Opposition Brief — Advanced Semiconductor Materials America, Inc. v. Applied Materials, Inc.

No. 96-1483

In The

Supreme Court of the United States

October Term, 1996

*

ADVANCED SEMICONDUCTOR MATERIALS

AMERICA, INC., EPSILON TECHNOLOGY, INC.

d/b/a ASM EPITAXY,

Petitioners,

VS.

APPLIED MATERIALS, INC.,

Respondent.

+

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

+

OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

+

MatrHew D. Powers

Counsel of Record

EDWARD R. REeEINEs

Welt, GotsHaAL & Mances LLP

2882 Sand Hill Road, Suite 280

Menlo Park, CA 94025

(415) 926-6200

Attorneys for Respondent

Applied Materials, Inc.

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED FOR REVIEW

Whether the petition for certiorari should be denied

where: (1) the double patenting defense presented by

petitioner is not of compelling public interest because of

recent “GATT” legislation providing that all patents

deriving from a patent application expire twenty years

from the original filing date, (2) the petitioner waived the

argument on which the petition is based by conceding

below that section 121 can shield a patentee from a dou-

ble patenting claim even if that means the public cannot

use an expired patent, and now reverses itself, and raises

this issue for the first time, and (3) the Federal Circuit's

interpretation of section 121 of the Patent Law challenged

by the petitioner is consistent with this Court’s decisions.

il

PARTIES TO THE PROCEEDING

Pursuant to Supreme Court Rule 29.6, respondent

Applied Materials, Inc. reports that it has no parent com-

panies and no non-wholly owned subsidiaries.

iii

TABLE OF CONTENTS

Page

Pidssmmerues OF TEE CASE... ccc cecerenccvecce 1

REASONS FOR DENYING THE PETITION......... 3

I. Legislation Has Effectively Eliminated ASM’s

Double Patenting Argument ..................

&>

Il. ASM Has Waived Its Double Patenting Argu-

ment By Failing To Raise It Until Now........ 6

III. There Is No Conflict Between This Court’s Pre-

cedent And The Federal Circuit’s Interpretation

SOP IE BURRS SS cu aiks hetsanes ¥o55 a boaG Nae 1()

A. A Patent Grants The Right To Exclude, Not

EWR MN oe Sse neds Soa aa hees i1

B. Section 121 Protects Inventors From The

Unfairness Of Invalidating Patents Because

Cr Patent Ce BOOED 6k occ cccvvecccues 14

1. The Text Of Section 121 Plainly Protects

Inventors From Double Patenting

MGS n aa kc uwsheGh Cound RS PAS OUR KE 14

2. The Courts Have Consistently Held

That Section 121 Protects Inventors

From Double Patenting Claims........ 15

3. The Patent Office Interprets Section 121

To Protect Inventors From Double Pat-

| GR SPerTeevT Tiree je eet bel 16

4. The Legislative History Of Section 121

Establishes That Section 121 Protects

Inventors From Double Patenting

PC kahWakcavere ce ebe eaves eixie cas 17

ln VG one pKa on Koa sas oheh wae Keieelw es 20

iv

TABLE OF AUTHORITIES

Page

FEDERAL CASES

Adickes v. S. H. Kress & Co., 398 U.S. 144 (1970)...... 6

Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489

Jie WR AEE 8 0 AERA Rea te Saas CEE es 13

Bruiotie v. Thys Co., 379 US. 29 (1964) ......... 000%. 13

Ex parte Camarata, 151 U.S.P.Q. 739 (Pat. Off. Bd.

Sy Perro er Sr errr rr ere T Tyrer errs y 16

Cantrell v. Wallick, 117 U.S. 689 (1886)............... 11

Cardinale v. Louisiana, 394 U.S. 437 (1969) ............ 7

Crown Die & Tool Co. v. Nye Tool & Machine Works,

ee. Shi ee Cs 5 0 40 oo kd Reena cewens 11

In re Heinle, 342 F.2d 1001 (C.C.P.A. 1965)........... 12

Kellogg Co. v. National Biscuit Co., 305 U.S. 111

EE i is ok ee EER EAR a eee ae 13

Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423

Creek Soe SO. ss ics ka oa Hee ee a a ee ees 17

Ex parte Nantz, 141 U.S.P.Q. 523 (Pat. Off. Bd. App.

= Rare perpen pn ae py semunied iyisebg tLe Car gs Care nN A EAE 17

Rice v. Sioux City Memorial Park Cemetery, Inc., 349

Rs ae CAE Ks beh ReR Cah ek eb TwE eC NRG bee ae eebes 3

In re Schneller, 397 F.2d 350 (C.C.P.A. 1968) ......... 16

Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249

CRE 3 ski44 4 ose dR a ee 13

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225

CEE s Soek adc akrakwes bas keine abe aaa Lees 13

Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169 (1896) .... 14

Vv

TABLE OF AUTHORITIES - Continued

Page

Studiengesellschaft Khle GmbH v. Northern Petrochemical

Co., 7G 2d Shi Cad. Cir. 1986). ... io. 5 cee cceccs. 15

Symbol Tech., Inc. v. Opticon, Inc., 935 F.2d 1569

es Tae. ORE i irad nes hii aes oS RENE RaEC 10, 15

Temco Elec. Motor Co. v. Apco Mfg. Co., 275 U.S. 319

Bo POPE PELE SE POEL Pye ey er Pee EEN (ene 11

Texas Instruments, Inc. v. United States Int'l Trade

Comm'n, 988 F.2d 1165 (Fed. Cir. 1993)......... 10, 15

Triangle Improvement Council v. Ritchie, 402 U.S. 497

SPT SR cs oki eva eS uae er hd bed COWEN eae ee Lee 4

United States v. F’ohri, 482 U.S. 64 (1987)............ 14

Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical

Co., ___ U.S. __, 117 S.Ct. 1040 (March 3, 1997) ..... 7

In re Zickendraht, 319 F.2d 225 (C.C.P.A. 1963)....... 16

FEDERAL STATUTES

Be Soe ys erg eg Tern LY ae eer ee eRe ees passim

35 U.S.C. § 154 (1988) (amended 1994)............... 4

oe Wa. § ISG aMa) C197) ev ccc cs cdcsceaven S, 2

Pub. L. 103-465 § 534, 108 Stat. 4983 (1994).......... 6

Uruguay Round Agreement Act, Pub. L. No.

193-465, § 532, 108 Stat. 4983 (1994) (current

version at 35 U.S.C. § 154(a)(2) (1997))............. 5

vi

TABLE OF AUTHORITIES — Continued

OTHER AUTHORITIES

H.R. Rep. No. 1923, 82d Cong., 2d Sess. 20 (1952) .... 20

H.R. 3760, 82d Cong., Ist Sess. § 120 (1951)......... 19

H.R. 9133, 81st Cong., 2d Sess. § 120 (1950)......... 19

S. Rep. No. 1979, 82d Cong., 2d Sess (1952)......... 20

U.S. Code Cong. & Ad. News 2394................. 20

Proceedings, Mid-Year Meeting, Section of Patent,

Trademark, and Copyright Law, American Bar Asso-

ciation, held March 8-10, 1951, Shoreham Hotel,

Pe ees PO Bb accuser dd ce Padweh Orbos kéieewetess 19

STATEMENT OF THE CASE

Respondent Applied Materials, Inc. (“Applied Mate-

rials”) filed for the patent at issue in this case, U.S. Patent

No. 4,496,609 (“the ’609 Patent”), in 1969 and the patent

did not issue until 1985. This sixteen year delay resulted

from (1) the Patent And Trademark Office’s (“Patent

Office’s”) decision to require Applied Materials to sepa-

rate its original ‘609 Patent application into three differ-

ent applications (known as a restriction requirement), and

(2) the Patent Office’s persistent refusal for many years to

issue the ‘609 Patent claims based on prior art rejections

even though it is beyond dispute that the ‘609 Patent is

patentable over the prior art.!

After the ‘609 Patent issued in 1985, Applied Mate-

rials brought this case against petitioners (collectively

referred to herein as “ASM”). ASM asserted many

defenses, including a “double patenting” claim. However,

the double patenting defense ASM unsuccessfully pur-

sued below is very different from the argument ASM now

attempts to make to this Court.

Contrary to the position taken in ASM’s Petition,

throughout this litigation ASM admitted that under cer-

tain circumstances, section 121 of Title 35 shields inven-

tors from double patenting allegations based on a prior

patent resulting from the same original application.

* Both the Federal Circuit and the District Court rejected

ASM’‘s prior art defenses. See ASM’s Petition For Writ Of

Certiorari (“ASM’s Petition”), Appendix C at C27-43

(concluding that the ’609 Patent is not invalid over the prior art);

id. at Appendix A at A11-15 (affirming District Court's

conclusion that the ‘609 Patent is not invalid).

Specifically, ASM admitted that section 121 shields inven-

tors who have been forced by the Patent Office through a

restriction requirement - without right of appeal — to

pursue in separate applications inventions which the

inventors originally claimed in only one application.

Indeed, section 121 by its plain terms provides that pat-

ents resulting from the Patent Office’s forced division of

an application cannot be used as the basis of a double

patenting argument because of the unfairness which

would result.

Rather than arguing — as it does now - that section

121 cannot protect an inventor from a double patenting

defense, ASM argued below that Applied Materials

should be denied the protection to which it would other-

wise be entitled under section 121 because Applied Mate-

rials allegedly crossed a “line of consonance” in the

Patent Office’s division of the original patent application.

On this case-specific issue, all prior authorities have

agreed that Applied Materials did not cross this “line of

consonance”: the Patent Office (by issuing the ‘609 Pat-

ent), the District Court, and the Federal Circuit. See

ASM’s Petition, Appendix C at C23-27 (finding no double

patenting because consonance was not violated); id. at

Appendix A at A5-10 (affirming District Court’s finding

that “consonance was not violated”).

Before this Court, ASM no longer contends that con-

sonance was violated, and instead performs an about-face

and argues that section 121 cannot protect a patentee

even if consonance is maintained.

¢

= om

REASONS FOR DENYING THE PETITION

There are three independent reasons why ASM’s

Petition should be denied. First, legislation has effectively

mooted ASM’s argument because the 1994 amendments

to the patent law now limit the duration of patents to a

maximum of twenty years from the filing date of the

patent application, regardless of how many patents issue

therefrom. Second, ASM waived the argument on which

its Petition is based by not raising it below. Third, ASM’s

argument fails on the merits because the legislative his-

tory makes clear that the Federal Circuit’s application of

section 121 is correct.

I.

