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Freescale Semiconductor v. Chipmos Technologies

March 30, 2012

FREESCALE SEMICONDUCTOR,
PLAINTIFF,
v.
CHIPMOS TECHNOLOGIES, DEFENDANT.



The opinion of the court was delivered by: Jeremy Fogel United States District Judge

**E-Filed 3/30/3012**

ORDER*fn1 GRANTING IN PART CHIPMOS'S MOTION FOR RECONSIDERATION [re: dkt. entry 161]

Defendant/Counterclaimant ChipMOS Technology, Inc. ("ChipMOS") seeks reconsideration of orders issued by the Court on August 3, 2010 and September 8, 2011. Plaintiff/Counterdefendant

Freescale Semiconductor, Inc. ("Freescale") opposes the motion. The Court has considered the 22 parties' submissions and the record as a whole. For the reasons discussed below, the motion will be 23 denied with respect to the August 2010 Order and granted in part with respect to the September 24 2011 Order.*fn2

ChipMOS and Freescale's predecessor-in-interest, Motorola, Inc. ("Motorola"). The Agreement 4 provides that each party is immune from suit for infringement of the other's patents relating to ball 5 grid array ("BGA") package technology. The Agreement requires ChipMOS to make royalty 6 payments with respect to certain BGA packages that it makes and ships during a calendar quarter. 7

Motorola assigned its rights and obligations under the Agreement to Freescale. In March 2006, an 8 independent audit led Freescale to believe that ChipMOS owed royalty payments under the 9

I. BACKGROUND

The orders in question interpret an Immunity Agreement ("the Agreement") entered into by Agreement. Freescale notified ChipMOS that it considered failure to pay to be a material breach of 10 the Agreement, but ChipMOS did not make payment. Freescale terminated the Agreement and filed suit in the Santa Clara Superior Court asserting a claim for breach of contract. On August 12, 2009, ChipMOS removed the action to this Court on the basis of diversity of citizenship, and it also filed counterclaims for breach of contract and for a judicial declaration that certain of Freescale's patents 14 are invalid and not infringed by ChipMOS's products.

On April 22, 2010, this Court issued an order stating that "the Court will stay patent related discovery pending judicial interpretation of the Agreement, which cannot occur until the record is 17 more fully developed." Dkt. Entry 34, April 22, 2010 Order at 4. On May 3, 2010, Freescale filed a 18 motion for summary judgment as to the parties' competing claims for breach of the Agreement and 19 as to ChipMOS's defense of patent misuse. See Dkt. Entry 38. In response, ChipMOS filed both 20 substantive opposition and a request for a continuance pursuant to Rule 56(f) of the Federal Rules of 21

Civil Procedure.*fn3 See Dkt. Entry 51. ChipMOS noted that virtually no discovery had been 22 completed at that time, and it identified several outstanding discovery requests that it had 23 propounded to Freescale. See Dkt. Entry 51-2, Mot. for Cont. at 2-5. ChipMOS also identified 24 eight individuals whom it would seek to depose regarding issues relating to the alleged total-sales 25 royalty provision of the Agreement. Id. at 6. 26

Freescale's alleged patent misuse and related issues and denying the motion as to interpretation of 3 the Agreement. In the same order, the Court granted partial summary judgment in favor of Agreement provides for a "total-sales royalty," i.e., a royalty based on the total sales of ChipMOS's ChipMOS's products come within the scope of the Agreement; ChipMOS failed to make royalty 8 payments; and thus ChipMOS cannot establish its own performance under the Agreement, a 9 necessary element of its contract claim. The August 2010 Order left unresolved the validity of the defenses to Freescale's claim for breach of contract.

The parties subsequently filed cross-motions for summary judgment as to the remaining issues, including Freescale's claim for breach of contract and ChipMOS's contract defenses. See

On August 3, 2010,*fn4 the Court issued an order granting ChipMOS's Rule 56(f) motion as to Freescale with respect to ChipMOS's counterclaim for breach of contract, concluding that: the BGA packages, irrespective of whether the specific BGA packages are covered by any patent;

Agreement in light of ChipMOS's counterclaim of patent misuse, as well as certain of ChipMOS's Dkt. Entries 82, 100. On September 8, 2011, the Court issued an order concluding that ChipMOS 15 had failed to demonstrate the existence of a triable issue of material fact as to any of its contract 16 defenses and granting summary judgment for Freescale on its claim for breach of the Agreement. 17

ChipMOS seeks reconsideration of both the August 2010 Order and the September 2011

See Dkt. Entry 146. 18

Order.

22 of a judgment adjudicating all the claims and all the parties' rights and liabilities." Fed. R. Civ. P. 23

54(b). "Reconsideration is appropriate if the district court (1) is presented with newly discovered 24 evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an 25 intervening change in controlling law." School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 26

II. LEGAL STANDARD

Interlocutory orders such as those at issue here "may be revised at any time before the entry F.3d 1255, 1263 (9th Cir. 1993).

4 motion for summary judgment based upon an asserted need to take discovery regarding the proper 5 interpretation of the Agreement. Specifically, ChipMOS claimed that it needed to seek additional 6 evidence as to whether the Agreement contained a total-sales royalty provision. The Court 7 concluded that such discovery was unnecessary because the Agreement was unambiguous on its 8 ...


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