Partial Win for VLSI Against Intel as CAFC Reverses PTAB on One Claim of Integrated Circuit Patent

In a precedential opinion issued yesterday, the U.S. Court of Appeals for the Federal Circuit (CAFC) ruled partially in favor of VLSI Technology, Inc. in its case with Intel, reversing the Patent Trial and Appeal Board’s (PTAB’s) holding that one claim of U.S. Patent No. 7,247,552 was unpatentable. The court upheld the PTAB’s unpatentability findings on the three other challenged claims.

Intel filed three separate inter partes review (IPR) petitions against VLSI challenging the validity of claims 1, 2, 11, and 20 of the ‘552 patent, which is directed to “’[a] technique for alleviating the problems of defects caused by stress applied to bond pads’ of an integrated circuit.” The Board ultimately invalidated all of the claims and VLSI appealed to the Federal Circuit, arguing  chiefly that “the Board erred in its treatment of the ‘force region’ limitation of claims 1, 2, and 11” and “that the Board erred in construing the phrase ‘used for electrical interconnection’ in claim 20 to encompass a metallic structure that is not connected to active circuitry.”

PTAB Need Not Prioritize District Court’s Construction

As to the “force region” limitation, VLSI argued that the PTAB erred by failing to give appropriate weight to the U.S. District Court for the District of Delaware’s claim construction, which was proposed by Intel and adopted by the district court after the IPRs had been filed. VLSI argued that U.S. Patent and Trademark Office (USPTO) procedures require the Board to “‘consider’ prior claim construction determinations by a district court and give such prior constructions appropriate weight.” The CAFC rejected VLSI’s reasoning because it said it was clear from the briefing that the PTAB was “well aware” of the district court’s claim construction and also did not reject it. It simply did not adopt Intel’s construction because it was clear that would not resolve the core disagreement between the parties, “which turned on whether the term ‘force region,’ as used in the ’552 patent, was limited to flip chip bonding or covered wire bonding as well.” The real dispute was not addressed by the district court, and thus the PTAB needed to “go beyond” the district court’s claim construction. The CAFC explained: “Therefore, even if it might have been useful for the Board to begin by expressly acknowledging the district court’s claim construction, the Board was not required to do so, and any failure to do so was at most harmless error.” For that reason, and because the CAFC found no error in the PTAB’s claim construction of “force region” on the merits, the court affirmed the PTAB’s holding of unpatentability as to claims 1, 2 and 11.

Reversal Due to Improper Claim Construction

Regarding the phrase “used for electrical interconnection not directly connected to the bond pad,” however, the CAFC agreed with VLSI that the PTAB’s construction was too broad. The PTAB construed this phrase to include interconnect layers that are “‘electrically connected to each other but not electrically connected to the bond pad’ or to any other active circuitry.” VLSI said the phrase should have been construed “to require that the interconnect layers be connected to active circuitry or have the capability to carry electricity.” The CAFC agreed with VLSI’s construction, noting that the claims’ use of the phrase “being used for” implies a requirement to use the metal interconnect layers to carry electricity and that the recitation of the term “dummy metal lines” in claim 20 “implies that the claimed ‘metal-containing interconnect layers’ are capable of carrying electricity; otherwise, there would be no distinction between the dummy metal lines and the rest of the interconnect layer.”

The court rejected Intel’s arguments in support of the Board’s construction, including that VLSI’s expert admitted that two interconnect layers can be “electrically connected” even if connected only to each other and even if they don’t carry electricity, explaining again that the claim’s use of the phrase “being used for electrical interconnection” rather than “electrically connected,” implies the ability to carry electricity. The CAFC thus reversed the PTAB’s construction of that phrase and remanded for reconsideration of the patentability determination and Intel’s obviousness arguments  in light of the new construction.

In a separate case between the two parties yesterday, Intel was instructed to pay VLSI $949 million by a Texas jury.