1, 1992 with respect to damages under 35 U.S.C. 286 such that the tolled period runs from September 1, 1982 to December 1, 1986.

 On December 2, 1992, Hughes filed the above-captioned patent infringement suit against NSC in the Northern District of Illinois. Pursuant to a stipulation between the parties, the action was transferred to the Northern District of California on March 4, 1993, in accordance with 28 U.S.C. § 1404(a).

 On December 28, 1993, NSC filed a motion to dismiss Hughes' claim for infringement of the '712 patent pursuant to Fed. R. Civ. P. 12(b)(1) (lack of subject matter jurisdiction). NSC's theory is that (1) the six-year statute of limitations governing Hughes' action for damages, 35 U.S.C. § 286, is not a statute of limitations in the usual sense, but rather a limitation on a federally created right; (2) as such, it defines the federal courts' jurisdiction under the Patent Act and cannot be altered or extended by tolling agreements; and, therefore, (3) this Court lacks subject matter jurisdiction over Hughes' claim for infringement of the '712 patent, since it expired more than six years before Hughes filed this action, and hence could not have been infringed during the jurisdictional period. *fn2" In the alternative, NSC seeks partial summary judgment regarding Hughes' claim for infringement of the '712 patent. On March 9, 1994, Hughes filed a cross-motion for partial summary judgment on the issue of whether this Court has jurisdiction to hear its claims for infringement occurring before December 2, 1986 and after September 1, 1982, on the theory that the tolling agreements extended the applicable limitations period. The hearing on these motions was held on March 23, 1994.

 DISCUSSION

 A. NSC's Motion to Dismiss

 The central issue presented by NSC's motion to dismiss is whether 35 U.S.C. § 286 is a jurisdictional statute, which may not be extended by the parties through tolling agreements, or whether it is merely an ordinary statute of limitations, which may be tolled. The Supreme Court has stated that "the basic question to be answered in determining whether, under a given set of facts, a statute of limitations is to be tolled, is one 'of legislative intent whether the right shall be enforceable . . . after the prescribed time." Burnett v. New York Central R. Co., 380 U.S. 424, 426, 13 L. Ed. 2d 941, 85 S. Ct. 1050 (1960) (quoting Midstate Horticultural Co. v. Pennsylvania R. Co., 320 U.S. 356, 360, 88 L. Ed. 96, 64 S. Ct. 128 (1943)). In making this determination, the courts "must ...


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