Case 5:20-cv-05676-EJD Document 47 Filed 12/23/20 Page 1 of 13
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`APPLIED MATERIALS, INC.,
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`Plaintiff,
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`v.
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`Case No. 5:20-cv-05676-EJD
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`ORDER DENYING MOTION FOR
`PRELIMINARY INJUNCTION
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`DEMARAY LLC,
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`Re: Dkt. No. 14
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`Defendant.
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`Plaintiff Applied Materials, Inc. (“Applied”) initiated this lawsuit against Defendant
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`Demaray LLC (Demaray) seeking declaratory judgment of non-infringement of two of Demaray’s
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`patents—(i) U.S. Patent No. 7,544,276 (hereafter “276”) and (ii) U.S. Patent No. 7,3381,657
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`(hereafter “657”) (collectively the “Asserted Patents”). Now, before the Court is Applied’s
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`motion to enjoin Demaray from litigating certain patent claims in customer suits in the Western
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`District of Texas. Dkt. No. 14. Having considered the record, the parties’ submission, and the
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`relevant law, the Court finds that it does not have jurisdiction over Applied’s claims under the
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`Declaratory Judgment Act.1 The Court therefore DENIES Applied’s motion for preliminary
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`1 On October 16, 2020, Demaray filed “Demaray LLC’s Objection to Applied Materials’ Reply
`Evidence.” See Dkt. No. 29. Local Rule 7-3(d) prohibits a party from filing additional
`memoranda, papers, or letters once a reply is filed without court approval unless new evidence has
`been submitted in the reply. Civ. L.R. 7-3(d)(1). If new evidence is submitted with the reply, the
`party may file an objection to the reply evidence, “which may not exceed 5 pages of text, stating
`its objections to the new evidence, [and] which may not include further argument on the motion.”
`Id.
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`The Court has the discretion to consider new evidence presented on reply, particularly if the new
`evidence appears to be a reasonable response to the opposition. See Edgen Murray Corp. v.
`Vortex Marine Constr., Inc., No. 18-CV-01444-EDL, 2018 WL 4203801, at *3 (N.D. Cal. June
`27, 2018) (declining to strike reply declaration because the new evidence in the declaration was
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`injunction.
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`I.
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`BACKGROUND
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`The Asserted Patents claim a specific reactor configuration and method for the deposition
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`of thin layer films capable of being used during the fabrication of semiconductors. At several
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`points during the manufacturing of semiconductor devices, thin layer films composed of materials
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`including metals such as titanium and tantalum, are deposited onto different types of substrates in
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`a technique known as magnetron sputtering. Demaray’s patented method and reactor configuration
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`involves combining techniques known as bias pulsed DC (“BPDC”) sputtering, reactive magnetic
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`sputtering (“RMS”), and the incorporation of a narrow band rejection filter situated between a
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`reactor’s DC power source and the reactor’s target area. Applied develops and manufactures
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`technology and products used for semiconductor fabrication, including a line of reactors used for
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`magnetron sputtering. This declaratory judgment action stems from Demaray’s allegations that
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`Intel Corporation (“Intel”) and Samsung Electronics Co. Ltd. (“Samsung”), two of Applied’s
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`customers, have infringed Demaray’s 276 patent by configuring reactors, such as Applied’s
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`Endura product line reactors in an infringing manner. In addition, Demaray asserts that Intel and
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`Samsung have infringed Demaray’s 657 patent protecting a magnetron sputtering method used to
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`deposit thin film layers in the fabrication of some of their semiconductor products. See First
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`Amended Complaint for Declaratory Judgment (“FAC”), Dkt. No. 13 ¶ 1.
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`On July 14, 2020, Demaray filed separate actions in the Western District of Texas against
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`Intel, Civil Action No. 6:20-cv-634-ADA, and Samsung, Civil Action No. 6:20-cv-636-ADA.
