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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1997
- **Citation:** 520 U.S. 1230

## Text

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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0439%3A2. Public record. Not legal advice.