Legislation Has Effectively Eliminated

ASM’s Double Patenting Argument

It is well-settled that a petition for writ of certiorari

will be granted only if issues of substantial importance to

the public are presented, and such a petition is not prop-

erly based on issues which are only relevant to a litigant

operating under an obsolete legal regime which has been

superseded by legislation. In Rice v. Sioux City Memorial

Park Cemetery, Inc., 349 U.S. 70 (1955), this Court clearly

articulated this fundamental principle in dismissing a

writ of certiorari as improvidently granted:

[T]his Court does not sit to satisfy a scholarly

interest in such issues. Nor does it sit for the

benefit of particular litigants . . .

a * a

[I]n the absence of compelling reason, we

should not risk inconclusive and divisive dispo-

sition of a case when time may further illumine

or completely outmode the issues in dispute.

349 U.S. at 74, 77 (citations omitted). See also Triangle

Improvement Council v. Ritchie, 402 U.S. 497, 501-02 (1971)

(Harlan, J., concurring) (concluding that certiorari should

be dismissed as improvidently granted because of statu-

tory changes which limited the significance of the case).

The essence of ASM’s Petition is that the Federal

Circuit improperly interpreted section 121 to insulate

inventors from double patenting claims where multiple

patents issue from one original application as a result of

Patent Office actions. In straining to pique this Court's

interest, ASM argues that the Federal Circuit’s implemen-

tation of section 121 means that here “the Federal Circuit

fully endorsed this 31-year monopoly.” ASM’s Petition at

11. ASM reasons that this Court’s precedents grant com-

petitors the “unfettered right” to use a patented appa-

ratus after the patent expires. Leaving aside the

inaccuracy of this assertion, which is addressed in Section

III, infra, Congress’ fundamental overhaul of the way

patent terms are calculated has eliminated the speculative

concerns on which ASM’s Petition is based.

Before recent Congressional actions, United States

patents were granted a term of 17 years from the date of

issuance from the Patent Office. See 35 U.S.C. § 154 (1988)

(amended 1994). This 17-year term applied regardless of

when the inventor originally filed for the patent or even

how long the application was pending in the Patent

Office. Under the old regime, leaving aside the specifics

of double patenting law, it was theoretically possible for

two patents issuing from the same application to create

patent terms well in excess of 17 years. For example,

assume an application was filed in Year 1 and a first

patent issued from that application in Year 2. If a second

patent from that same “Year 1” application eventually

issued in Year 18, the cumulative, temporal patent protec-

tion granted for patents issuing from the original applica-

tion could exceed 30 years.

This type of extended temporal coverage is simply

impossible under the recent amendments to the patent

law. To satisfy its obligations under the “GATT” treaty,

the United States was forced to harmonize its “17 years

from issuance term” with the prevailing “20 years from

filing term” in effect around the world. See Uruguay

Round Agreement Act, Pub. L. No. 103-465, § 532, 108

Stat. 4983 (1994) (current version at 35 U.S.C. § 154(a)(2)

(1997)). Accordingly, on December 8, 1994, Congress

amended section 154 to read as follows in pertinent part:

Subject to the payment of fees under this title,

such grant shall be for a term beginning on the

date on which the patent issues and ending 20

years from the date on which the application

was filed in the United States or, if the applica-

tion contains a specific reference to an earlier

filed application or applications under sections

120, 121, or 365(c) of this title, from the date on

which the earliest such application was filed.

35 U.S.C. § 154(a)(2) (1997) (emphasis supplied).

Thus, under current law, in the hypothetical example

set forth above, all patents issuing from the original

patent application would expire simultaneously in Year

21. In fact, it is now impossible for patents stemming

from the same application to be effective for more than 20

years.2 Likewise, it is impossible for the term of one

patent to outlast the term of another if both patents

derive from the same application. Consequently, ASM’s

argument that the Federal Circuit’s interpretation of sec-

tion 121 creates a risk of lengthy “extensions,” or

deprives the public of the right to use expired patents,

even if it were meritorious, is of limited future signifi-

cance. Indeed, ASM’s argument only applies to patents

issued before June 8, 1995, the date on which the “20 year

term” went into effect. See Pub. L. 103-465 § 534, 108 Stat.

4983 (1994).

Given the very small fraction of pre-1995 applications

in which the double patenting issue could possibly arise,

and the fact that Congress has permanently resolved this

issue for all future patents, ASM’s argument is hardly a

candidate for a historical footnote, much less “cert wor-

thy” for Supreme Court attention.

Il.

ASM Has Waived Its Double Patenting Argument

By Failing To Raise It Until Now

It is well-established that this Court will not address

issues which the petitioner failed to raise below and

which, therefore, were never considered by the Court of

Appeals. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 148

2 Note that the “20 year term” will never truly provide an

inventor with 20 years of patent coverage because, as a practical

matter, patents are never granted immediately upon filing. The

actual patent term is now 20 years minus the time the

application is pending in the Patent Office.

n.2 (1970) (citations omitted) (“Where issues are neither

raised before nor considered by the Court of Appeals,

this Court will not ordinarily consider them.”). This prin-

ciple is based, among other things, on the fact that if the

issue has not been raised below, “the record is very likely

to be inadequate.” Cardinale v. Louisiana, 394 U.S. 437, 439

(1969). This is particularly applicable in this patent case,

because the Federal Circuit, which has special expertise

in this area, has not been given an opportunity to address

ASM’s recently-minted double patenting argument. See

Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical > Van

U.S. __, 117 S.Ct. 1040 (March 3, 1997) (recognizing that

the Federal Circuit is uniquely equipped to deal with

issues regarding patent law, which matters are within the

“area of its special expertise.”).

As previously noted, ASM’s Petition raises issues

which ASM squarely conceded below. ASM now argues

that “section 121 does not address double patenting” and

“the express terms of section 121 do not address double

patenting.” ASM’s Petition at 23, 26. However, ASM

admitted below that section 121 protects an inventor from

a double patenting claim if the two patents issued as a

result of a restriction requirement imposed by the Patent

Office. ASM based its double patenting defense solely on

the erroneous assumption that the ‘609 Patent was not

“consonant” with the Patent Office’s restriction require-

ment.

In the District Court, ASM made clear that section

121 does protect an inventor from double patenting claims

and, further, that ASM appreciates the valuable policy

behind section 121:

Section 121 merely embodies the common sense

rule that a patentee is not guilty of improper

double patenting if the Patent Office required

the patentee to obtain separate patents.

ASM’‘s Post-Trial Brief, dated August 1, 1993, at 45

(attached hereto as Appendix A) (citations omitted)

(emphasis supplied). The dispute at trial was simply an

argument about the location of the line of demarcation

for the consonance requirement under section 121. See,

e.g., ASM’s Post-Trial Reply Brief, dated August 20, 1993,

at 36 (attached hereto as Appendix B) (“the parties have

only one serious dispute on the issue of double patenting

- the location of the line of demarcation drawn by the

examiner.”). The District Court rejected ASM’s double

patenting defense because the ‘609 Patent was consonant

with the Patent Office’s restriction requirement, and the

parties agreed that, under those circumstances, the ‘609

Patent was entitled to the protection of section 121.

ASM’s Petition, Appendix C at C23-27.

On appeal, ASM admitted that at trial it had pre-

sented only the consonance issue to the District Court and

had not challenged the established law that section 121

protects an inventor against double patenting claims. See,

e.g., ASM’s Opening Appeal Brief, dated October 21,

1994, at 13 (attached hereto as Appendix C) (“The sole

question on double patenting before the district court

was where the line of demarcation was drawn... ”); id.

at 17 (“The only double patenting issue disputed below

was where the line of demarcation was drawn in the PTO

restriction requirement.”). In fact, on appeal, ASM flatly

admitted that section 121 protects an inventor from double

patenting claims if consonance is maintained:

9

Under 35 U.S.C. § 121, if the Patent Examiner

concludes that a single patent application claims

two or more “independent and distinct” inven-

tions, the Examiner may impose a restriction

requirement, forcing the applicant to pursue

each such invention through a patent applica-

tion. The resulting patent may not be used to

invalidate each other under the double patent-

ing doctrine, if the patentee carefully abides

by the Examiner’s restriction requirement.

Id. (emphases supplied) (citations omitted).

In affirming the District Court’s decision, the Federal

Circuit found that the District Court had correctly deter-

mined that consonance was not violated, and did not

‘ddress its own settled interpretation of section 121

because it was not asked to do so. See ASM’s Petition,

Appendix A at A5-10. The Federal Circuit thus concluded

that there was no double patenting because the ‘609 Pat-

ent was entitled to the protection of section 121.3 Id.

ASM’s suggestion to the Federal Circuit for a rehear-

ing in banc also focused on the “consonance” issue, and

ASM again admitted directly that section 121 does protect

inventors from double patenting claims. See ASM’s Peti-

tion For Rehearing And Suggestion For Rehearing In

Banc, dated November 21, 1996, at 1, 7 (attached hereto as

Appendix D) (discussing Ҥ 121 immunity from double

3 The dissent, like ASM, recognized that section 121

provides “immunity” from double patenting. Id. at A33 (Archer,

C.J., dissenting). The dissent differed from the majority only

because it was persuaded by ASM’s argument that

“consonance” was violated and “the claims have lost the

immunity of § 121.” Id.

a aa aaa ta eee eons eel

10

patenting” and “§ 121’s shield against double patent-

ing”).

Simply put, ASM’s reversal of its position is total.

ASM argues to this Court that the Federal Circuit’s sec-

tion 121 jurisprudence is “shockingly antithetical to this

Court’s binding precedents.” ASM’s Petition at 14. How-

ever, ASM did not cite even one Supreme Court case to

the Federal Circuit on the double patenting issue. Sim-

ilarly, ASM now argues that a consistent line of Federal

Circuit decisions regarding section 121 was wrongly

decided, including Texas Instruments, Inc. v. United States

Int'l Trade Comm'n, 988 F.2d 1165, 1179 (Fed. Cir. 1993),

and Symbol Tech., Inc. v. Opticon, Inc., 935 F.2d 1569, 1580

(Fed. Cir. 1991). ASM’s Petition at 20. Yet, ASM cited

these very same cases approvingly to the Federal Circuit

on the double patenting issue, without even mentioning

the supposed conflicts with Supreme Court case law it

alleges now.

Accordingly, ASM’s Petition should be denied

because ASM waived the argument on which its Petition

is based.

Ill.

There Is No Conflict Between This Court’s Precedent

And The Federal Circuit’s Interpretation Of Section 121

ASM wrongly argues that this Court has held that

competitors must have an absolute right to practice an

invention after a patent expires. See, e.g., ASM’s Petition

at 9 (“this Court has consistently held that the public is

free to use the invention of an expired patent without

aia Aaa Tim eb ta

11

restriction.”) (emphases supplied). From this false prem-

ise, ASM then argues that section 121 cannot possibly

shield an inventor from a double patenting claim despite

the plain language of section 121 and the equally clear

legislative history and cases interpreting the statute.

A. A Patent Grants The Right To Exclude, Not The

Right To Use

ASM’s analysis is fundamentally flawed because it

confuses the basic nature of a patent by failing to distin-

guish between the right to exclude and the right to use.

As a matter of statute, a patent is simply the right to

exclude others from exploiting an invention. 35 U.S.C.

