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Freescale Semiconductor, Inc v. Chipmos Technologies

January 24, 2013

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



The opinion of the court was delivered by: Edward J. Davila United States District Court

United States District Court For the Northern District of California

ORDER GRANTING PLAINTIFF'S RENEWED MOTION FOR SUMMARY JUDGMENT; GRANTING PLAINTIFF'S RENEWED MOTION TO STRIKE [Re: Docket No. 183, 186]

The above-entitled suit is a contract and patent dispute between Plaintiff Freescale Semiconductor, Inc. ("Plaintiff" or "Freescale") and Defendant ChipMOS Technologies, Inc. 20 ("Defendant" or "ChipMOS"). Presently before the Court are two motions filed by Plaintiff: 21 Plaintiff's Renewed Motion for Summary Judgment (Docket Item No. 183) and Plaintiff's 22 Renewed Motion to Strike (Docket Item No. 186). Having carefully considered the moving, 23 opposing, and reply papers for both motions as well as the arguments of counsel from the hearing 24 on these matters, the Court grants both motions. 25 26 27 28 4 summary of the undisputed facts of this case: 5

Agreement ["the ChipMOS Agreement"] effective April 1, 1999. [Decl. of Lee Chastain, Docket Item No. 39, Ex. A.] Motorola's rights and obligations under the Agreement were assigned to Freescale on September 1, 2005. [Chastain Decl. Ex. C.] While the construction of key aspects of the Agreement is in dispute, the Agreement effectively cross-licenses patents covering ball grid array ("BGA") package technology between ChipMOS and Freescale [Motorola's assignee to the Agreement], granting immunity from suit under each other's patents relating to BGA packages and enhancements thereto. [Chastain Decl. Ex. A § 1.4 (defining "BGA PACKAGE"), § 1.5 (defining "MOTOROLA PATENTS"), § 1.6 (defining [CHIPMOS] PATENTS), § 3.1 (granting immunity from suit under MOTOROLA PATENTS), and § 3.2 (granting immunity from suit under [CHIPMOS] PATENTS).] The Agreement requires ChipMOS to make royalty payments based on certain BGA packages that it makes and ships during a calendar quarter. [Chastain Decl. Ex. A § 4.] The specifics of these royalty payments are the subject of the instant dispute.

In March 2006, an independent audit led Freescale to believe that ChipMOS owed royalty payments for ChipMOS's FBGA products. [Chastain Decl. Ex. D.] ChipMOS asserts that the Agreement does not require royalty payments for the FBGA products, but Freescale considers the failure to pay such royalties to be a material breach of the Agreement. [Chastain Decl. §16; see also id. Ex. A § 5.2.] Freescale claims that it provided notice to ChipMOS of its belief that there had been a material breach, that ChipMOS did not cure the breach within forty-five days of notice, and that it exercised its right to terminate the Agreement. [Chastain Decl. ¶ 17; see also id. Ex. A § 5.2.] ChipMOS disputes Freescale's right to terminate the Agreement and continues to pay royalties on certain BGA packages into an escrow account.

Freescale Semiconductor, Inc. v. ChipMOS Techns., Inc., No. 09-3689-JF, at 2--3 (N.D. Cal. Aug. 22 Motion for Partial Summary Judgment (Docket Item No. 43); granting in part and denying in part 24 File Supplemental Declaration (Docket Item No. 58)). In addition, relevant to the current motion is 26

I.Background

A.Factual Background

The Court will refer to a previous order by District Court Judge Jeremy Fogel to provide a ChipMOS and Motorola, Inc. ("Motorola") entered into the [Immunity]*fn1 3, 2010) (hereinafter "Aug. 3, 2010 Order") (granting in part and denying in part Freescale's 23 ChipMOS's Motion for a Continuance (Docket Item No. 58); and granting ChipMOS's Motion to 25 the fact that on June 9, 2005, Plaintiff and Micron Technology, Inc. ("Micron") entered into a 2 patent agreement (hereinafter "Micron Agreement") in which Plaintiff agreed to license to Micron 3 certain patent rights. See Decl. of Greg L. Lippetz in Supp. of Pl.'s Renewed Mot. for Summ. J. 4

Ex. 2. 5 6

12, 2009, Defendant removed the action to this Court on the basis that this Court has original 10 jurisdiction under 28 U.S.C § 1332 based on diversity of the citizenship of the parties.*fn2

Counterclaims. See Docket Item No. 5. This pleading contained eleven affirmative defenses; the 13 affirmative defenses relevant to the present motions include the following: mutual mistake, license, 14 and patent exhaustion. Id. ¶¶ 36, 40, 41. Defendant also alleged the following counterclaims: 15 declaratory judgment of non-infringement and invalidity of three of the Motorola patents that were 16 subject to the ChipMOS Agreement; patent misuse; and breach of the ChipMOS Agreement. Id. 17

Answer to Defendant's Counterclaims. See Docket Item No. 40. 19

20 filed by Plaintiff. See Aug. 3, 2010 Order. As a result of this Order several issues were decided as a 21 matter of law. Among these issues, the Court held that the Agreement provides for a total sales 22 royalty. Id. at 10. The Court also granted Plaintiff's motion with regard to Defendant's 23 counterclaim for breach of contract. Id. at 11. 24 25

B.Procedural History

On July 13, 2009, Plaintiff filed a Complaint for Breach of Contract against Defendant in

Santa Clara County Superior Court. See Notice of Removal, Docket Item No. 1, Ex. A. On August 9

United States District Court

For the Northern District of California

On August 19, 2009, Defendant filed an Answer to Complaint with Jury Demand and The Answer also included a demand for a trial by jury. Id. at 17. ...


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