MaxPower Semiconductor, Inc. v. Rohm Semiconductor USA, LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MAXPOWER SEMICONDUCTOR, INC., Case No. 21-cv-07153-VC

Plaintiff,

ORDER GRANTING PETITION TO

v. COMPEL ARBITRATION

ROHM SEMICONDUCTOR USA, LLC, Re: Dkt. No. 1

Defendant.

The Technology License Agreement between MaxPower and Rohm delegates the

question of arbitrability to the arbitrator. As a result, this Court dismissed the declaratory

judgment action that Rohm filed against MaxPower in the Northern District of California. See

Rohm Semiconductor USA, LLC v. MaxPower Semiconductor, Inc., 2021 WL 822932 (N.D. Cal.

Feb. 4, 2021). Rohm nonetheless continues to pursue invalidation of MaxPower’s patents before

the Patent Trial and Appeal Board (PTAB). Thus, MaxPower now petitions this Court for an

order requiring Rohm to halt its effort to convince the PTAB to invalidate the patents. For the

reasons discussed in this ruling and at the hearing, the petition is granted. Because it is for the

arbitrator to decide in the first instance whether the patent dispute is subject to arbitration, Rohm

may not seek adjudication of the dispute in any other forum until that decision has been made.

Given the time-sensitive nature of the issue, this ruling assumes that the reader is familiar with

the facts, the case history, and the applicable legal standards.

The Supreme Court has held that “[w]hen parties agree to arbitrate all questions arising

under a contract,” there is no “distinction between judicial and administrative proceedings”—

each infringes upon the parties’ agreement to arbitrate. Preston v. Ferror, 552 U.S. 346, 359

(2008). The command that arbitration agreements “shall be valid, irrevocable, and enforceable”

in contracts involving a patent therefore applies with equal force to administrative adjudications.

35 U.S.C. § 294. Because the parties have delegated the question of arbitrability to the arbitrator,

whether the patent disputes before the PTAB fall within the scope of the arbitration agreement

must be determined by the arbitrator in the first instance.

Rohm argues that it is unnecessary to grant MaxPower’s petition (which it styled a

“petition to compel arbitration”) because the parties are already in arbitration. But the fact that

the parties have already begun to arbitrate does not prevent this Court from granting relief

necessary to effectuate the parties’ arbitration agreement. If Rohm had initiated a lawsuit in state

court as well as this Court, this Court could have ordered a stay of the state court litigation in

furtherance of its ruling compelling the parties to arbitration. See, e.g., Circuit City Stores, Inc. v.

Najd, 294 F.3d 1104, 1106 (9th Cir. 2002) (upholding the district court’s grant of a petition to

compel arbitration and stay of related state court action); Terminix International Co. v. Palmer

Ranch Limited Partnership, 432 F.3d 1327, 1333 (11th Cir. 2005) (reversing the district court’s

denial of a motion to compel arbitration and instructing the district court to stay related state

court proceedings on remand); McGuire, Cornwell & Blakey v. Grider, 765 F. Supp. 1048, 1052

(D. Colo. 1991) (granting a petition to compel arbitration and ordering the stay of related state

court proceedings); CarMax Auto Superstores California LLC v. Hernandez, 94 F. Supp. 3d

1078, 1127–28 (C.D. Cal. 2015) (same). That the proceeding at issue here is before the PTAB,

rather than a state court, makes no difference; an injunction ordering Rohm to stand down in the

non-arbitral forum until the arbitrator determines whether the patent disputes fall within the

scope of the parties’ arbitration agreement is appropriate in either situation.

If the PTAB adjudications go forward, “the advantages of arbitration—speed and

economy—are lost forever.” Finastra USA Corp. v. Zepecki, 2018 WL 1989508, at *5 (N.D. Cal.

Mar. 9, 2018) (quoting Alascom, Inc. v. ITT North Electric Co., 727 F.2d 1419, 1422 (9th Cir.

1984)); see also Preston v. Ferrer, 552 U.S. 346, 357 (2008) (recognizing that the availability of

arbitration only after an agency adjudication “would likely be long delayed, in contravention of

Congress’ intent ‘to move the parties to an arbitrable dispute out of court and into arbitration as

quickly and easily as possible’”) (quoting Moses H. Cone Memorial Hospital v. Mercury

Construction Corp., 460 U.S. 1, 22 (1983)); id. (“A prime objective of an agreement to arbitrate

is to achieve ‘streamlined proceedings and expeditious results.’”) (quoting Mitsubishi Motors

Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 633 (1985)). Thus, MaxPower has

demonstrated irreparable harm. Cf. Dodocase VR, Inc. v. MerchSource, LLC, 2018 WL 1475289,

at *11 (N.D. Cal. Mar. 26, 2018) (recognizing the “hardships [] manifest in the need to defend a

challenged patent on multiple fronts at the same time” in the face of a bargained-for forum-

selection agreement as irreparable harm). The Federal Circuit’s decision denying MaxPower

relief in In re MaxPower Semiconductor, Inc. does not suggest otherwise. 13 F.4th 1348 (Fed.

Cir. 2021). There, the court’s recognition that no rights would be “irretrievably lost in the

absence of an immediate appeal” was in the context of a request for review under the collateral

order doctrine—a distinct standard from the irreparable harm finding necessary to warrant

injunctive relief. Id. at 1351 (quoting Apple Inc. v. Samsung Electronics Co., 727 F.3d 1214,

1220 (Fed. Cir. 2013)). Similarly, the court’s denial of MaxPower’s mandamus petition was

based upon the court’s finding that MaxPower had not demonstrated that the PTAB had “clearly

and indisputably exceeded its authority”—not to mention the fact that an alternative remedy was

available for MaxPower (namely, an action in this Court). Id. at 1352 & n.1. Additionally, the

public interest is served by the enforcement of valid arbitration agreements. See Macquaries

Holdings USA v. Rode, 2012 WL 12882417, at *4 (C.D. Cal. Jan. 17, 2012); Del Rio v.

Creditanswers, LLC, 2010 WL 3418430, at *5 (S.D. Cal. Aug. 26, 2010). Therefore, injunctive

relief is warranted.

To be clear, this Court is not enjoining the PTAB from doing anything; it is ordering

Rohm to seek a stay or dismissal of the PTAB proceedings while arbitration is pending. It may

well be that a federal district court has the authority to directly enjoin the PTAB from

adjudicating the validity of a patent in a circumstance like this, just as it has authority to enjoin

state court proceedings in furtherance of an order compelling arbitration. But there is no need to

explore that question now. MaxPower has clarified that it merely seeks an order curtailing

Rohm’s own conduct to ensure that Rohm honors the terms of its arbitration agreement. Rohm is

therefore ordered to withdraw its two recently filed IPR petitions (IPR2021-01524 and IPR2021-

1525) within 7 days. Also within 7 days, Rohm is ordered to join with MaxPower in filing a

motion with the PTAB seeking a stay or dismissal of the four IPR proceedings instituted on April

15, 2021 (PR2020-01674, IPR2020-01675, IPR2020-01676, and IPR 2020-01677). The motion

shall request a stay in a first instance but shall indicate that, in the event the PTAB is not inclined

to grant a stay, the parties request dismissal. In the event the arbitrator determines that the patent

disputes between MaxPower and Rohm are not subject to arbitration, Rohm may resume its

effort to seek invalidation of MaxPower’s patents.

IT IS SO ORDERED.

Dated: October 29, 2021 Koo.

VINCE CHHABRIA

United States District Judge