UniRAM Defends Patent, Gets $30.5 Million For Stolen Trade Secrets

Posted on | August 26, 2008 | 4 Comments

2008-1494 UniRAM Technology v. Taiwan Semiconductor
ND/CA 04-cv-1268
Judge Vaughn Walker

Taiwan Semiconductor Manufacturing Co. (TSMC) appeals from the orders and judgment of Judge Vaughn Walker affirming the jury’s $30+ million verdict that it stole trade secrets from UniRAM and that certain UniRAM patents are not unenforceable. 

The patent infringement claims by UniRAM were dismissed with prejudice earlier in the case after UniRAM settled with defendant MoSys and included a release that covered TSMC.

Inequitable Conduct

Judge Walker found and concluded that there was no inequitable conduct in prosecution of UniRAM’s 6,108,229 patent (and a continuation) directed to a design for dynamic random access memory (DRAM).  TSCM argued that the patent contained  statements that an actual DRAM chip had been produced when, in fact, the inventor had only a tape-out file and simulation results.  The challenged statements include:

Our results show that a memory of the present invention is faster than an SRAM of the same memory capacity.

and

Although the bit line structure in FIG. 3b is the actual bit line structure used in our product, for simplicity, we will use the simpler two-dimensional bit line structure in FIG. 3a as example in the following discussions.

and

A memory device of the present invention is under production. Using 0.6 micron technology to build a memory array containing one million memory cells, we are able to achieve 4 ns access time, which is more than 10 times faster then existing memories devices of the same storage capacity.

The court found that the audience of the patent is a circuit designer, the subject matter was circuit design, and a person of ordinary skill in the art is a circuit designer–and based on the experts’ testimony, it was clear that circuit designers would understand the accused statements as referring to tape-outs and simulation performance rather than meaning that an actual chip had been manufactured.  In other words, the "product" for chip designers is the design and related IP and not the physical chip itself. 

The court also found that chip designers would recognize that the absence in the patent of any "chip photomicrographs" meant that no actual chip had been fabricated.

With respect to the testimony of the competing experts, the court repeatedly found UniRAM’s expert more compelling and believable.  The court explained why:

17. TSMC’s expert on how one of ordinary skill would interpret certain of Shau’s patent statements, Mr David Taylor, is less qualified than Dr Sechen. Mr Taylor lacks a PhD, is not a fellow in the IEEE and lacks the teaching and research experience of Dr Sechen. Ex 5291.

18. Mr Taylor, unlike Dr Sechen, cited no documents in either his expert report or his trial testimony to corroborate his opinions. Doc #621 152:3-20.

19. Dr Sechen consistently offered opinions that were more specific and complete than the answers given by Mr Taylor. Dr Sechen’s opinions were supported by reference to objective standards in the industry, such as terms of art. Mr Taylor, by contrast, relied more often on his view of common sense and his personal interpretations of disputed phrases. Dr Sechen explained his interpretations of disputed terms in greater detail, usually by a more thorough consideration of the context in which the term appears.

Also, the court considered a few other factors.  One is that the inventor’s native language is Mandarin Chinese and, though his English imperfect, he wrote his own patent application.  The court stated, "using imprecise terms [in a patent application] does not provide clear and convincing evidence of a misstatement." 

Another factor was TSCM’s decision to continue to pursue the inequitable conduct counterclaim even after the court found it clearly deficient at the summary judgment stage and after UniRAM had released and dismissed with prejudice the patent claims.  Indeed, the court found that TSCM’s conduct made the case "exceptional," but declined to award UniRAM its attorney’s fees because it is an "extraordinary sanction, and the Federal Circuit has not developed detailed criteria for such awards in the context of inequitable conduct claims."

Trade Secrets 

Judge Walker denied TSCM’s JMOL on the trade secret verdict without opinion.  The gist of TSCM’s argument was that there was insufficient evidence to show that UniRAM actually communicated trade secrets to TSCM or that TSCM used or communicated those trade secrets to others.  UniRAM had given tape-outs to TSCM for manufacturing, and claimed that TSCM (despite a non-disclosure) had shared those tapeouts with Mosys.  The trial and trade secret case is discussed more fully at the Trade Secret Blog.

More reading:

Findings and Conclusion on Unenforceability
JMOL on Trade Secret Verdict

Counsel:

UniRAM: Susman Godfrey LLP
(Ian B. Crosby, Justin A. Nelson, Max Lalon Tribble, Jr., David Humberto Orozco, John McMakin Neukom, Joseph S. Grinstein, Victoria C. Capitaine) Heim, Payne & Chorush, L.L.P. (Russell A. Chorush, Michael F. Heim) and Robert Morris Tuttle. 
 
 

TSCM: Weil Gotshal & Manges (Matthew Douglas Powers, Brandon D. Conard, Edward Robert Reines, Jason D. Kipnis, Paul Tsutomu Ehrlich).

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