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`(collectively “WDTX Actions”). See FAC ¶ 1; see also FAC, Ex. A, Dkt. No. 13-1, Demaray
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`LLC v. Intel Corp., (W.D. Tex. No. 6:20-cv-634-ADA filed July 14, 2020) (hereinafter, “Intel
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`Compl.”); FAC, Ex. B, Dkt. No. 13-2, Demaray v. Samsung Electronics Co., Ltd. (A Korean
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`Company) et al, (W.D. Tex. No. 6:20-cv-636-ADA filed July 14, 2020) (hereinafter, “Samsung
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`“filed to respond to Plaintiff’s opposition and is consistent with the evidence and arguments
`presented in the original motion”). The court exercises its discretion and considers Applied’s new
`evidence because it responds to Applied’s opposition and is consistent with the arguments and
`evidence presented in the moving papers.
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`Compl.”).2 In the WDTX Actions, Demaray cites materials from Applied’s website including a
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`brochure for the Endura product line, an article from the Nanochip Technical Journal discussing
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`reactive sputtering and tantalum deposition chambers, and a presentation on one of Applied’s
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`reactors, the Endura Cirrus HTX TiN System. Intel Compl. ¶ 25; Samsung Compl. ¶ 28. The
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`WDTX Actions do not name Applied as a defendant.
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`On August 30, 2020, Applied filed a declaratory judgement action against Demaray,
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`seeking a declaration that Applied’s products do not infringe the Asserted Patents. See Complaint,
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`Dkt. No. 1.; see also FAC ¶ 2. Additionally, Applied is seeking (1) a declaration that Applied’s
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`products do not infringe the Asserted Patents because the rights of a named inventor in the
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`Asserted Patents were assigned to Applied by his employment agreement with Applied; (2) a
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`declaration that Applied’s products do not infringe because Applied holds a license to the Asserted
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`Patents based on a license agreement between Applied’s affiliate and Demaray’s predecessor
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`company; or alternatively (3) a declaration that Applied’s products do not infringe because the
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`rights of one or more of the named inventors to the Asserted Patents were assigned to Applied’s
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`affiliate by their employment agreement, making the affiliate at least a co-owner of the Asserted
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`Patents. See FAC ¶ 2. On September 4, 2020, Applied filed its motion for preliminary injunction
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`to enjoin Demaray from proceeding with its Western District of Texas actions against Intel and
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`Samsung. Demaray has filed its opposition (“Opp.”), to which Applied has replied (“Reply”). See
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`Dkt. Nos. 23, 28.
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`II.
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`LEGAL STANDARDS
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`Because the Court’s jurisdiction in the instant matter is based on the United States Patent
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`Act, 28 U.S.C. § 1338, the Court applies the law of the United States Court of Appeals for the
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`Federal Circuit. See 28 U.S.C. § 1295(a)(1) (providing that the United States Court of Appeals for
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`2 A court may consider certain materials such as “documents attached to the complaint, documents
`incorporated by reference in the complaint, or matters of judicial notice.” United States v. Ritchie,
`342 F.3d 903, 908 (9th Cir. 2003). The Court will take judicial notice of the Western District of
`Texas complaints and publicly available docket entries in those cases. See id. (facts are judicially
`noticeable if they are “capable of accurate and ready determination by resort to sources whose
`accuracy cannot be reasonably questioned.”).
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`the Federal Circuit has exclusive jurisdiction over any appeal from a district court of the United
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`States “in any civil action arising under . . . any Act of Congress relating to patents. . . .”).
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`Furthermore, the Federal Circuit has held “that injunctions arbitrating between co-pending patent
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`declaratory judgment and infringement cases in different district courts are reviewed under the law
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`of the Federal Circuit.” Lab. Corp. of Am. Holdings v. Chiron Corp., 384 F.3d 1326, 1331 (Fed.
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`Cir. 2004).
