Case 6:20-cv-01212-ADA Document 19 Filed 04/02/21 Page 1 of 11
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`OCEAN SEMICONDUCTORS LLC,
`Plaintiff,
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`v.
`NXP SEMICONDUCTORS N.V., et al.,
`Defendants.
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`Civil Action No. 6:20-CV-1212-ADA
`JURY TRIAL DEMANDED
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`NXP USA, INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS
`FOR FAILURE TO STATE A CLAIM UNDER 35 U.S.C. § 271(g)
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`Case 6:20-cv-01212-ADA Document 19 Filed 04/02/21 Page 2 of 11
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`TABLE OF CONTENTS
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` I.
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`II.
`A.
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`INTRODUCTION............................................................................................................. 1
`ARGUMENT ..................................................................................................................... 1
`The Asserted Claims of the ’402 and ’538 Patents Do Not Create or Transform a
`Physical Product................................................................................................................ 3
`The Asserted Claims of the ’305 and ’248 Patents Do Not Create or Transform a
`Physical Product................................................................................................................ 5
`Ocean’s Claims Under § 271(g) Do Not Implicate Unresolved Fact Issues. ................ 6
`C.
`III. CONCLUSION ................................................................................................................. 8
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`B.
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`I.
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`INTRODUCTION
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`Ocean’s Opposition asks the Court to improperly expand the scope of 35 U.S.C. § 271(g).
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`It is not enough that a claimed process merely “involve,” or “relate” in some way to, product
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`manufacturing. Under Federal Circuit precedent, § 271(g) applies only when a patented process
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`creates or modifies a physical product. Accordingly, the claimed methods of the ’402, ’538, ’305,
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`and ’248 patents cannot be infringed under § 271(g). Those infringement claims should be
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`dismissed with prejudice.
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`II.
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`ARGUMENT
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`Federal Circuit precedent holds that § 271(g) requires that the claimed process itself
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`manufacture a physical product. Bayer AG v. Housey Pharms., Inc., 340 F.3d 1367, 1377 (Fed.
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`Cir. 2003) (“[F]or a product to have been ‘made by a process patented in the United States’ it must
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`have been a physical article that was ‘manufactured.’”); Momenta Pharms., Inc. v. Teva Pharms.
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`USA Inc., 809 F.3d 610, 615 (Fed. Cir. 2015) (§ 271(g) limited to “actual ‘ma[king]’ of a product”);
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`Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568, 1572 (Fed. Cir. 1996) (§ 271(g) concerns
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`“direct and unaltered products of patented processes”). The claimed process must create or
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`transform a physical product. Momenta, 809 F.3d at 616. In contrast, § 271(g) does not apply to
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`processes that may be related to manufacturing but are “too far removed from the actual making
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`of the product.” Id. at 617.
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`In asking this Court to adopt a standard exceeding Federal Circuit precedent, Ocean relies
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`on mischaracterized treatise language that cites dictum from a 1995 district court opinion. In
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`describing the potential connection between a product and a patented process as ranging from
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`“immediate” to “remote,” the Chisum treatise states the obvious. There can be different degrees of
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`connection between a patented process and a resulting product. Chisum does not, and could not,
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`alter Federal Circuit precedent.
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`Ocean’s reliance on a passage from the Eli Lily opinion is similarly misplaced. There, the
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`court noted that Congress chose not to add the term “directly” to § 271(g) because the statute
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`includes additional provisions that capture products made by a claimed process but altered in
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`immaterial ways post-manufacture. Eli Lilly, 82 F.3d at 1576. That opinion does not broaden
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`§ 271(g) to cover any process in any way connected to manufacturing without regard to whether
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`the claimed process creates or modifies a physical product.
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`The Federal Circuit standard is much narrower than what Ocean proposes. In Bayer, the
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`plaintiff alleged that the accused infringer used a claimed research process for identifying useful
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`drugs. 340 F.3d at 1377. The court held that because the research process was not “used in the
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`actual synthesis of the drug product,” the plaintiff could not state a claim under § 271(g). Id. at
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`1377–78. The court reached this conclusion even though the claimed research process identified
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`the product “to be manufactured” and was therefore connected to manufacturing. Id. Momenta is
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`similar. There, the plaintiff argued that methods for testing an intermediate substance in a process
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`for making a drug were “a crucial interim step used directly [to] manufacture” the accused product.