§ 154(a)(1) (1997); see also Crown Die & Tool Co. v. Nye Tool

& Machine Works, 261 U.S. 24, 33 (1923) (“All that the

government grants and protects is the power to exclude

others from making, using, or vending during the grant

of 17 years.”) (citations omitted). The existence of a pat-

ent does not automatically grant even the inventor the

right to use his own invention. Id. at 34, 35. Indeed, as

this Court explained in Crown Die, other factors, includ-

ing the existence of other patents, as well as criminal

laws, may completely preclude an inventor from using

his or her own patented invention. Id.; see also Temco Elec.

Motor Co. v. Apco Mfg. Co., 275 U.S. 319, 328 (1928) (noting

that an improver may be precluded from practicing his

improvement by an earlier patent); Cantrell v. Wallick, 117

U.S. 689, 694 (1886) (“Two patents may both be valid

when the second is an improvement on the first, in which

event, if the second includes the first, neither of the two

patentees can lawfully use the invention of the other

12

without the other’s consent.”). Because inventors unques-

tionably may be precluded by other patents from using

their own inventions during the life of their patent, it is

simply impossible that the expiration of a patent confers

on non-inventors the absolute right to use the patented

invention.

Indeed, only weeks before submitting its Petition to

this Court, ASM itself argued in related litigation that it is

“axiomatic” that one patent may dominate over another

patent such that inventors themselves may not be entitled

to use their own inventions either before or after expira-

tion of a patent:

[I]t is axiomatic that a product embodying one

patent may nevertheless infringe another patent,

and therefore cannot be lawfully made or sold

absent the consent of the owner of the other

patent.

ASMA’s Motion To Set Claim Construction Hearing,

dated February 13, 1997, at 4 (attached hereto as Appen-

dix E).

In In re Heinle, 342 F.2d 1001 (C.C.P.A. 1965), Judge

Rich, one of the principal drafters of the 1952 Patent Act,

explained this point in detail:

The issuance of a patent is no guarantee or even

a representation that everything disclosed in it

is immediately free of patent or other restraints

legally created under the law. Should there be

such other [dominating] patents still in force

when a patent expires, the monopoly of the

expiring patent is not “extended”; that monop-

oly ends and any other patents which may affect

the rights of the public to use something the

areK rec erae

Ae RN NE

13

expiring patent discloses stand on their own

legal foundations. The expiration of a patent is

not a guarantee of a right to use. The right to

make, use or vend any given thing may be, and

often is, subservient to several patents expir-

ing at different times.

342 F.2d at 1005 (emphasis supplied) (citation omitted).

While ASM ignores the undeniable fact that dominat-

ing patents (which may be owned by a variety of differ-

ent competitors) routinely preclude the public from using

the inventions of both unexpired and expired patents,

ASM relies on dicta taken out of context from Supreme

Court cases that do not relate to double patenting or

section 121 at all. Indeed, ASM’s cited cases all involve

improper efforts to prolong the rights of an expired pat-

ent which have no basis at all in the patent law generally,

or section 121 specifically. See Bonito Boats, Inc. v. Thunder

Craft Boats, Inc., 489 U.S. 141, 157 (1989) (holding that

state law may not protect designs and utilitarian ideas

unprotected by a patent under the guise of “unfair com-

petition” law); Brulotte v. Thys Co., 379 U.S. 29, 32-34

(1964) (finding that an attempt to extract royalties based

on a license agreement for a term after a patent expires

constitutes patent misuse); Sears, Roebuck & Co. v. Stiffel

Co., 376 U.S. 225, 230-31 (1964) (holding that Supremacy

Clause of the Constitution precludes a state from apply-

ing “unfair competition” law to grant exclusive rights to

the manufacture and sale of a product); Scott Paper Co. v.

Marcalus Mfg. Co., 326 U.S. 249, 257-58 (1945) (finding that

the licensor of a patent is not estopped to deny liability if

sued on that patent if the patent is anticipated by an

expired prior art patent and thus invalid); Kellogg Co. v.

i4

National Biscuit Co., 305 U.S. 111, 117 (1938) (concluding

that if the tradename and tradedress of a patented prod-

uct becomes generic, the trademark loses its protectable

character and competitors may use that tradename for the

patented product when the patent expires); Singer Mfg.

Co. v. June Mfg. Co., 163 U.S. 169, 203 (1896) (same).

pengemnrnte

a —_—

B. Section 121 Protects Inventors From The Unfair-

ness Of Invalidating Patents Because Of Patent

Office Errors

The text of section 121, appellate decisions, the Pat-

ent Office’s rule making, and the legislative history, all

establish that section 121 protects a patentee from a dou-

ble patenting claim resulting from a Patent Office restric-

tion requirement.

1. The Text Of Section 121 Plainly Protects

Inventors From Double Patenting Claims

INI ms

Of course, the “starting point in every case involving

construction of a statute is the language itself.” United

States v. Hohri, 482 U.S. 64, 69 (1987) (quoting Kelly v.

Robinson, 479 U.S. 36, 43 (1986)). The text of section 121

plainly provides that patents issuing as a result of a

Patent Office restriction requirement may not be used as

references against other patents which issue from the :

same application, but which are in separate patents only

because of a Patent Office restriction requirement:

A patent issuing on an application with respect

to which a requirement for restriction under this )

section has been made, or on an application

filed as a result of such application, shall not be

———————e

15

used as a reference either in the Patent and Trade-

mark Office or in the Courts against a divisional

application or against the original application or

any patent issued on either of them, if the divi-

sional application is filed before the issuance of

the patent on the other application.

35 U.S.C. § 121 (1997) (emphases supplied).

2. The Courts Have Consistently Held That

Section 121 Protects Inventors From Double

Patenting Claims

The Federal Circuit has repeatedly applied the plain

language of section 121 to protect inventors from double

patenting claims without the dissent of any of its judges.

See, €.9., Studiengesellschaft Kéhle GmbH v. Northern

Petrochemical Co., 784 F.2d 351, 355, 357-61 (Fed. Cir. 1986)

(note especially the concurrence of Judge Newman care-

fully reviewing the statute and its legislative history);

Texas Instruments, Inc. v. United States Int'l Trade Comm'n,

988 F.2d 1165, 1179 (Fed. Cir. 1993) (“the protection of

section 121 applies and the claims of the later issued ‘027

patent are protected from an allegation of double patent-

ing”); Symbol Technologies, Inc. v. Opticon, Inc., 935 F.2d

1569, 1580 (Fed. Cir. 1991) (“The safeguard of § 121 there-

fore applies in this case, and the ’297 patent is not avail-

able as a reference [for double patenting purposes]

against the ‘186 patent.”).

Likewise, the predecessor to the Federal Circuit, the

United States Court of Customs and Patent Appeals,

interpreted the plain language of section 121 in the same

way. For example, in a concurring opinion in In re

16

Zickendraht, 319 F.2d 225 (C.C.P.A. 1963), Judge Rich

observed:

[T]he operation of the rule [of double patenting]

is that claims to inventions closely related to the

invention claimed in a patent and not patenta-

bly distinguishable therefrom must be included

in the same patent unless the applicant has been

forced to make them in a separate application by

a requirement of restriction, in which case sec-

tion 121 of the statute acts to waive the rule.

319 F.2d at 232. Similarly, in In re Schneller, 397 F.2d 350

(C.C.P.A. 1968), Judge Rich wrote for the court: “Neither

do we have any requirement of restriction, as provided in

35 U.S.C. § 121, to excuse [double patenting].” Id. at 355.4

3. The Patent Office Interprets Section 121 To

Protect Inventors From Double Patenting |

Claims

The Patent Office, which is responsible for interpret-

ing the patent law to administer the patent application

system, also has recognized that section 121 protects

inventors against double patenting claims. In its written

opinions, the Patent Office Board of Appeals has

expressly prohibited double patenting rejections of a divi-

sional application based upon a patent severed from the

same original application as a result of a Patent Office

restriction requirement. See, e.g., Ex parte Camarata, 151

4 These opinions by Judge Rich belie ASM’s claim (ASM’s

Petition at 23) that Judge Rich understood section 121 to mean

something different from the interpretation consistently given

by the Federal Circuit on which he still sits.

iia aii

17

U.S.P.Q. 739, 739 (Pat. Off. Bd. App. 1966); Ex parte Nantz,

141 U.S.P.Q. 523, 529 (Pat. Off. Bd. App. 1963).

The Patent Office’s Manual of Patent Examining Pro-

cedure (“MPEP”) is the agency’s official interpretation of

the parent law. Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d

1423, 1439 (Fed. Cir. 1984). The MPEP also provides that

section 121 protects patentees from double patenting

claims under circumstances applicable here. At the time

the patents involved in this litigation were pending, sec-

tion 804.01 of the MPEP stated:

35 U.S.C. § 121, third sentence, provides that

where the Office requires restriction at the

national stage, the patent of either the parent or

any divisional application thereof conforming to

the requirement cannot be used as a reference

against the other. This apparent nullification cf

double patenting as a ground of rejection or

invalidity in such cases imposes a heavy burden

on the Office to guard against erroneous

requirements for restriction where the claims

define essentially the same inventions in differ-

ent language and which, if acquiesced in, might

result in the issuance of several patents for the

same invention.

M.P.E.P. § 804.01 (5th ed. 1985) (emphases supplied); see

also id. at § 803.01.

4. The Legislative History Of Section 121

Establishes That Section 121 Protects Inven-

tors From Double Patenting Claims

The primary purpose of including the third sentence

of section 121 in the 1952 Patent Act was to protect

18

against the inherent unfairness which could arise from

the division practice of the Patent Office. The examiner

could require an inventor to restrict or divide his applica-

tion between claims in a patent application, thus requir-

ing that a second patent application be carved out from

the first. Then, the examiner (or a court) could reject the

claims of the second application on the basis of the claims

of the now patented first application, on the ground of

so-called “double patenting.” In this way, the inventor

would be deprived forever of protection for that portion

of his inventive work the examiner decided to divide out.

To address this concern, the first printed text of this

remedial legislation included the following provision:

If two or more patents are issued in conse-

quence of a requirement for restriction under

this section, no claim of any of said patents may

be held invalid solely by reason of its inclusion

in a separate patent.

See “Proposed Revision and Amendment of the Patent

Laws,” characterized as a “Preliminary Draft with Notes”

for the Committee on the Judiciary of the House of Repre-

sentatives, at 21 (Comm. Print January 10, 1950). PJ.

Federico, one of the principal drafters of the 1952 Patent

Act, confirmed in an accompanying Note that “neither of

the resulting patents can be held invalid over the other

merely because of their being divided in several patents.”