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`III. DISCUSSSION
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`A. Applied Has Not Established the Existence of an “Actual Controversy” Between
`Applied and Demaray
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`As a threshold issue, “when ruling on a motion for a preliminary injunction, this Court
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`must consider whether it has subject matter jurisdiction. . . .” Native Fed’n of Madre De Dios
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`River & Tributaries v. Bozovich Timber Prod., Inc., 491 F. Supp. 2d 1174, 1180 (2007) (citing
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`U.S. Ass’n of Importers of Textiles and Apparel v. U.S. Dep’t of Commerce, 413 F.3d 1344, 1348
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`(Fed. Cir. 2005). In the instant case, Demaray argues that this Court lacks subject matter
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`jurisdiction over Applied’s claim for declaratory relief because (1) such relief may be awarded
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`only where there is a case or controversy and (2) based on the allegations in the FAC, there is no
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`case or controversy. Applied contends that there is an Article III case or controversy because (i)
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`Demaray “could just as easily have asserted a claim of direct infringement against [Applied],
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`based on the same underlying circumstances in the customer suit”, Microsoft Corp. v. GeoTag,
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`Inc., No. CV 11-175-RGA, 2014 WL 4312167, at *2 (D. Del. Aug. 29, 2014), and (ii) the very
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`nature of Demaray’s allegations against Samsung and Intel suggest that there is a “reasonable
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`potential that [sic] a claim [of induced or contributory infringement] could be brought” against
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`Applied. Microsoft Corp. v. DataTern, Inc., 755 F.3d 899, 904 (Fed. Cir. 2014).
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`i. Applied Has Failed to Allege that Demaray Engaged in Affirmative Acts
`Directed at Applied
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` The Declaratory Judgment Act allows potential infringers to bring claims against patent
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`holders, but only if there is an actual case or controversy between the parties. Matthews Int’l
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`Corp. v. Biosafe Eng’g, LLC, 695 F.3d 1322, 1327-28 (Fed. Cir. 2012). To satisfy Article III’s
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`standing requirements, a plaintiff must demonstrate that “the facts alleged, under all the
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`circumstances, show that there is a substantial controversy, between parties having adverse legal
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`interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
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`MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007), reversed-in-part on other grounds
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`by Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013). An “adverse
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`legal interest” requires a dispute as to a legal right—for example, an underlying legal cause of
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`action that the declaratory defendant could have brought or threatened to bring. See Arris Grp.,
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`Inc. v. British Telecommunications PLC, 639 F.3d 1368, 1374 (Fed. Cir. 2011).
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`The Federal Circuit has held that a declaratory judgment plaintiff must allege “(1) an
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`affirmative act by the patentee related to the enforcement of his patent rights, and (2) meaningful
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`preparation to conduct potentially infringing activity.” Matthews Int’l Corp., 695 F.3d at 1327.
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`To find an affirmative act, “more is required than ‘a communication from a patent owner to
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`another party merely, identifying its patent and the other party’s product line.’” 3M Co. v. Avery
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`Dennison Corp., 673 F.3d 1372, 1378-79 (Fed. Cir. 2012) (quoting Hewlett-Packard Co. v.
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`Acceleron LLC, 587 F.3d 1358, 1362 (Fed. Cir. 2009)). On the other end of the spectrum is an
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`explicit infringement allegation, which shows “‘there is, necessarily, a case or controversy
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`adequate to support declaratory judgment jurisdiction.’” See Hewlett-Packard Co., 587 F.3d at
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`1362 (quoting Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 96 (1993)). The factual
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`scenarios that fall in between require case-by-case analysis, and the objective actions of the
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`patentee are the subject of that inquiry. See 3M Co., 673 F.3d at 1379; Hewlett-Packard Co., 587
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`F.3d at 1363. The patentee need not explicitly threaten to sue or demand a license, but its actions
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`must give reason to believe that it is asserting its rights under the patents. See Hewlett-Packard
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`Co., 587 F.3d at 1362-63.
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`Here, Applied contends that Demaray’s own actions provide evidentiary support that a
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`controversy exists because Demaray previously offered Applied the opportunity to license the
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`Asserted Patents in 2015. Reply at 2; see also Supplemental Declaration of Boris Lubarasky
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`(“Lubarasky Decl.”), Ex. K, Dkt. No. 28-2. In analyzing affirmative acts, courts consider
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`numerous factors and look at the parties’ conduct and interactions as a whole. See ActiveVideo
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`Networks, Inc. v. Trans Video Elecs., Ltd., 975 F. Supp. 2d 1083, 1087–88 (N.D. Cal. 2013);
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`Akeena Solar, Inc. v. Zep Solar Inc., No. C-09-05040 JSW, 2010 WL 519838, at *4 (N.D. Cal.
