The opinion of the court was delivered by: MARILYN PATEL, District Judge
MEMORANDUM & ORDER Granting in part and denying in part
Defendant's motion for partial summary judgment
On May 9, 1994, plaintiff Linear Technology Corporation ("LTC")
brought this action against defendant Micrel, Inc. alleging
infringement of United States Patent Number 4,755,741 ("'741
Patent") and the accompanying reexamination certificates. Now
before the court is the defendant's motion for partial summary
adjudication as to the issue of the validity of one of the
reexamination certificates and the availability of the defense of
intervening rights. Having considered the arguments presented and
for the reasons stated below, the court enters the following
memorandum and order.
All agree on the following facts: On July 5, 1988 the '741
Patent pertaining to adaptive transistor drive circuitry was
issued including, inter alia, claims 22 and 32, ("Claim 22" and
"Claim 32" respectively), which are asserted in this law suit.
The other asserted claims in this action are claims 36-44, 46, 47
and 49. Jt. Stmt. of Undisputed Facts, No. 24. The '741 Patent
covers an adaptive transistor drive circuit for use in electrical
devices where a transistor is used "as a switch in a switching
voltage regulator." U.S. Pat. No. 4,755,741, col. 1, l. 17. The
claimed inventive improvements in the '741 Patent include the ability of the drive
circuit to operate across a range of collector currents and
temperatures and to operate with higher electrical efficiency
than previous circuits. Id. at col. 2, ll. 43-66.
On May 14, 1991, the B1 Reexamination Certificate for the '741
Patent ("B1 Certificate") issued, following a reexamination of
the '741 Patent ("Reexam I"). The text of the amended claims was
not included in the B1 Certificate, although it is present in the
public record of the reexamination history. In 1994, during the
second reexamination proceeding ("Reexam II"), the Patent and
Trademark Office ("PTO") notified LTC of the printing mistake and
stated that a certificate of correction could be requested. See
Reexam II, Paper No. 9. There is no indication in the record that
LTC ever requested a certificate of correction.
LTC sent a notice of possible infringement referencing the '741
Patent to Micrel on April 3, 1993, and on May 9, 1994 LTC filed
suit against Micrel alleging infringement of the '741 Patent and
the B1 Certificate. Oliver Dec., Exh. 7 and Exh. 8 at 2.
Defendant Micrel requested reexamination of the amended '741
Patent on September 9, 1994 ("Reexam III"). Reexam II and Reexam
III were merged in January 1995, and on December 26, 1995 the B2
Reexamination Certificate ("B2 Certificate") issued.
During Reexam I, the amendments to Claim 32 narrowed the scope
of the amended claim and it is not identical to any original
claim in the '741 Patent. See Jt. Stmt. of Undisputed Facts
Nos. 5, 25. During Reexams II and III, the Patent Office rejected
Claims 22 and 32 on two separate occasions based on prior art; in
response to these rejections, LTC made amendments to the claims.
Id. Nos. 13-15. In the same year that the lawsuit and Reexam
III commenced, Micrel began selling certain accused products
MIC2171, MIC2172, and MIC32172 circuits. See id. No. 42.
Before the December 26, 1995 issue of the B2 Certificate Micrel
had already shipped 279,655 units of those products. See id.
Micrel later changed the design of its devices to eliminate the
circuitry which formed the basis of LTC's infringement
contentions. LTC has conceded that the manufacture and use of the
redesigned devices would not infringe the asserted claims in the
'741 Patent and the reexamination certificates thereto. See Pl's Responses to Micrels' Requests
for Admission Nos. 72-75 (Feb. 18, 2005) in Morrill Dec., Exh. G.
Plaintiff has also conceded that none of the claims 36-44, 46-47
and 49 is "identical" in scope to any earlier claim. Jt. Stmt of
Undisputed Facts Nos 17, 18, 20, 21, 26-39.
The parties are in dispute over whether Claims 22 and 32 have
changed in scope since the B1 Certificate or the '741 Patent. The
parties also differ over the amount that Micrel had in inventory
and the amount that Micrel had spent in "substantial preparation"
of further infringing devices as of December 26, 1995. Defendant
alleges that it had 309,294 of accused products in inventory and
had spent $500,000 in "substantial preparation" as of the date of
the B2 Certificate's issue on December 26, 1995. Plaintiff
contends that Micrel had at most 51,600 units of accused products
in inventory and disputes the amount spent in developing the
This actions was initially assigned to United States District
Court Judge Eugene F. Lynch, LTC's complaint alleges infringement
of the '741 Patent and the associated reexamination certificates.