Id. at 22.5

>° ASM’s contention that Mr. Federico concluded “section

121 does not address double patenting” (ASM’s Petition at 23) is

baseless. Mr. Federico squarely confirmed in 1951 that section

121 was intended specifically to eliminate double patenting:

—_

19

The subsequent legislative history of the 1952 Patent

Act confirms that the plain language of section 121 was

intended to apply to a double patenting analysis. The

preliminary draft was revised and renumbered as section

120 of H.R. 9133, introduced in the 81st Congress, and

later, as section 120 of H.R. 3760, introduced in the 82d

Congress. The revised drafts omitted the proposed limita-

tion on the term of a divisional patent and narrowed the

prohibition against the use of a patent as a reference in

determining the validity of a divisional application or

parent:

If two or more patents are issued in conse-

quence of a requirement for restriction under

this section, neither patent may be used as a

reference against the other for the purpose of

section 103 of this title.

See H.R. 9133, 81st Cong., 2d Sess. § 120 (1950); H.R. 3760,

82d Cong., 1st Sess. § 120 (1951).

The hearing record on H.R. 3760 contains the Report

of the Laws and Rules Committee of the American Patent

Law Association, which states that:

Section 121 gives statutory expression to divi-

sion practice and specifically forbids the use of

either the original or the division as a reference

against the other.

(Continued from page 18)

“The intention of everybody is that double patenting is eliminated

either in the application stage or in the patent stage... . ” See

Proceedings, Mid-Year Meeting, Section of Patent, Trademark,

and Copyright Law, American Bar Association, held March

8-10, 1951, Shoreham Hotel, Wash., D.C., Vol. 1 at 257 (attached

hereto as Appendix F) (emphases supplied).

20

Hearings before Subcommittee No. 3 of the Committee on

the Judiciary, House of Representatives, Eighty-Second

Congress, First Session on H.R. 3760, 82d Cong., 1st Sess.,

Serial No. 9, at 45 (1951) (emphasis supplied). The revi-

sion Note for § 121, in the House and Senate reports

accompanying the 1952 Patent Act, summarized the law

as follows:

Neither of the resulting patents can be held

invalid over the other merely because of their

being divided in several patents.

S. Rep. No. 1979, 82d Cong., 2d Sess. 20, reprinted in 1952

U.S. Code Cong. & Ad. News 2394, 2413; H.R. Rep. No.

1923, 82d Cong., 2d Sess. 20 (1952).

Thus, the legislative history of the 1952 Patent Act

compels the conclusion that the third sentence of section

121 was intended to eliminate a double patenting analysis

when a patentee was subject to a requirement to restrict.

*

CONCLUSION

For the foregoing reasons, Applied Materials requests

that ASM’s Petition For Writ Of Certiorari be denied.

MattrHew D. Powers

Counsel of Record

Epwarp R. REINEs

Wet, GotsHAL & Mances LLP

2882 Sand Hill Road

Suite 280

Menlo Park, CA 94025

(415) 926-6200

Attorneys for Respondent

Applied Materials, Inc.

DATED: April 18, 1997

————

App. 1

APPENDIX A

Don W. Martens

Lowell Anderson

Vito A. Canuso III

KNOBBE, MARTENS, OLSON & BEAR

620 Newport Center Drive

Sixteenth Floor

Newport Beach, CA 92660

(714) 760-0404

Attorneys for Defendants

and Counterclaimants

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

Civil Action No.

APPLIED MATERIALS, INC., C-91 20061 RMW

Plaintiff,

DEFENDANTS’

= CORRECTED

ADVANCED SEMICONDUCTOR POST-TRIAL

MATERIALS AMERICA, INC., BRIEF

EPSILON TECHNOLOGY, INC.

doing business as ASM Ctrm: 2

EPITAXY, and ADVANCED

SEMICONDUCTOR INTL. N.V.,

Defendants.

Nee Ne Nee eee ee ee ee ee ee ee

App. 2

ADVANCED SEMICONDUCTOR

MATERIALS AMERICA, INC.,

EPSILON TECHNOLOGY, INC.

doing business as ASM EPITAXY,

Counterclaimants,

) [CITES TO TRIAL

) TRANSCRIPT

) PAGES 2435-2510

) HAVE BEEN

) CORRECTED TO

) REFER TO PAGES

) 2435A-2510A

)

)

)

V.

WHEN

APPLIED MATERIALS, INC.,

NECESSARY]

Counterdefendant.

V. THE ‘609 PATENT IS INVALID FOR

DOUBLE PATENTING

A. Applied Has Improperly Attempted To Gain 31 Years

Of Patent Protection For Its Reactor

A patent has a 17-year life. 35 U.S.C. § 154. The

doctrine of double patenting prevents a patentee from

extending his patent protection beyond this statutory 17-

year period. Under the doctrine of double patenting, a

patentee is not permitted to obtain two or more separate

patents for the same invention or obvious variants of the

same invention. In re Longi, 759 F.2d 887, 892 (Fed. Cir.

1985). In this way, the patentee is prevented from obtain-

ing more than 17 years’ protection for essentially the

same invention. This, however, is precisely what Applied

has done here.

Applied first obtained a patent for the invention at

issue in this case in 1971, when the ‘712 patent issued.

This patent has long since expired. Applied’s protection

for the invention claimed in the ‘712 patent, however, has

not. In 1985, just three years before the expiration of the

aac eae

App. 3

‘712 patent, Applied obtained the ‘609 patent based on

the same original 1969 application as the ‘712 patent.

Applied has not disputed that the claims of the ‘609

patent are obvious in view of the claims of the ‘712 patent

and the related ‘496 patent. The ‘609 patent, however, will

not expire until the year 2002. Thus, Applied has

obtained 31 years of patent protection for what is admit-

tedly a single invention, or an obvious variant of it. Upon

expiration of the ‘712 patent in 1985, the public gained

nothing in exchange for Applied’s first 17 years of exclu-

sive rights to its reactor.

B. Section 121 Of The Patent Act Does Not Entitle

Applied To 31 Years Of Patent Protection For Its

Reactor

Applied concedes that ordinarily a patentee is not

entitled to two patents claiming obvious variants of the

same invention. Applied, however, attempts to rely upon

a narrow exception to this rule set forth in 35 U.S.C. § 121

to justify the 31 years of protection it seeks to maintain

for its reactor.

Under Section 121, if the Patent Examiner concludes

that a single patent application claims two or more “inde-

pendent” or “distinct” inventions, the Examiner may

impose a restriction requirement, requiring the applicant

to pursue each invention through a separate patent appli-

cation. 35 U.S.C. § 121. The resulting patents, under cer-

tain circumstances, may not be used to invalidate each

other under the double patenting doctrine. Id.; Gerber

Garment Technology, Inc. v. Lectra Systems, Inc., 916 F.2d

683, 687 (Fed. Cir. 1990).

App. 4

Section 121 merely embodies the common sense rule

that a patentee is not guilty of improper double patenting

if the Patent Office required the patentee to obtain sepa-

rate patents. Gerber Garment, 916 F.2d at 687; Stud-

iengesellchaft Kohle mbH v. Northern Petrochemical Co., 784

F.2d 351, 358-61 (Fed. Cir. 1986) (Newman, J., concurring).

To be entitled to the protection of Section 121, however, a

patentee must carefully abide by the Examiner’s restric-

tion requirement. The patentee may not amend its claims

and cross “the line of demarcation between the ‘indepen-

dent and distinct inventions’ ” identified by the Examiner

in his restriction requirement. Symbol Technologies, Inc. v.

Opticon, Inc., 935 F.2d 1569, 1579 (Fed. Cir. 1991) (quoting

Gerber Garment, 916 F.2d at 688). If the patentee does,

“consonance” between the distinct inventions is not

maintained and the protection of Section 121 does not

apply. Id. In this case, Applied crossed the line of demar-

cation.

1. The Examiner Drew The Line Of Demarcation

Between Epitaxial Deposition Specifically And

Chemical Vapor Deposition Generally

The 1970 restriction requirement identifies the inven-

tion of Group III, the invention at issue here, as “a gas-

eous epitaxial coating process.” Exh. 15. The Examiner

explained his reasons for concluding that the Group III

claims constituted a distinct invention in a single sen-

tence:

App. 5

The process of Group III is a distinct invention

from the apparatus of Groups I and II which

could be used for non-epitaxial deposition.

Exh. 15 at 38 (emphasis added).

This distinction between epitaxial and non-epitaxial

deposition is the only reason given by the Examiner for

concluding that the inventions were distinct. As con-

firmed by ASM’s expert, Mr. Carney, this was the distinc-

tion, the line of demarcation, drawn by the Examiner.

2. The Examiner Did NOT Conclude That The

Inventions Were Distinct Merely Because They

Fell Into Separate Classes Or Were Method And

Apparatus Inventions

At trial, Applied argued that the separate classifica-

tion of the three Groups of claims was the reason the

inventions were distinct. This argument is meritless.

Most fundamentally, Applied’s argument confuses

the Examiner’s conclusion that two distinct inventions

are claimed with the Examiner’s discretionary decision to

impose a restriction requirement. The relevant statute

and regulations make clear that these are two distinct

decisions, and instruct the Examiner to list his reasons for

each of these decisions separately.

Section 121 states in relevant part:

If two or more independent and distinct inven-

tions are claimed in one [patent] application, the

Commissioner may require the restriction of the

application to one of the inventions.

App. 6

35 U.S.C. § 121 (emphasis added). By its plain terms,

Section 121 requires the Commissioner of Patents

(through an Examiner) to make two separate determina-

tions. First, he must determine whether a single patent

application claims “two or more independent and distinct

inventions.” Id. Second, he must exercise his discretion

and decide whether he will “require the restriction of the

application to one of the inventions.” Id.

Consistent with the statute, the Manual of Patent

Examining Procedure instructs Examiners issuing a

restriction requirement to state (1) “the reasons . . . why

the inventions as c’*imed are either independent or dis-

tinct,” and (2) “the reasons for insisting upon restriction

therebetween.” M.P.E.P. § 806 (Exh. 975). To facilitate

compli2nce, the Examiners are provided with a restriction

requirement worksheet, containing pre-printed and

numbered paragraphs with blank spaces in which the

Examiners are to insert their reasons. See Exh. 15 at 35.

The Examiners are explicitly instructed that their

“allegation of distinctness,” which must “point out facts

which show distinctness,” should appear in the third

paragraph of the worksheet. Thus, by looking to the third

paragraph of the Examiner’s worksheet, the Court can

determine the Examiner’s reasons for finding “distinct”

inventions.

The PTO printed form for the third paragraph of the

worksheet states that “the inventions as above grouped

are separate and distinct because__.” The Examiner

filled in that blank, including that the invention “of

Group III is a distinct invention” and then stated the

factual basis for that conclusion: because “the apparatus

App. 7

of Groups I and II . . . could be used for non-epitaxial

deposition.” Exh. 15 at 35 § 12 (emphasis added). This

clearly tracks the language of Section 121 and the M.P.E.P.

which require the Examiner to determine whether or not

two inventions are “distinct” and to “point out the facts

which show distinctness.” 35 U.S.C. § 121; M.P.E.P.