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`Feb. 9, 2010). As is relevant here, courts consider the strength of language used in the parties’
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`communications, the extent of infringement analysis done by the patentee, whether the patentee
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`imposed a deadline to accept the license offer, the patentee’s history of enforcement, whether the
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`patentee has identified specific patents and products, and the time that has passed since the
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`infringement allegations. See ActiveVideo Networks, Inc., 975 F. Supp. 2d at 1087–88.
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`The facts put forth by Applied do not establish that there is a “substantial controversy”
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`between the parties that is “of sufficient immediacy and reality. . . .” See Medimmune, 549 U.S. at
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`127. In August 2015, Demaray informed Applied by email that it was offering a license to the
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`Asserted Patents as well as several other patents and technology. See Lubarasky Decl., Ex. K.
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`Demaray did not impose a deadline on Applied for a response to the license offer. Furthermore, in
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`the 2015 email, Demaray did not directly or implicitly suggest that any Applied products
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`infringed on Demaray’s patents nor did Demaray assert the patents as “relevant” to Applied’s
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`specific products. Cf. Hewlett-Packard Co., 587 F.3d at 1363 (finding under the totality of the
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`circumstances that, “it was not unreasonable for HP to interpret . . . letters as implicitly asserting
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`[patent] rights” where patentee in part asserted a patent as relevant to the other party’s specific
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`product line). There is no indication Demaray has ever made any infringement allegations against
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`Applied. Applied has also not presented evidence that it had any further interaction with Demaray
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`concerning patent licensing after 2015 or that Demaray attempted to assert its patent rights against
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`Applied in a different way. Given the general nature of the communication presented by Applied,
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`“the majority of the factors considered by courts weigh against finding standing” to seek
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`declaratory relief here. Cepheid v. Roche Molecular Sys., Inc., No. C-12-4411 EMC, 2013 WL
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`184125, at *11 (N.D. Cal. Jan. 17, 2013).
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`ii. There is Not an Actual Controversy Applied Might be Liable for Direct
`Infringement
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`Moreover, the WDTX Actions between Demaray and Applied’s customers, Intel and
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`Samsung, do not give rise to an actual controversy as to whether Applied might be liable for direct
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`patent infringement. Pursuant to § 271(a) of the Patent Act, “whoever without authority makes,
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`uses, offers to sell, or sells any patented invention, within the United States or imports into the
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`United States any patented invention during the term of the patent therefor, infringes the patent.”
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`35 U.S.C. § 271(a). In the WDTX Actions, Demaray has accused Applied’s customers, Intel and
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`Samsung, of directly infringing configuration and method claims of the Asserted Patents;
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`Demaray alleges that Intel and Samsung are in violation of § 271(a) of the Patent Act since each
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`has infringed and unless enjoined will continue to infringe patent claims by “making, using, or
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`offering to sell” the patented inventions at issue. Intel Compl. ¶¶ 22, 47; Samsung Compl. ¶¶ 25,
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`50.
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`More specifically, Demaray’s claims are predicated on Intel and Samsung “configur[ing]
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`RMS reactors, including, but not limited to reactors in the Endura product line from Applied
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`Materials, Inc. . . . for deposition of layers . . . in its semiconductor products.” Intel Compl. ¶ 25;
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`Samsung Compl. ¶ 28. In particular, Demaray alleges Intel and Samsung configure the reactors
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`such that they are comprised of a pulsed DC power supply coupled to the target area, a RF bias
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`power supply coupled to the substrate, and a narrow band rejection filter placed between the DC
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`power supply and the target area in order to deposit the thin layer films in its semiconductor
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`products. Intel Compl. ¶¶ 33, 36, 39; Samsung Compl. ¶¶ 36, 39, 42.