On February 26, 1997, Judge Lynch denied Micrel's motion for
summary judgment on the question of the validity of the '741
Patent, identifying a genuine issue of material fact regarding
the applicability of the on-sale bar provision of
35 U.S.C. section 102. In the same order, Judge Lynch bifurcated this
action, permitting the on-sale bar issue to proceed to trial
while staying all other issues. Approximately six months later,
the case was reassigned to this court, and the court subsequently
conducted a bench trial on the issue of on-sale bar invalidity.
On August 19, 1999 this court found the '741 Patent invalid under
section 102(b), entering judgment for Micrel accordingly. On
appeal, the Federal Circuit affirmed this court's decision in
part, reversed in part, and remanded. See Linear Tech. Corp.
v. Micrel, Inc., 275 F.3d 1040 (Fed. Cir. 2002), cert denied,
538 U.S. 1052 (2003).
On January 24, 2004 the court conducted a limited claim
construction for the '741 Patent and accompanying certificates,
construing the word "saturation" to mean "the state in which the
ratio of collector-current to base-current is forced lower by excess base
current" and the phrase "in saturation" to mean "the working of
the covered invention consistently at a state of forced current
gain." Memorandum & Order, No. C 94-1633 MHP, slip op. at 12, 17
(Jan. 22, 2004).
Now before the court are the parties' memoranda with respect to
(1) the validity of the B1 Certificate, (2) the availability of
the defense of intervening rights to limit the period within
which infringement damages can be calculated, (3) the amounts in
inventory, (4) the amount of money spent developing the accused
products and (5) the issue of whether Micrel's redesigned
products are non-infringing.
As in any other civil action, summary judgment is proper in a
patent infringement action when the pleadings, discovery, and
affidavits show that there is "no genuine issue as to any
material fact and that the moving party is entitled to judgment
as a matter of law." Fed.R.Civ.P. 56(c). See also
Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1575
(Fed. Cir.), cert. denied, 516 U.S. 987 (1995). Material facts
are those which may affect the outcome of the case. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a
material fact is genuine if there is sufficient evidence for a
reasonable jury to return a verdict in favor of the nonmoving
The party moving for summary judgment bears the burden of
identifying those portions of the pleadings, discovery, and
affidavits that demonstrate the absence of a genuine issue of
material fact. Celotex Corp. v. Cattrett, 477 U.S. 317, 323
(1986). On an issue for which the opposing party will have the
burden of proof at trial, the moving party need only point out
"that there is an absence of evidence to support the nonmoving
party's case." Id. at 325; Crown Operations Int'l, Ltd. v.
Solutia, Inc., 289 F.3d 1367, 1377 (Fed. Cir. 2002). On the
other hand, where the moving party bears the burden of proof on
an issue, it must submit evidence sufficient to establish that no
reasonable jury could find against it on that issue at trial.
See Frank's Casing Crew & Rental Tools, Inc. v. Weatherford
Int'l, Inc., 389 F.3d 1370, 1376 (Fed. Cir. 2004); Gart v.
Logitech, Inc., 254 F.3d 1334, 1339 (Fed. Cir. 2001), cert. denied, 534 U.S. 1114 (2002).
Once the moving party meets its initial burden, the nonmoving
party must go beyond the pleadings and, by its own affidavits or
discovery, "set forth specific facts showing that there is a
genuine issue for trial." Fed.R.Civ.P. 56(e). Mere allegations
or denials do not defeat a moving party's allegations. Id.;
see also Gasaway v. Northwestern Mut. Life Ins. Co.,
26 F.3d 957, 960 (9th Cir. 1994). The court may not make credibility
determinations, Anderson, 477 U.S. at 249, and inferences drawn
from the facts must be viewed in the light most favorable to the
party opposing the motion. Masson v. New Yorker Magazine,
501 U.S. 496, 520 (1991). Nonetheless, even if summary adjudication
of an entire claim is not warranted, Federal Rule of Civil
Procedure 56(d) allows a court to ...