§§ 808(1) and 817(c).

Moreover, the reason given by the Examiner for find-

ing distinctiveness is one of the five reasons listed in

Section 817(c) of the MPEP for finding distinctness. The

Examiner concluded that the claimed apparatus of

Groups I and II could be used for a different (non-epitax-

ial) process than the claimed invention of Group III. Exh.

15 at 35 J 12, 38 J 12. Section 817(c) of the MPEP speci-

fically lists as a reason for finding distinctness the fact

that an “apparatus can be used in other processes.”

The Examiners are also explicitly instructed that their

“allegation of reasons for insisting upon restriction” i.e.,

exercising discretion to restrict between the distinct

inventions, should appear in the fourth paragraph of the

worksheet. They are again given a list of appropriate

reasons for insisting upon restriction. M.P.E.P. § 817(1)

(Exh. 975). Thus, by looking to the fourth paragraph of

the Examiner’s worksheet, the Court can determine the

Examiner’s reasons for exercising his discretion to

impose a restriction requirement. The fourth paragraph

makes clear that the Examiner had already concluded in

the third paragraph that the inventions were distinct by

referring to “these distinct inventions.” Exh. 15 at 36 { 13,

at 38 J 13. The fourth paragraph then gives three reasons

for exercising his discretion to conclude that “restriction

for examination purposes is

App. 8

916 F.2d at 688. If Applied crossed the line of demarca-

tion, and claimed non-epitaxial coating processes, the

‘609 patent is invalid for double patenting. Id.

It is undisputed that Applied crossed this line. The

claims of the ‘609 patent are not longer limited to “epitax-

ially coating” a wafer, as was the invention identified by

the Examiner as Group III. Instead, like the issued and

expired claims of the ‘712 and ‘496 patents, the ‘609

claims are for “chemical vapor deposition coating” (CVD)

of a wafer. Exh. 10, 1. 1; TR. 1567. CVD includes the non-

epitaxial depositions of the inventions identified by the

Examiner as Groups I and II. TR. 1562, 3089-90. Applied

thus crossed this line of demarcation, and Applied pre-

sented no evidence to the contrary.

4. The Claims Of The ‘609 Patent Are Obvious In

View Of The ‘712 And ‘496 Claims And The Prior

Art

ASM’s legal expert, Mr. Johnston, explained in detail at

trial why Claims 1 and 3 of the ‘609 patent, the only

claims asserted, are obvious over the claims of the ‘712

and ‘496 patents. TR. 2622-35; Exh. 969-71. Applied

offered no evidence to the contrary and did not cross-

examine Mr. Johnston on the subject. The obviousness of

the claims of the ‘609 patent is thus essentially undis-

puted. Claims 1 and 3 of the ‘609 patent are therefore

invalid for double patenting.

App. 9

VI. APPLIED’S ‘609 AND ‘313 PATENTS ARE INVALID

AS OBVIOUS OVER THE PRIOR ART

The presumption that a patent is valid may be rebut-

ted by clear and convincing evidence. American Hoist &

Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed.

Cir.), cert. denied, 469 U.S. 821 (1984). A patent claim is

invalid if the subject matter of the claim as a whole would

have been obvious at the time the invention was made to

a person having ordinary skill in the art. 35 U.S.C. § 103.

In determining invalidity, a person of ordinary skill in the

art is presumed to be aware of all the pertinent prior art.

In re Winslow, 365 F.2d 1017, 1020 (C.C.P.A. 1966).

Under 35 U.S.C. § 103, obviousness is a legal conclu-

sion involving a preliminary determination of four fac-

tual inquiries: (1) the scope and content of the prior art;

(2) the

* * *

pattern of concealment and misrepresentation that runs

throughout all of the McNeilly-Benzing patents. There are

multiple acts of inequitable conduct for each of the four

McNeilly patents. That pattern of misconduct, conceal-

ment and misrepresentation establish a reckless disregard

of the truth which justifies an award of attorneys fees and

expenses. See Mathis v. Spears, 857 F.2d 749, 751 (Fed. Cir.

1988).

The ASM Defendants should be awarded their attor-

neys fees and expenses incurred in defending against the

four McNeilly patents. They should be awarded their fees

and expenses incurred in defending against the with-

drawn ‘751 patent as well.

App. 10

Respectfully submitted,

KNOBBE, MARTENS, OLSON & BEAR

Dated: 8/5/93 By: /s/ Don W. Martens

Don W.Martens

Attorneys for Defendants and

Counterclaimants

App. 11

APPENDIX B

Don W. Martens

Lowell Anderson

Vito A. Canuso III

KNOBBE, MARTENS, OLSON & BEAR

620 Newport Center Drive

Sixteenth Floor

Newport Beach CA 92660

(714) 760-0404

Attorneys for Defendants

and Counterclaimants

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

APPLIED MATERIALS, INC., Civil Action No.

C-91 20061 RMW

Plaintiff,

y. DEFENDANTS’

POST-TRIAL

ADVANCED SEMICONDUCTOR REPLY

MATERIALS AMERICA, INC., MEMORANDUM

EPSILON TECHNOLOGY, INC. ma ,

rm:

doing business as ASM

EPITAXY, and ADVANCED

SEMICONDUCTOR INTL. N.V.,

Defendants.

(Judge Ingram)

ADVANCED SEMICONDUCTOR

MATERIALS AMERICA, INC.,

EPSILON TECHNOLOGY, INC.

doing business as ASM EPITAXY,

Counterclaimants,

v.

APPLIED MATERIALS, INC.,

Counterdefendant.

App. 12

* * ”

C. Applied’s Interpretation Of Claims 1 And 4 Neces-

sarily Encompasses Prior Art — (124)

Applied attacks Berkman because the claims require

that the improved process occur in the reaction chamber.

Applied relies upon Carney’s testimony that Berkman

does not consider the end isolation zone in his contin-

uous reactor to be part of the “chamber.” However, Car-

ney and Peltzer also made it clear that Berkman expressly

applies his pre-heat process to a batch reactor. TR. 1520,

2190.

[I]t should be understood the principle of the

invention is applicable to conventional CVD

batch reactors in which the substrates or wafers

are stationary.

Exh. 565 at col. 7:19-22. In a continuous reactor, each step

occurs in a different zone. In a batch reactor, each step

necessarily occurs in the same zone. The steps, however,

are still the same: a pre-deposition purge of the wafer

conducted at elevated temperatures maintained above

180°C.

Applied has offered no argument at all on the testi-

mony of Carney that Claims 1 and 4 cannot be inter-

preted to cover purging a reactor at above 180°C or it

would cover the prior art process disclosed in Table 1 of

the Logar patent.® See TR. 1510 et seq.

8 The prior art process of Table 1 includes applying radiant

lamp flux during the predeposition purge to heat the wafer to

850°C (Step 3). See ASM’s Corr. Brief at 38-39.

App. 13

III. THE ‘609 PATENT IS INVALID FOR DOUBLE

PATENTING, AND APPLIED OFFERS NO REA-

SONABLE ARGUMENT TO THE CONTRARY

(APPLIED BRIEF AT 166)

As the post-trial briefs make clear, the parties have

only one serious dispute on the issue of double patenting

- the location of the line of demarcation drawn by the

Examiner. The line of demarcation separates the “inde-

pendent and distinct inventions” of the ‘609 patent and

the other McNeilly patents. See Symbol Technologies, Inc. v.

Opticon, Inc., 935 F.2d 1569, 1579 (Fed. Cir. 1991).

ASM contends the Examiner drew the line between

inventions capable only of epitaxial deposition, and

inventions capable of both epitaxial and non-epitaxial

deposition. The evidence supporting ASM’s position is

discussed in ASM’s Corr. Brief at 44-48. Applied contends

the Examiner drew the line between method claims fal-

ling into Class 117 and apparatus claims falling into

Classes 118 and 263. Applied’s position is meritless.

A. Applied’s Argument Is Supported By No Probative

Evidence And Ignores 20 Years Of Settled Law

The only support Applied has found for its proposed

line of demarcation is the testimony of its legal expert. See

Applied Br. at 171. That testimony, however, states no

facts which support that conclusion. Applied’s expert did

not explain to the Court the meaning of the disputed

restriction requirement in view of the relevant statutes,

regulations, or provisions of the Manual of Patent Examin-

ing Procedure. He merely asserted that “the law as I

App. 14

understand it” required the Examiner to separate inven-

tions based upon their classification. TR. 3496:24-25. This

conclusory testimony as to a question of law is entitled to

no weight. In re Wright, No. 92-1437, slip op. at 13 (Fed.

Cir. July 20, 1993) (copy in Appendix 3); Becton Dickinson,

922 F.2d at 797; Molinaro v. Fannon/Courier Corp., 745 F.2d

651, 654 (Fed. Cir. 1984). This Court must decide for itself

what the law is.

Moreover, the testimony of Applied’s expert is

directly contrary to more than 20 years of settled law and

administrative practice. As explained in ASM’s Corr.

Brief, the Manual of Patent Examining Procedure, both in

1969 and today, prohibited Examiners from basing a

restriction requirement strictly upon the classification of

an invention as a method or apparatus. See ASM’s Corr.

Brief at 48 (quoting Exh. 975 - 1970 M.P.E.P. § 806.05(e);

M.P.E.P. § 806.05(e) (5th ed. rev. 1992).

Applied’s expert testimony is directly contrary to

Section 806.05 of the Manual of Patenting Examining Pro-

cedure. This section sets forth the standards for determin-

ing whether or not two “related inventions” are

“distinct.” Exh. 975: M.P.E.P. § 806.05. The subsections

following Section 806.05 then set forth the various rela-

tionships between “related” inventions which may or

may not be distinct. See id. (final paragraph). For exam-

ple, Sections 806.05(a)-(c) set forth the conditions under

which a combination and subcombination are distinct

inventions. M.P.E.P. § 806.05(a)-(c). Similarly, Section

806.05(f) sets forth the conditions under which a process

and the product made by the process are distinct inven-

tions. M.P.E.P. § 806.05(f).

App. 15

In this case, the relevant section is Section 806.05(e).

There is no dispute that the relationship between the

inventions in this case is that they are a “[p]rocess and

apparatus for its practice.” M.P.E.P. § 806.05(e). Section

806.05(e) deals specifically with this situation.

Section 806.05(e) is quite clear that there are only two

circumstances under which such related apparatus and

method inventions may be found to be distinct;

(1) that the process as claimed can be practiced

by another materially different apparatus or by

hand, or (2) that the apparatus as claimed can be

used to practice another and materially different

process.

Exh. 975: M.P.E.P. § 806.05(e).

If two inventions were per se distinct merely because

one was an apparatus and the other was a method, Sec-

tion 806.05(e) would simply say so, rather than setting

forii: this elaborate two-part test for determining the

distinctness of related apparatus and method inventions.