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`Applied argues that Demaray’s “exclusive identification” of its Endura reactors in the
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`WDTX Actions, and reliance on Applied’s publications, website, and screenshots of its reactors
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`created an implied assertion of infringement against Applied. See Reply at 3. Moreover, Applied
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`contends that because Demaray’s allegations concerning Intel’s and Samsung’s configurations
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`lack citation to any evidence revealing who performs the configuration, the implied assertion is
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`that Applied’s reactors necessarily or inherently feature these configurations. Id. at 3-4. Thus,
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`according to Applied, Demaray’s allegations establish a reasonable potential that Demaray could
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`bring direct infringement claims against Applied. The Court is not convinced.
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`The Applied publications Demaray references do not discuss the specific configuration or
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`method covered under Demaray’s Asserted Patents. See Intel Compl., Ex. No. 3-5; Samsung
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`Compl., Ex. No. 3-5. Instead, the Applied publications cover general information and features of
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`Applied’s reactors, and their ability to be utilized in the reactive sputtering process. For
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`Demaray’s accusations against Intel and Samsung to give rise to a declaratory judgment claim
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`regarding direct non-infringement of the Asserted Patents, the facts alleged in the complaints and
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`the documents referenced therein must imply that Applied itself may be liable for direct
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`infringement. Although Applied is a supplier of the reactors capable of this configuration and
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`deposition method, Demaray does not allege in the WDTX Actions that Applied itself configures
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`the reactors or promotes the patented configuration and method. See generally Intel Compl.;
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`Samsung Compl. Without more, Applied cannot be held liable for direct infringement. See
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`Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311 (Fed. Cir. 2006) (holding that “[m]ethod
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`claims are only infringed when the claimed process is performed, not by the sale of an apparatus
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`that is capable of infringing the use.”); see also Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 773
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`(Fed. Cir. 1993) (holding that “[t]he sale of [an apparatus capable of performing a claimed process
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`is] not a direct infringement because a method or process claim is directly infringed only when the
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`process is performed”). Accordingly, Applied has failed to allege an actual controversy with
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`respect to direct infringement of Demaray’s patents. See MedImmune, Inc., 549 U.S. at 127.
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`iii. There is Not an Actual Controversy Applied Might be Liable for Indirect
`Infringement
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`“Where a patent holder accuses customers of direct infringement based on the sale or use
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`of a supplier’s equipment, the supplier has standing to commence a declaratory judgment action if
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`(a) the supplier is obligated to indemnify its customers from infringement liability, or (b) there is a
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`controversy between the patentee and the supplier as to the supplier’s liability for induced or
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`contributory infringement based on the alleged acts of direct infringement by its customers.” Arris
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`Group, Inc., 639 F.3d at 1375. In the instant case, (a) is not applicable. There is nothing in the
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`record before the Court to suggest that Applied has indemnification agreements with its customers
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`or that indemnification would otherwise be required as a matter of law. See Activevideo Networks,
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`Inc., 975 F. Supp. at 1095 (asking whether there is an obligation to indemnify – e.g., under a
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`contract or as a matter of law); see also, e.g., Proofpoint, Inc. v. InNova Patent Licensing, LLC,
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`No. 5:11-CV-02288-LHK, 2011 WL 4915847, at *5 (N.D. Cal. Oct. 17, 2011) (stating that
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`“Proofpoint has not alleged the existence of a valid [indemnification] agreement nor described its
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`supposed obligations; it has simply indicated that the Texas Action [against its customers] has
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`spawned indemnity ‘requests’ ” but, “[w]ithout more, allegations of indemnity requests are not
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`enough to find a ‘substantial controversy . . . of sufficient immediacy and reality’”).
