United States District Court, C.D. California
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
INFINEON TECHNOLOGIES AG
Present: The Honorable CHRISTINA A. SNYDER Judge.
[REDACTED] CIVIL MINUTES - GENERAL
(IN CHAMBERS) - [REDACTED] MACOM'S MOTION FOR CIVIL
CONTEMPT AND SANCTIONS FOR INFINEON AMERICAS' VIOLATION
OF PRELIMINARY INJUNCTION (Filed July 24, 2017, dkt.
April 26, 2016, plaintiffs MACOM Technology Solutions
Holdings, Inc. (“MACOM”), and Nitronex, LLC filed
the instant action against defendants Infineon Technologies
AG (“Infineon AG”) and Infineon Technologies
Americas Corp. (“Infineon Americas”). Dkt. 1. The
gravamen of plaintiffs' complaint is that defendants
breached an intellectual property (“IP”) purchase
agreement and license agreement entered into in 2010 by
Nitronex (the predecessor-in-interest to MACOM) and
International Rectifier Corporation (“IR”) (the
predecessor-in-interest to Infineon Americas).
October 31, 2016, the Court granted plaintiffs' request
for a preliminary injunction against Infineon Americas. Dkt.
140. The Court entered the preliminary injunction on December
7, 2016. Dkt. 177. On January 3, 2017, Infineon Americas
appealed this Court's order granting plaintiffs'
motion for a preliminary injunction to the Federal Circuit
Court of Appeals. Dkt. 193. On January 5, 2017, Infineon
Americas filed a motion to stay pending appeal or modify a
portion of the Court's preliminary injunction. Dkt. 200.
On March 6, 2017, the Court denied the stay request but
granted Infineon Americas' motion to modify the
preliminary injunction. Dkt. 277.
March 17, 2017, the Court granted plaintiffs' motion for
leave to take expedited discovery concerning potential
preliminary injunction violations by Infineon Americas. Dkt.
284. On August 7, 2017, plaintiffs' filed the instant
motion for civil contempt and sanctions. Dkt. 363
(“Mot.”). On August 11, 2017, Infineon Americas
filed its opposition, dkt. 369 (“Opp'n”), and
plaintiffs filed a reply on August 17, 2017, dkt. 376
(“Reply”). With the Court's permission,
Infineon Americas filed a surreply on August 21, 2017, dkt.
377, and plaintiffs filed a rebuttal on August 22, 2017, dkt.
379. The Court held a hearing on August 28, 2017. Having
carefully considered the parties' arguments, the Court
finds and concludes as follows.
Court and parties are familiar with the facts alleged by
plaintiffs and the procedural history of this case.
Nonetheless, the Court will summarize plaintiffs'
allegations in the operative second amended complaint
(“SAC”) and review the preliminary injunction
orders before addressing the instant motion.
The Allegations in the SAC
Corporation (the predecessor-in-interest to MACOM) developed
a semiconductor (material that conducts electrical current
only under certain conditions) using gallium nitride
(“GaN”) to form the epitaxial layer of the
semiconductor and silicon (“Si”) to form the
substrate (or wafer) for the semiconductor
(“GaN-on-Si” or “GaN/Si”). Dkt. 170
(“SAC”) ¶¶ 1, 40-41, 52-53. Nitronex
used GaN-on-Si semiconductors to develop radio frequency
(“RF”) devices for use in mobile communications.
Id. ¶¶ 54-59. Nitronex obtained more than
35 U.S. patents based on its work with gallium nitride.
Id. ¶ 63.
2010, Nitronex and IR (the predecessor-in-interest to
Infineon Americas) entered into an IP purchase agreement and
license agreement. Id. ¶ 78; dkt. 170-1
(“IP Purchase Agreement”). The IP Purchase
Agreement assigns to IR 54 U.S. and international patents and
applications and the right to file related applications and
requires Nitronex and IR to work together to enforce the
Nitronex Patents. SAC ¶¶ 79-83. The 2010 license
agreement provides Nitronex a license to the Nitronex
Patents, and a sole right to sublicense them. Id.
¶ 88; dkt. 170-2 (“License Agreement”). The
License Agreement permits only Nitronex and IR to
practice in certain parts of the “Field of Use”
for GaN-on-Si RF devices. SAC ¶ 88; License Agreement.
The License Agreement also provides Nitronex with the
exclusive right to practice the Nitronex Patents, including
as against IR, within Nitronex's “Exclusive
Field.” SAC ¶ 89; License Agreement.
Nitronex's Exclusive Field includes most RF applications
in the Field of Use, except those that operate solely below
100MHz in frequency, including cellular telephone base
stations. SAC ¶¶ 89-90; License Agreement. The
License Agreement prohibits either party to the agreement
from assigning, selling, or otherwise transferring an
interest or obligation under the License Agreement without
the consent of the other party. Any assignment in violation
of that provision is void. License Agreement § 12.12.
License Agreement also includes a negative covenant with
respect to IR: “IR itself may not directly or
indirectly market, sell or service Products in the Exclusive
Field and IR may not grant further licenses or sublicenses to
any other party under the Licensed Patents to design,
develop, make, have made, use, market, sell or service
Products in the Field of Use.” License Agreement §
2.1; SAC ¶ 91. The License Agreement does not include a
negative covenant in which Nitronex promises to refrain from
practicing the Nitronex Patents outside its fields of use.
SAC ¶ 92. Nitronex and IR may terminate the License
Agreement only for a material breach that is not cured within
30 days of receipt of written notice of such a breach.
Id. ¶ 95; License Agreement § 7.1.
2012, Nitronex was acquired by GaAs Labs, converted into a
limited liability company and renamed Nitronex LLC. SAC
¶ 99. On February 13, 2014, MACOM announced the purchase
of Nitronex, LLC from GaAs Labs and Nitronex LLC became a
wholly-owned subsidiary of MACOM. Id. ¶ 101.
MACOM had been selling gallium nitride-on-silicon carbide
(“GaN-on-SiC”) products since 2011, before its
acquisition of Nitronex. Id. ¶ 126. On January
13, 2015, Infineon AG acquired IR. Id. ¶ 109.
IR changed its name to Infineon Technologies Americas Corp.
Id. ¶ 17. Infineon Americas is a wholly owned
subsidiary of Infineon AG. Id.
allege that after Infineon AG acquired IR, Infineon AG
attempted to disrupt or renegotiate the Nitronex-IR
agreements. Id. ¶ 113. During telephone calls
between the parties, plaintiffs allege that Infineon
representatives stated that Infineon believed MACOM was
infringing on unidentified Nitronex Patents by selling
GaN-onSiC devices. Id. ¶ 124. In a February 2,
2016 letter to MACOM, Infineon complained of MACOM's
GaN-on-SiC sales and asserted that such sales were a material
breach of the License Agreement that would allow Infineon to
terminate that agreement. Id. ¶ 143. In a
letter dated March 22, 2016, Infineon purportedly terminated
the License Agreement. Id. ¶ 147. Soon
thereafter, plaintiffs initiated this action. Plaintiffs
allege that Infineon's purported termination was without
cause, done in bad faith, and pretextual. Id. ¶
148. Plaintiffs further allege that Infineon has been
promoting and/or marketing GaN-on-Si RF products for use in
cellular base station applications-activities that are within
MACOM's Exclusive Field-in violation of the License
Agreement. Id. ¶ 163-64.