Likewise, if two inventions were per se distinct merely

because they fell into separate classes, Section 806.05(e)

would simply say so. But once again it does not. Instead,

it sets forth the two specific circumstances under which

related apparatus and method inventions are distinct.

In this case, the condition which justified the Exam-

iner’s finding of distinctness is the fact that Applied’s

“apparatus as claimed can be used to practice another

and materially different process.” M.P.E.P. § 806.05(e)(2).

The Examiner correctly stated that Applied’s apparatus

as claimed can be used to practice both epitaxial and non-

epitaxial chemical vapor deposition, while Applied’s

App. 16

method as claimed at the time of restriction was limited

to epitaxial chemical vapor deposition. Applied thus

could properly obtain separate patents for these two dis-

tinct inventions. See 35 U.S.C. § 121; M.P.E.P.

§ 806.05(e)(2).

“short description of [the] total extent of the subject

matter claimed in each group,” and specifies the classi-

fication of each group. Exh. 975: M.P.E.P. § 817(A). See

Applied Br. at 171. Applied simply misunderstands the

Examiner’s “short description” of the group III invention

and offers no evidence in support of its interpretation.

The Examiner described the invention of group III as

“a gaseous epitaxial coating process.” ASM contends that

the word which distinguishes this group III invention

from Applied’s other inventions is “epitaxial.” Applied

contends that the word which distinguishes this inven-

tion from Applied’s other invention is “process.” In sup-

port of its interpretation, ASM guided the Court through

the instructions the Examiner must follow - instructions

which require the line of demarcation offered by ASM

and forbid the line of demarcation offered by Applied;

and ASM guided the Court through the remainder of the

Office Action, including Paragraph 12, to show that the

Examiner meticulously followed these instructions.

ASM’s Corr. Brief at 44-49. In support of its interpretation

of Paragraph 11, Applied once again offers nothing but

the conclusory and unfounded testimony of its expert

witness. See Applied Br. at 171-74.

|

App. 17

B. Texas Instruments v. ITC Gives Applied No Support

Confronted with more than 20 years of consistent

Patent Office practice, Applied attempts to bolster its

position by relying upon Texas Instruments, Inc. v. U.S.

Int'l Trade Comm'n, 988 F.2d 1165 (Fed. Cir. 1993).

Applied misunderstands the ITC’s holding in Texas

Instruments upon which it relies.? In Texas Instruments, as

in the present case, the Patent Office issued a restriction

requirement identifying three inventions, groups I, II and

Ill. Id. at 1179. The Examiner identified the invention of

group III as “a lead frame for semiconductor

devices. .. . ” Id. However, the actual claims which the

Examiner listed in group III did not fit this description.

The Examiner included in group III a claim “associated

with transfer molding,” even though “he described that

group not to include transfer molding.” Id. Faced with a

choice between the Examiner’s inaccurate description of

a group of claims and the claims themselves, the ITC

chose the claims themselves. Id. The ITC chose “the actual

restriction groupings” and not “the written descriptions

thereof.” Id.

° Applied relies upon a holding of the ITC quoted in a

Federal Circuit opinion, not a holding of the Federal Circuit

itself. The Federal Circuit in Texas Instruments stated only that it

agreed with the ITC’s ultimate finding that consonance had

been maintained. Texas Instruments, 988 F.2d at 1179. The

Federal Circuit said nothing about the ITC’s legal conclusion

quoted by Applied as the law of the Federal Circuit.

App. 18

Correctly understood, the ITC’s holding in Texas

Instruments simply has no relevance to the present case.

The ITC held that an Examiner’s description of the claims

he has grouped together is not controlling if the Examiner

has failed to accurately describe the claims he has

grouped together. Id. Here, none of the parties contend

that there is any inconsistency between the claims placed

by the Examiner in group III and his description of those

claims in the restriction requirement. The parties dispute

only what distinction the Examiner drew between the

claims of group III and the other claims. As explained in

ASM’s Con. Brief, a review of the Examiner’s restriction

requirement and the regulations the Examiner must fol-

low shows that the line of demarcation was drawn

between epitaxial deposition specifically and chemical

vapor deposition generally. See ASM’s Corr. Brief at

44-49.

Applied also misapplies the holding of Texas Instru-

ments to the facts of this case. Relying upon the ITC’s

holding that the “actual restriction groupings” are con-

trolling, Applied looks to the Examiner’s written descrip-

tion of those groupings in Paragraph 11 of the Office

Action. Applied Br. at 174. The opinion in Texas Instru-

ments makes clear, however, that the “actual restriction

groupings” are the claims themselves, not the Examiner’s

written description of those claims. Texas Instruments, 988

F.2d at 1179. Indeed, it was the Examiner’s written

description, upon which Applied relies, that the ITC

rejected in Texas Instruments. Id. Thus, Applied’s effort to

bolster the significance of Paragraph 11 of the Office

Action by relying upon Texas Instruments is meritless.

App. 19

C. Applied’s Reliance Upon Symbol Technologies v. Opti-

con Is Misplaced

Applied’s contention that Symbol Technologies, 935

F.2d 1569, supports its position is likewise meritless. Con-

trary to Applied’s apparent contention, the court in Sym-

bol Technologies in no way suggested that courts should

look to Paragraph 1 of a restriction requirement, rather

than Paragraph 3 of a restriction requirement, to find the

line of demarcation. Symbol Technologies simply does not

speak to this issue. Nor does Symbol Technologies suggest

that a line of demarcation is based upon classification.

In fact, Symbol Technologies strongly supports ASM’s

position. In Symbol Technologies, the court expressly

rejected the argument that the line of demarcation was

drawn between apparatus claims and method claims and

permitted the patentee to place both apparatus and

method claims in the same patent. Id. at 1580. The court

reached this conclusion even though the Examiner identi-

fied one group as a “method” and another group as an

“apparatus.” Id.

Moreover, the court expressly based its conclusion

upon the prevailing Patent Office practice at the time of

the restriction requirement. Id. The court relied upon the

declaration of an expert witness stating that in the elec-

tronic arts the PTO has not restricted between claims to

an apparatus and to a method of using the apparatus. Id.

Similarly, ASM has relied upon the Manual of Patent

Examining Procedures and expert testimony to show that it

was not Patent Office practice to restrict between method

and apparatus claims except as set forth in Section

806.05(e) of the M.P.E.P. (Exch. 975).

App. 20

D. Applied’s Criticism Of Mr. Carney’s Testimony Is

Meritless

Mr. Carney testified that the restriction requirement

dated January 11, 1971 drew a line of demarcation

between inventions having epitaxial deposition and

inventions having chemical vapor deposition generally.

TR. 1564:15-25. Mr. Carney based his conclusion on a

review of the restriction requirement and the instructions

which the Examiner must follow in issuing a restriction

requirement. TR. 1559:10-1564:23. After reviewing the

issued claims of the ‘609 patent, Mr. Carney concluded

that the line of demarcation had been crossed. TR.

1567:2-1570:16.

Applied attempts to discredit Mr. Carney’s testimony

by relying upon a single, irrelevant misstatement made

by Mr. Carney. During his second day of testimony, Mr.

Carney stated it was his understanding that Applied

crossed the line of demarcation by amending the ‘609

application very late in the prosecution. TR. 1678:7-9. In

fact, the amendment to which Mr. Carney referred

occurred early in the prosecution of the ‘609 patent.

This misstatement is irrelevant because the ‘609 pat-

ent is invalid for double patenting regardless of when

Applied crossed the line of demarcation, so long as

Applied did cross it for the issued claims. Gerber Garment

Tech., Inc. v. Lectra Sys., Inc., 916 F.2d 683, 688 (Fed. Cir.

1990) (claims may not be amended to cross the line of

demarcation); TR. 1736:21-24. Mr. Carney testified that

the line of demarcation was crossed when Applied

amended its claims to include non-epitaxial deposition.

App. 21

TR. 1567:2-1570:6. Whether this occurred at the beginning

or end of prosecution is irrelevant, and Applied does not

contend otherwise.

Nor does this single misstatement during four days

of testimony in any way undermine Mr. Carney’s cred-

ibility. Mr. Carney’s unfamiliarity with the details of the

16 year prosecution of the ‘609 patent is neither surpris-

ing nor relevant to assessing the weight to be given to his

testimony. Mr. Carney testified that he did not review the

entire prosecution history of the ‘609 patent and did not

need to. TR. 1736:2-14. To determine the line of demarca-

tion, he reviewed the restriction requirement in which the

Examiner set that line. TR. 1553:4-10, TR. 1736:2-14. To

determine that the line had been crossed, he reviewed the

issued claims. TR. 1553:11-13, TR. 1736:2-14. There was no

reason for Mr. Carney to review the remainder of the 16

year prosecution history to determine when the line of

demarcation was crossed because he was not asked to do

so and there was no reason to ask him to do so. Again,

the time at which Applied crossed the line is not relevant

to any issue before this Court.

Applied’s other effort to find an inconsistency in Mr.

Carney’s testimony is strained at best. See Applied Br. at

177. Mr. Carney testified that consonance must be main-

tained throughout prosecution. Id. (quoting TR.

1568:7-10). Applied does not dispute that this is an accu-

rate statement. Mr. Carney also testified that consonance

is assessed by comparing the restriction requirement to

the issued claims, not the intermediate rejected claims. Id.

(quoting TR. 1751:16-25). Applied does not dispute that

this is an accurate statement either. Nevertheless, applied

attacks Mr. Carney’s credibility by arguing that these two

App. 22

accurate statements are somehow inconsistent. They are

not.

Mr. Carney’s statement that consonance must be

maintained “throughout the entire pursuit of the claims”

simply means that the requirement of consonance never

expires, even when, as in this case, the prosecution lasts

for 16 years. If consonance is ever broken, the claims

which are on the wrong side of the line of demarcation

may be invalid for double patenting. Gerber Garment, 916

F.2d at 688. However, it would be a meaningless exercise

for this Court to determine whether or not unissued

claims were on the wrong side of the line of demarcation.

Thus, as Mr. Carney testified, it is only necessary to look

to the issued claims to determine whether any of the

issued claims are invalid for double patenting. See In re

Bartfeld, 925 F.2d 1450, 1453 (Fed. Cir. 1991) (“Double

patenting depends entirely on what is claimed in an

issued patent.”); see also Ortho Pharm. Corp. v. Smith, 959

F.2d 936, 943 (Fed. Cir. 1992) (“it is the claims that are

compared when assessing double patenting”).

Finally, Applied attempts to undermine the testi-

mony of Mr. Carney by misrepresenting the testimony of

Mr. Johnston. See Applied Br. at 177-78. At no point did

Mr. Johnston testify that the claims of the ‘609 patent are

limited to epitaxial deposition. He clearly and unequivo-

cally stated that the claims broadly cover “chemical vapor

deposition,” and that chemical vapor deposition

“includes epitaxial deposition.” TR. 3089:22-23. Applied

has never before disagreed with this conclusion.