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`Because (a) does not apply, the Court must determine whether there is a controversy
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`between Applied and Demaray as to Applied’s liability for indirect infringement based on the
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`alleged acts of direct infringement by its customers. Here, the Court must bear in mind that
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`Applied does not have to definitively show that it is liable for indirect infringement. See Arris
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`Group, Inc., 639 F.3d at 1380 (rejecting declaratory judgment defendant’s argument that the
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`declaratory judgment plaintiff has the burden of presenting evidence that its actions indirectly
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`infringe; “the very purpose for an accused infringer to bring a declaratory judgment action is to
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`seek a judicial determination that a coercive claim by the patent holder would not succeed on the
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`merits”) (emphasis omitted). However, Applied must show that there is “at least a reasonable
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`potential that . . . a claim [for indirect infringement] could be brought.” Microsoft Corp., 755 F.3d
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`at 904-05 (emphasis added).
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`Contributory infringement under 35 U.S.C. § 271(c) occurs if a party sells or offers to sell
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`a material or apparatus for use in practicing a patented process, and that “material or apparatus” is
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`material to practicing the invention, has no substantial non-infringing uses, and is known by the
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`party “to be especially made or especially adapted for use in an infringement of such a patent.”
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`See In re Bill of Lading Transmission and Processing Sys. Patent Litig., 681 F.3d 1323, 1337
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`(Fed. Cir. 2012). Induced infringement, on the other hand, requires a showing that the alleged
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`infringer knowingly induced infringement and possessed specific intent to encourage another’s
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`infringement. 35 U.S.C. § 271(b); see DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed.
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`Cir. 2006). Demaray argues that Applied has not alleged that it supplies the “necessary
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`components” for infringement such as reactors with, for example, a narrow band-rejection filter.
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`Opp. at 8. Demaray also contends that Applied has not sufficiently pled any facts suggesting its
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`reactors have no substantial non-infringing uses or that Applied could be found to induce
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`infringement. Id.
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`Conversely, Applied contends that the factual allegations in Demaray’s WDTX Actions
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`establish a reasonable potential Demaray could bring claims of indirect infringement against
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`Applied. First, Applied argues that Demaray’s extensive reliance on Applied’s Endura reactors
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`and Applied’s product materials, website, and literature to support its actions against Intel and
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`Samsung implies that its products are being used as a material part in the customer’s infringing
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`activity. See Reply at 6. Applied also contends that since Demaray has brought suit against Intel
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`and Samsung, two of the world’s biggest chipmakers and two companies described as Applied’s
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`biggest customers, any alleged non-infringing uses of Applied’s products outside the way the
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`products are used by Samsung and Intel are not intended uses and in some instances can also result
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`in damage to features of Applied’s products. Id. Thus, according to Applied, there is a reasonable
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`potential that Demaray could assert the allegedly infringing configuration and method are the
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`primary and substantial use. Id. Additionally, Applied argues that allegations claiming it provides
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`its customers with “application-specific process kits” that allow users to modify the reactors to fit
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`their needs, raise the reasonable potential that Demaray could in turn bring claims for induced
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`infringement against Applied.
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`However, the WDTX Actions and other record evidence do not establish a reasonable
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`potential that Demaray could raise an indirect infringement claim against Applied. In Arris Group
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`Inc. v. British Telecommunications PLC, the manufacturer and supplier of equipment used in
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`Voice over Internet Protocol (VoIP) telephone services, sued British Telecommunications (“BT”)
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`following BT’s accusation that the supplier’s customer (a telecommunications network provider)
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`infringed BT’s patents. Although BT never explicitly accused the supplier of infringement, the
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`supplier’s products were central to BT’s infringement contentions. Arris Group, Inc., 639 F.3d at
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`1377. The court found that BT had accused Arris’ customer Cable One of direct infringement of
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`various system and method claims. The court then provided a detailed analysis of BT’s 118–page
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`presentation of its infringement contentions, pointing to the many instances of how BT singled out
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`Arris’ products used in Cable One's network, including multiple claim tables purporting to match
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`components of Cable One’s network to elements of the system/method claims of the patents-in-
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`suit. The court emphasized that on 26 of those 118 pages, Arris was specifically referenced by
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`name, or its products were identified by brand name and model, or its product literature was
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`copied from its website for illustrative effect. Id. at 1376–77. The court emphasized that BT’s
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`presentation made clear that Cable One’s use of specific Arris products was central to BT’s
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`infringement contentions, and that for many of the claims, BT asserted that virtually all the
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`claimed system’s elements or method steps were practiced by the specific Arris products used in
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`Cable One’s network. Id. at 1377–78.
