VLSI TECHNOLOGY LLC v. INTEL CORPORATION

Authored by: Jeremy J. Gustrowsky

VLSI Technology LLC sued Intel Corporation for infringement of U.S. Patent No. 8,566,836, which covers methods and systems for selecting the best-performing core in a multicore processor to handle tasks that can only run on a single core. After the district court granted Intel summary judgment of noninfringement on two independent grounds, VLSI appealed to the Federal Circuit. The appellate court reversed in large part, finding the lower court made legal errors on both the extraterritoriality and claim construction issues.

A central issue in the case was a pretrial stipulation the parties had entered early in the litigation. That agreement stated that 70% of Intel’s global products and activities would be “deemed to have a United States nexus as required by each subsection of 35 U.S.C. § 271” for infringement and damages purposes, with the technical requirements evaluated “without regard to geographic considerations.” Intel argued this was merely an accounting shortcut for calculating damages, not a concession about where infringement occurred. The Federal Circuit disagreed, holding the plain language of the stipulation clearly addressed the U.S. nexus requirement for infringement under Section 271. The court declined to rescue Intel from what it called a freely entered agreement that may have proven “imprudently made.”

On the apparatus claims, the district court had separately found that VLSI could not prove infringement because the accused products’ measurement functions were performed overseas using external testing equipment. The Federal Circuit reversed on this point as well, noting that the relevant question for apparatus claims is whether the accused product itself contains the structural means for performing the claimed function, not whether Intel actually performed the function in the United States. VLSI presented evidence that Intel’s processors contained dedicated, built-in circuitry for measuring performance parameters, creating a genuine factual dispute that precluded summary judgment.

The Federal Circuit also reversed the district court’s claim construction of apparatus claim 10. The lower court had used prosecution disclaimer to import an “upon identifying” limitation into claim 10, even though that language only appeared in other independent claims. The Federal Circuit examined three statements the patent applicants made during prosecution and found none amounted to a “clear and unmistakable” disclaimer. Because the applicants’ statements were ambiguous and could reasonably be interpreted without narrowing claim 10, prosecution disclaimer did not apply. This error had been the basis for rejecting VLSI’s doctrine of equivalents theory, so the Federal Circuit reversed summary judgment on that ground too.

The one area where Intel prevailed was on damages. The district court had struck certain theories from VLSI’s damages expert for failing to comply with the court’s local patent rules requiring adequate disclosure of damages theories and supporting data. The Federal Circuit found no abuse of discretion, noting that VLSI’s contentions relied on vague citations buried in lengthy string citations and failed to disclose readily available figures. However, VLSI retained the ability to pursue damages through a separate expert whose theories were not struck. The case was remanded for further proceedings.