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`809 F.3d at 615. Nonetheless, the court held that “made” as used in § 271(g) “extends to the
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`creation or transformation of a product, such as by synthesizing, combining components, or giving
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`raw materials new properties.” Id. at 616. In other words, despite its connection to the relevant
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`manufacturing process, the claimed method did not qualify under § 271(g). Id. at 618. The claims
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`at issue here are no different.
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`A. The Asserted Claims of the ’402 and ’538 Patents Do Not Create or Transform a
`Physical Product.
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`Section 271(g) does not apply to the processes recited in the asserted claims of the ’402
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`and ’538 patents. Asserted claim 1 of the ’402 patent concerns fault detection. See Dkt. 15 at 3-4
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`(reciting the entirety of claim 1 of the ’402 patent).12 Asserted claim 1 of the ’538 patent claims a
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`process for detecting fault conditions during semiconductor manufacturing and adjusting the
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`weighting of fault-related parameters in the detection algorithm. See Dkt. 15 at 5 (reciting the
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`entirety of claim 1 of the ’538 patent).
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`Ocean leads its opposition by contending that a different defendant’s choice not to move
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`to dismiss Ocean’s § 271(g)-based infringement claim under the ’402 patent in a different case
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`determines the outcome here. Dkt. 18 at 3-4. It does not, of course.
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`That aside, Ocean’s arguments as to the ’402 and ’538 patents (and, for that matter, the
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`’305 and ’248 patents) are essentially identical – that § 271(g) requires only that the asserted claim
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`merely “relate[] to” (Dkt. 18 at 3, 4, 5) or “involve[]” (id. at 6) a manufacturing process that creates
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`or modifies a physical product. Ocean asserts that the process claimed in the ’402 patent can be
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`infringed based on § 271(g) because the process “relates” to manufacturing and is performed by
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`manufacturing equipment. Dkt. 18 at 3-6. For asserted claim 1 of the ’538 patent, Ocean argues
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`that § 271(g) applies because the claimed method “relates” to semiconductor wafer manufacturing
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`and refers to a product, namely, a semiconductor “workpiece” or “wafer.” Dkt. 18 at 7-9. But
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`1 Ocean’s assertion at Section III(B)(2) of its Opposition (Dkt. 18) that NXP deliberately omitted key elements of
`claim 1 of the ’538 patent is false. The entirety of claim 1 is recited at p. 5 of NXP’s motion. Ironically, Ocean
`incorrectly quotes claim 1 as including “workpiece comprises a semiconductor wafer”—that language appears in
`claim 2.
`2 By ignoring NXP’s answer and express denials, Ocean also incorrectly states at page 6 of its Opposition that
`“[t]here is no dispute that each limitation in claim 1 [of the ’402 patent] is practiced in the actual manufacture of
`NXP’s semiconductors.”
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`neither claim 1 of the’402 patent nor claim 1 of the ’538 patent creates or transforms a physical
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`product, as required by § 271(g).
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`Ocean contends that this case is distinguishable from Bayer because it alleges a physical
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`product is imported here, rather than just information. Dkt. 18 at 8. But that ignores the question
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`at the heart of § 271(g): is a physical product “made by” the claimed process? The answer is no,
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`and importing a product made by an unclaimed process into the U.S. cannot infringe § 271(g).
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`Indeed, Bayer also involved an imported product (a drug), but importation was irrelevant because
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`the product was not made using the claimed process. 340 F.3d at 1377–78. So it is here.
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`More importantly, Ocean’s assertion that a mere relationship to a manufacturing process
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`suffices under § 271(g) falls well short of the failed arguments in Bayer and Momenta. In Bayer,
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`the claimed process was more than simply related to a manufacturing process—it identified the
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`drug to be manufactured—and yet the Federal Circuit held that § 271(g) did not apply. In
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`Momenta, the claimed process was a “crucial interim step” related to a manufacturing process, and
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`the Federal Circuit still held that § 271(g) did not apply. Under Bayer and Momenta, a process
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`must create or transform a product to serve as the basis for infringement under § 271(g). A
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`relationship to manufacturing—even a crucial relationship—is not enough under § 271(g).
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`Ocean attempts to side-step the content of the asserted claims by noting that its Complaint
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`accuses tangible products of infringement. Dkt. 18 at 6. But such allegations are immaterial
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`because the accused products are not “made by” the claimed methods. Under applicable law, that
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`is fatal to Ocean’s infringement claim based on § 271(g).
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`Ocean also attempts to side-step the asserted claims by pointing to discussion in the
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`specifications of activities that occur either outside of or after the claimed processes. Dkt. 18 at 3-
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`4, 7-8. However, whether a product is “made by a process” is determined by the language of the
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`claims, not the specification.