The excerpt of testimony quoted by Applied in no

way suggests that Mr. Johnston construed chemical vapor

aa

App. 23

deposition to be limited to epitaxial deposition. Mr. John-

ston was merely quoting a portion of the patent specifica-

tion describing the background of the invention, and

making the obvious point that the ‘609 patent discusses

epitaxial deposition. TR. 3090:18-21. He never even

remotely suggested that the claims of the ‘609 patent are

limited to epitaxial deposition. On this point, Applied

simply misrepresents the record.

* * *

For the reasons discussed in ASM’s Corr. Brief, all the

patents should be held unenforceable.

Respectfully submitted,

KNOBBE, MARTENS, OLSON

& BEAR

Dated 8/20/93 By: /s/ Lowell Anderson

Don W. Martens

Lowell Anderson

Vito A. Canuso III

Attorneys for Defendants

and Counterclaimants

PROOF OF SERVICE

I am a citizen of the United States of America and am

employed in the offices of the law firm of Knobbe, Mar-

tens, Olson & Bear in Newport Beach, California. I am

over the age of 18 and not a party to the within action.

My business address is 620 Newport Center Drive, 16th

Floor, Newport Beach, California 92660. On August 20,

1993 I served the within Defendants’ Post-Trial Reply

Memorandum on the parties or their counsel shown

App. 24

below by placing a true copy thereof enclosed in a sealed

envelope addressed as follows:

Via Federal Express to:

Matthew D. Powers

Edward R. Reines

WEIL, GOTSHAL & MANGES

2882 Sand Hill Road, Suite 280

Menlo Park, CA 94025

I declare that I am employed in the office of a mem-

ber of the bar of this court at whose direction the service

was made.

Executed on August 20, 1993 at Newport Beach, Cali-

fornia.

/s/ Cynthia M. Reichner

Cynthia M. Reichner

App. 25

APPENDIX C

BRIEF FOR APPELLANTS

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

Appeal Nos. 94-1428,-1466

APPLIED MATERIALS, INC.,

Plaintiff/Cross-Appellant,

US.

ADVANCED SEMICONDUCTOR MATERIALS

AMERICA, INC., EPSILON TECHNOLOGY, INC.,

d/b/a ASM EPITAXY,

Defendants-Appellants,

and

ADVANCED SEMICONDUCTOR

INTERNATIONAL N.V.,

Defendant.

APPEAL FROM DECISIONS OF THE UNITED STATES

DISTRICT COURT FOR THE NORTHERN DISTRICT

OF CALIFORNIA IN C-91-20061,

ENTERED JULY 15, 1994 AND AUGUST 11, 1994

JUDGE WILLIAM A. INGRAM

App. 26

Don W. MArtTENS Dona_Lp R. DUNNER

LoweLL ANDERSON

FINNEGAN, HENDERSON,

JoHN B. SGANGa, Jr. Farasow, Garrett &

Vito A. Canuso III D

UNNER

Knonee, MAxrenm, Ous0N = 1999 ue Siuset NW.

& BEAR

Suite 700

620 Newport Center Drive, Washington, D.C. 20005

16th Floor (202) 408-4000

Newport Beach, California

92660

(714) 760-0404

Attorneys for Appellants

ADVANCED SEMICONDUCTOR MATERIALS

AMERICA, INC. and EPSILON TECHNOLOGY, iNC.

* * *

improvement over the claimed invention. The Epsilon

One was the first commercially available reactor to proc-

ess semiconductor wafers individually. A236:2-5. All

prior commercial reactors, including Applied’s, processed

wafers in large batches. A133:4-21. Single-wafer process-

ing allows much more precise quality control than pro-

cessing batches of wafers. A196:6-14, A237:1-8.

In order to be competitive, however, the Epsilon One

also needed to process the wafers at a high rate. To

increase the rate at which wafers are processed, the

Epsilon One reactor removes and loads the wafers at

elevated temperatures of above 850°C. This avoids the

time required to cool down and heat up the reactor as is

done with conventional batch reactors, and results in a

competitive rate of throughput. A547; A140:4-141:14,

A165:4-19, A185:6-186:19, A238:13-239:1.

—

a eee

Rr Ae

ta le

App. 27

ASM’s new single wafer process has been the subject

of over 20 U.S. and foreign patents. A350-64; A446-65,

A508-26. Applied has adopted ASM’s single-wafer tech-

nology and is replacing its batch reactors with single-

wafer reactors. A134:4-15.

Ill. SUMMARY OF ARGUMENT

A. The ‘609 Patent Is Invalid For Double Patenting

The ‘609 patent issued from a divisional application

filed after a restriction requirement. However, the restric-

tion requirement does not immunize the ‘609 patent from

double patenting invalidity because the ’609 claims were

subsequently amended to cross the line of demarcation

between the distinct inventions drawn by the restriction

requirement.

The sole question on double patenting before the

district court was where the line of demarcation was

drawn — between PTO classes or between epitaxial and

other CVD

* * *

requirement during prosecution of the original 1969

application.

Under 35 U.S.C. § 121, if the Patent Examiner con-

cludes that a single patent application claims two or more

“independent and distinct” inventions, the Examiner may

impose a restriction requirement, forcing the applicant to

pursue each such invention through a separate patent

application. The resulting patents may not be used to

App. 28

invalidate each other under the double patenting doc-

trine, if the patentee carefully abides by the Examiner’s

restriction requirement. Id.; Gerber Garment Tech., Inc. v.

Lectra Sys., Inc., 916 F.2d 683, 687-88 (Fed. Cir. 1990).

However, if the patentee amends its claims and crosses

“the line of demarcation between the ‘independent and

distinct inventions’ ” imposed by the Examiner’s restric-

tion requirement, “consonance” between the distinct

inventions is not maintained and the protection of Section

121 does not apply. Symbol Tech., 935 F.2d at 1579, quoting

Gerber Garment, 916 F.2d at 688.

The only double patenting issue disputed below was

where the line of demarcation was drawn in the PTO

restriction requirement between the claims of Groups I

and II on the one hand, and those of Group III on the

other. Op:22:10-16. The district court erred as a matter of

law in finding where the line of demarcation was drawn,

leading the district court to an erroneous finding that the

line had not been crossed and that 35 U.S.C. § 121 immu-

nized the ‘609 patent from double patenting.

Op:22:10-25:7.

The district court erroneously found that the Patent

Examiner drew the line of distinctness according to Pat-

ent Office classification. Op:23:11-15, 24:25-25:7. That is,

the district court concluded that the claims of Groups I

and II were drawn to inventions distinct from the inven-

tion of Group III because the claims fell into different

patent classes. Op:22:19-23, 23:11-15, 24:25-25:; A346

({ 11), A349 (¥ 11).

————— <<

App. 29

V. CONCLUSION

For the foregoing reasons, the district court’s deci-

sion that the ‘609 patent is not invalid for double patent-

ing or obviousness should be reversed. Likewise, the

district court’s decision that the Logar patent is infringed

under the doctrine of equivalents should also be

reversed, and the injunction should be vacated.

Oe Cet wh SE a 9 eth OT a tlre ot ae a

a teh nh eae” Ces de be

Respectfully submitted,

KNOBBE, MARTENS,

OLSON & BEAR

Dated: 10/21/94 By: /s/ Don W. Martens

Don W. Martens

Lowell Anderson

John B. Sganga, Jr.

Vito A. Canuso III

Attorneys for Appellants

APE Niet Cet GE Pd tS.

;

:

4

i

4

-

;

3

*

eI

App. 30

APPENDIX D

PETITION FOR REHEARING AND SUGGESTION

FOR REHEARING IN BANC OF

DEFENDANTS-APPELLANTS :

Pe ee ee ape te ee nT ee

IN THE

UNITED STATES COURT OF APPEALS

For THE FEepgERAL Circurr

Appeal Nos. 94-1428,94-1466

APPLIED MATERIALS, INC.,

Plaintiff/Cross-Appellant,

Vv.

ADVANCED SEMICONDUCTOR MATERIALS AMERICA, INC., and

EpsttoN TECHNOLOGY, INc., d/b/a/ ASM Eprraxy,

Defendants-Appellants,

and

ADVANCED SEMICONDUCTOR INTERNATIONAL, N.V.,

Defendant.

Appeal from Decisions of the United States

District Court for the Northern District

of California in C-91-20061

Entered July 15, 1994 and August 11, 1994

Judge William A. Ingram

App. 31

Of Counsel: Donatp R. DUNNER

Don W. Martens ALLEN M. SOKAL

LoweLL ANDERSON FINNEGAN, HENDERSON,

JoHN B. SGANGA, Jr. FaraBow, GARRETT &

Vitro A. Canuso III Dunner, L.L.P.

KNosBE, MARTENS, OLSON 1300 I Street, N.W.

& BEAR Washington, D.C. 20005

620 Newport Center Drive (202) 408-4000

16th Floor

Attorneys for Defendants-

Newport Beach, CA 92660 Appellants Advanced

(714) 760-0404 Semiconductor Materials

America, Inc., and Epsilon

Technology Inc., d/b/a ASM

Epitaxy

November 21, 1996

I. THE POINTS OF LAW OR FACT OVERLOOKED

OR MISAPPREHENDED BY THE PANEL MAJOR-

ITY

With all due respect, the panel majority’s opinion

flies in the face of the statute and clear congressional

intent. It creates uncertainty about the validity of poten-

tially thousands of divisional patents and confusion

about the law of double patenting by effectively overrul-

ing Gerber Garment Technology, Inc. v. Lectra Systems, Inc.,

916 F.2d 683, 16 USPQ2d 1436 (Fed. Cir. 1990) while

nevertheless purporting to follow it (“[T]he examiner’s

demarcation among the separate inventions should be

preserved.” Slip op. at 7.). Succinctly put, the panel

majority’s opinion undermines 35 U.S.C. § 121, confuses

the law of double patenting, and creates a huge loophole

in it.

App. 32

A. The Panel Majority Overlooked § 121’s

Requirement for Distinctness

More specifically, the panel majority overlooked that

the sine qua non of § 121 immunity from double patenting

is that the patentee must maintain the line of demarcation

that prompted the examiner to hold the inventions inde-

pendent and distinct. Here the patentee indisputably

crossed that line and rendered the divisional claims

obvious in view of the claims to the elected invention by

eliminating from the divisional claims the very limita-

tions that prompted the examiner to hold the claimed

inventions distinct and require restriction. Contrary to

Gerber Garment Technology and § 121’s requirement for

distinctness, the panel majority held that § 121’s immu-

nity applied simply because “the process claims remained

in separate patents from the apparatus claims although

the scope of the process claims was modified,” slip op. at

7, and possibly because “the PTO classification . . . was

unchanged,” slip op. at 6. Those reasons have never

before been sufficient without the statutorily required

finding of distinctness.