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`Here, there is no evidence apparent to the Court that Demaray provides a lengthy
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`presentation of infringement contentions in the WDTX Actions that use of Applied’s reactors is
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`central to Demaray’s infringement claims against Intel and Samsung. As discussed above, it is
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`true that Demaray referred to Applied’s Endura reactors and publications wherein the capabilities
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`of Applied’s reactors were discussed. However, the Applied publications cover general
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`information and features of Applied’s reactors and their reactive magnetron sputtering capabilities
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`including the deposition of tantalum (TaN) and titanium (TiN) layers. See Intel Compl., Ex. No.
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`3-5; Samsung Compl., Ex. No. 3-5. Thus, at this stage in the litigation, the Court sees no way to
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`tell definitively whether the references to Applied’s Endura reactors are intended as required parts
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`of the accused configurations and methods, or whether they are simply offered as illustrations or
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`as part of the background of the accused reactor configuration and method.
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`Furthermore, contrary to Applied’s contention, the allegations in Demaray’s customer
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`actions do not imply that any non-infringing use of Applied products outside the way the products
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`are used by Intel and Samsung are not intended uses. Demaray’s claims focus on one
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`configuration and one method able to be performed on reactors like those manufactured by
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`Applied. The claims do not speak to the reactors themselves or many other non-infringing uses
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`described in Applied’s publications. See generally Intel Compl.; Samsung Compl. As Applied
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`has not alleged its reactors could not be used without infringing the Asserted Patents, there is no
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`indication that Applied contributed to the alleged infringement by its customers. See Ours Tech.,
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`Inc. v. Data Drive Thru, Inc., 645 F. Supp. 2d 830, 839 (N.D. Cal. 2009) (“The Federal Circuit
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`held there was no indication that Microchip had contributed to or induced infringement by its
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`customers, because there was no evidence that Microchip’s technology could not be used without
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`infringing Chamberlain’s patent or that Microchip had the required level of intent to cause and
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`encourage the alleged infringement.”) (citing Microchip Tech. Inc. v. Chamberlain Grp., Inc., 441
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`F.3d 936, 944 (Fed. Cir. 2006)).
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`Moreover, the “application-specific process kits” that Applied provides its customer with
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`do not suggest that Applied had the requisite knowledge or intent for indirect infringement. Id.
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`Demaray refers to the process kits when discussing how reactors, such as Applied’s Endura
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`reactors, can be modified to allow for the deposition of specific material layers including TaN
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`barrier layers and TiN hardmask layers. See Intel Compl. ¶ 25, Samsung Compl. ¶ 28. There is
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`no allegation made in the WDTX Actions that suggest the “application-specific process kits” also
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`concern the configuration and method claims related to Demaray’s Asserted Patents. Thus, on
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`these facts, the Court cannot find that there is a “controversy between the patentee and the supplier
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`as to the supplier’s liability for induced . . . infringement.” Arris Group, Inc., 639 F.3d at 1375.
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`Despite Demaray’s WDTX Actions and the evidence put forth by Applied, Demaray’s
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`alleged actions are not indicative of “adverse legal interests” as to Applied. See MedImmune, Inc.,
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`549 U.S. at 127. Applied has not shown that a “substantial controversy” that is “of sufficient
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`immediacy and reality” exists between itself and Demaray. Id.
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`IV. CONCLUSION
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`For the forgoing reasons, the Court does not have subject matter jurisdiction over
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`Applied’s action for declaratory relief. Thus, the Court DENIES Applied’s motion to enjoin the
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`Western District of Texas Actions.
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`Case 5:20-cv-05676-EJD Document 47 Filed 12/23/20 Page 13 of 13
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`IT IS SO ORDERED.
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`Dated: December 23, 2020
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`______________________________________
`EDWARD J. DAVILA
`United States District Judge
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