* * *

drawn to distinct inventions. See Section II, supra. Hence,

Chief Judge Archer, in his opinion in this case concurring

in part and dissenting in part, correctly observed that:

as Gerber and the language of § 121 instruct, the

issue is whether the inventions claimed remain

independent and distinct. As discussed above,

in this case the very reason the examiner said

the inventions were distinct — that the method

claims were drawn to epitaxial deposition — was

eliminated. The modification of the claims to

SS

App. 33

cover non-epitaxial deposition resulted in con-

sonance being lost.

Op. of Archer, C.J., at 9.

The majority opinion reasons that the purpose of

§ 121 is to protect the patentee who has been forced to file

a divisional application because the PTO has required

restriction. Slip op. at 7-8. The majority opinion over-

looks, however, the requirement that the patentee not

eliminate the examiner’s reason for the statutorily

required finding of distinctness. The examiner’s finding

may be wrong, and the patentee may therefore realize a

windfall in obtaining multiple patents and an extended

patent term for a single patentable invention, but the

price the patentee must pay for that windfall is to main-

tain the differences between the divided claims that led

the examiner to find distinct inventions. If the patentee

desires to eliminate those differences, thereby violating

consonance, it can either resubmit all claims in a single

application and see whether the PTO requires restriction

anew, or file a terminal disclaimer. Since Applied did

neither, the Court should have held that it discarded the

shield of § 121.

The panel majority’s decision thus abandons the safe-

guard against double patenting provided by the exam-

iner’s finding of distinctness under § 121. It also renders

futile the PTO’s repeated warnings to examiners that

because of § 121’s shield against double patenting, they

should never require restriction unless inventions are

truly distinct. For example, the MPEP cautions, “Where

inventions are related as

App. 34

* * *

examiner, since the claims have been changed in material

respects from the claims at the time the requirement was

made. . . . In order for consonance to exist, the line of

demarcation between the independent and distinct inven-

tions identified by the examiner in the requirement for

restriction must be maintained.” MPEP § 804.01 (citing

Gerber Garment Technology, Inc. v. Lectra Systems, Inc., 916

F.2d 683, 16 USPQ2d 1436 (Fed. Cir. 1990)). Applied mani-

festly changed the process claims in a material respect,

since it eliminated the very limitation that prompted the

examiner to hold the claimed inventions distinct, render-

ing them patentably indistinct.

IV. THE PANEL MAJORITY’S DECISION HAS FAR-

REACHING IMPLICATIONS

As Chief Judge Archer suggested, the decision in this

case has broad implications extending far beyond this

case. Most restriction requirements are between claims to

separate statutory classes of invention, such as apparatus

and process for operating it, or product and process for

making it, that the PTO has found distinct. Whenever the

patentee amends the resulting divisional application to

eliminate the reason the examiner found the inventions

distinct and maintains only the separate statutory classes

of invention in the separate patents, as Applied did in

this case, the holding in this case will control the out-

come, for the majority opinion states, “[C]onsonance was

not violated, for the process claims remained in separate

patents from the apparatus claims although the scope of

the process claims was modified.” Slip op. at 7. The

App. 35

majority opinion offers no reason for holding that

Applied maintained consonance other than the separate

patenting of apparatus and process claims. As Chief

Judge Archer observed, however, “This is not the proper

test and begs the very question we are to answer. Under

this analysis no patent could ever be

* * +

foreseeable future. The Court therefore should grant the

Petition for Rehearing and Suggestion for Rehearing in

Banc.

Date: November 21, 1996

Respectfully submitted,

/s/ Allen M. Sokal

Donald R. Dunner, Esq.

Allen M. Sokal, Esq.

Attorney for Defendants-

Appellants

Advanced Semiconductor

Materials

America, Inc., and Epsilon

Technology Inc., doing

business as ASM Epitaxy

Of Counsel:

Don W. Martens

Lowell Anderson

John B. Sganga, Jr.

Vito A. Canuso III

KNOBBE, MARTENS, OLSON & BEAR

620 Newport Center Drive, 16 Floor

Newport Beach, California 92660

(714) 760-0404

App. 36

APPENDIX E

Don W. Martens (Bar No. 35477)

James F. Lesniak (Bar No. 115889)

Frederick S. Berretta (Bar No. 144757)

KNOBBE, MARTENS, OLSON & BEAR, LLP :

i

620 Newport Center Drive

Sixteenth Floor

Newport Beach, CA 92660

(714) 760-0404

Edward F. Mullowney (Bar No. 151557) 4

Mark D. Rowland (Bar No. 157862) :

Vicki S. Veenker (Bar No. 158669) i

FISH & NEAVE

525 University Avenue, Suite 300

Palo Alto, CA 94301

(415) 617-4000

Richard J. Gray (Bar No. 113770)

Mark E. Waite (Bar No. 161367)

BERGESON, ELIOPOULOS, GRADY & GRAY

Ten Almaden Boulevard, Suite 200 ;

San Jose, CA 95113

(408) 291-6200

Attorneys for ADVANCED

SEMICONDUCTOR MATERIALS AMERICA, INC.

App. 37

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

- SAN JOSE DIVISION

APPLIED MATERIALS,

INC.,

Plaintiff,

V.

ADVANCED

SEMICONDUCTOR

MATERIALS AMERICA,

INC., EPSILON

TECHNOLOGY INC.,

doing business as ASM

EPITAXY, and

ADVANCED

SEMICONDUCTOR

MATERIALS

INTERNATIONAL N.V.,

Defendants.

AND RELATED ACTIONS

ee

Civil Action Nos.

C-91-20061 RMW

C-92-20643 RMW

C-95-20003 RMW

C-95-20586 RMW

ASMA’S MOTION TO

SET CLAIM

CONSTRUCTION

HEARING

Date: April 11, 1997

Time: 9:00 a.m.

Ctrm: 6

Honorable Ronald M.

Whyte

[CONFIDENTIAL - TO

BE FILED UNDER SEAL

PURSUANT TO THE

REVISED SECOND

AMENDED PROTECTIVE

ORDER ENTERED ON

SEPTEMBER 3, 1996 BY

JUDGE WHYTE]

*

Applied’s patents do not give it the right to make or

sell the Centura; they only confer the right to exclude

others from practicing the patented invention. King

Instruments Corp. v. Perego, 65 F.3d 941, 947 (Fed. Cir.

1995). Accordingly, it is axiomatic that a product embody-

ing one patent may nevertheless infringe another patent,

App. 38

and therefore cannot be lawfully made or sold absent the

consent of the owner of the other patent:

Two patents may both be valid when the second

is an improvement on the first, in which event,

if the second includes the first, neither of the

two patentees can lawfully use the invention

of the other without the other’s consent.

Cantrell v. Wallick, 117 U.S. 689, 694, 6 S. Ct. 970, 973

(1886) (emphasis added).

B. The Hypothetical Lost Profits Analysis Must Be

Performed Assuming A Market Free Of Infringe-

ment In Which Only Lawful Sales Are Made

The Federal Circuit has authorized use of the Panduit

four-factor test for a patent owner to prove entitlement to |

lost profits as a measure of damages. The Panduit test |

places the burden on the patent owner to establish: |

ee ee

(1) demand for the patented product; (2)

absence of acceptable non-infringing substi-

tutes; (3) manufacturing and marketing capa-

bility to exploit the demand; and (4) the

amount of the profit it would have made.

Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1545 (Fed. Cir.

1995) (citing Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 4

575 F.2d 1152, 1156 (6th Cir. 1978) (emphasis added)). A

predicate to proving the third prong of the Panduit test -

capability to exploit the demand - is that the patent

owner could have lawfully sold its product. Applied will :

be unable to sustain its burden on this prong of the test if

its Centura is found to infringe ASMA’s patents. If

Applied was not entitled to sell the infringing Centura in

App. 39

the first place, it should not be able to claim damages

based on lost sales of those infringing reactors.

In a number of contexts, the courts have held that the

hypothetical market considered for purposes of a lost

profits analysis must be infringement-free. In Bio-Rad Labs.,

Inc. v. Pharmacia, Inc., 1990 U.S. Dist. LEXIS 18512, *6-7

(N.D. Cal. Nov. 20, 1990) (J. Brennan), a patent infringe-

ment suit in which the patent owner’s product was

alleged to infringe the defendant’s patent, this Court

stated that:

* * *

For the foregoing reasons, ASMA respectfully

requests that the Court grant its Motion and set a claim

construction hearing and associated briefing schedule in

ASMA’s spider and ring cases, before the trial of the

damages cases commences.

Respectfully submitted,

KNOBBE, MARTENS,

OLSON & BEAR, LLP

Dated: February 13, 1997 By: /s/ John B. Sganga,

jr. /SLL

John B. Sganga, Jr.

Attorneys for ADVANCED

SEMICONDUCTOR

MATERIALS AMERICA,

INC.

App. 40

APPENDIX F

PROCEEDINGS

Mid-Year Meeting

SECTION OF PATENT, TRADE-MARK

AND COPYRIGHT LAW

AMERICAN BAR ASSOCIATION

Vol. I

March 8-10, 1951

Shoreham Hotel

Washington, D. C.

The MASTER REPORTING COMPANY, Inc.

Law Stenography ¢ Conventions e General Reporting

CHICAGO NEW YORK

540 NORTH MICHIGAN 51 MADISON AVENUE

AVENUE Murray Hill 3-6667

Superior 3266 WASHINGTON

CLEVELAND NATIONAL PRESS

STANDARD BUILDING BUILDING

Main 0894 National 8558

TABLE OF CONTENTS

Page

Thursday Morning Session

March 8, 1951

A consideration and discussion, section by sec-

tion of H.R. 9133, A Bill to revise and codify the

laws relating to patents and the Patent Office,

and to enact into law title 35 of the United States

Code entitled “Patents”.

ee

App. 41

MR. FEDERICO: “A patent issuing on an appli-

cation with respect to which a requirement for restriction

under this section has been made, or on an applica-

wen...”

MR. KLEIN: Then you see the objection is valid,

because there is nothing in that section; both of those

earlier classes then relate to a patent and do not bind the

Patent Office.

MR. FEDERICO: Let me say there has been a

good deal of dispute about this language. Read the can-

celled sentence: “If two or more patents are issued in

consequence of a requirement for restriction under this

section, neither patent may be used as a reference against

the other for the purposes of [p. 257] Sec. 103 of this

title.” That was written in reference to patents, with the

understanding that the statute said that a patent was

valid; obviously, the Office could not reject for the reason

that the statute said it was valid, that the application

would automatically take care of itself. The Coordinating

Committee was dissatisfied with the thought that the

Patent Office might have some sense now and then and

worked out this capitalized language to try to express the

idea that it could not be done either in the application

stage or in the patent stage.

The intention of everybody involved is that double

patenting is eliminated either in the application stage or

in the patent stage, and you might take that as the sense

of that section. Whether the cancelled sentence is too

cryptic and the other one perhaps too elaborate, in either

case that was the intention.