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`Finally, as support for its argument that § 271(g) applies because a physical product is
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`made by manufacturing equipment involved in the claimed process, Ocean cites Bio-Technology
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`General Corp. v. Genentech, Inc., 80 F.3d 1553, 1561 (Fed. Cir. 1996). Dkt. 18 at 6. That case
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`supports NXP’s argument, not Ocean’s. In Bio-Tech., the Federal Circuit found that an accused
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`protein generated by a plasmid was “made by” a claimed method for creating the plasmid. 80 F.3d
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`at 1560–61. Unlike the circumstances here, Congress had addressed the claimed process in the
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`legislative history, and the claimed process generated a plasmid that directly created the protein.
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`Id. The claimed process resulted in the “actual synthesis” of the protein. See Bayer, 340 F.3d at
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`1377. There is no such tangible product that results from the claimed processes here, which
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`indisputably do not create a physical product.
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`B. The Asserted Claims of the ’305 and ’248 Patents Do Not Create or Transform a
`Physical Product.
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`The asserted claims of the ’305 and ’248 patents recite a scheduling method for a
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`manufacturing process where an action is scheduled in response to a detected event. Dkt. 15 at 5-
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`6. The method relates to manufacturing logistics, but it does not create or transform a tangible
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`product. Accordingly, § 271(g) does not apply.
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`Ocean disagrees by arguing that scheduling is “indispensable” to semiconductor
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`manufacturing. Dkt. 18 at 9. Even assuming that were true, the importance of scheduling does
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`not affect whether a product is “made by” the claimed process withing the meaning of § 271(g).
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`Again, Ocean’s rationale is no more compelling than Bayer’s indispensable identification of the
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`drug to be manufactured or Momenta’s “crucial interim step,” each of which was insufficient under
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`§ 271(g). Again, an important relationship to manufacturing is not enough under § 271(g). Under
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`Bayer and Momenta, a process must create or transform a product to serve as the basis for
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`infringement under § 271(g). The methods claimed in the ’305 and ’248 patents do not meet that
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`standard; they merely schedule actions.
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`As with the asserted fault detection patents, Ocean argues that the specification and other
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`claims mention, and generally relate to, manufacturing. Dkt. 18 at 9-11. But none of that changes
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`the scope of the asserted claims. Those claims recite processes that detect an event and respond
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`by scheduling an action. The steps do not make or alter a physical product—which is required for
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`§ 271(g) to apply. Simply put, the claimed processes are limited to scheduling. Try as Ocean
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`might to transform the claims, they do not require performing any actions that manufacture a
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`semiconductor device.
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`C. Ocean’s Claims Under § 271(g) Do Not Implicate Unresolved Fact Issues.
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`For the reasons described above, the asserted claims of the ’402, ’538, ’305, and ’248
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`patents do not satisfy the legal requirements of § 271(g) and related precedent. Ocean’s § 271(g)
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`infringement allegations under those patents fail as a matter of law and should be dismissed.
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`No fact issues preclude dismissal. Ocean initially argues that a product is “made by” a
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`patented process if that process is necessary to make the product “commercially viable”—an issue
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`that purportedly remains unsettled for the methods claimed in the ’402, ’538, ’305, and ’248
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`patents. Dkt. 18 at 11. That position is unsupported. Section 271(g) does not mention commercial
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`viability. Nor does Bayer or Momenta, even though the latter dealt with a method for testing
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`product quality. Instead, the threshold question for § 271(g) is whether a process creates or
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`transforms a tangible product. If not, the process cannot support an infringement claim under the
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`statute.
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`Ocean’s cited authority does not help it. Dkt. 18 at 11-12. None establishes that
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`commercial viability alone determines whether a product is “made by” a process, much less
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`addresses whether commercial viability can defeat a motion to dismiss. Instead, in addressing
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`§ 271(g) in the context of judgment as a matter of law, one decision cited by Ocean expressly states
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`that “the issue of commercial viability is not . . . dispositive.” Ormco Corp. v. Align Tech., Inc.,
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`653 F. Supp. 2d 1016, 1026–27 (C.D. Cal. 2009).
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`Ocean also argues that whether a claimed process is “sufficiently tied” to a product for
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`purposes of § 271(g) is a “fact question.” Dkt. 18 at 11. If that were true, courts would never grant
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`motions to dismiss based on § 271(g). But, of course, they do. For example, in Bayer the Federal
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`Circuit affirmed a district court’s dismissal of § 271(g) infringement claims. 340 F.3d at 1378.
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`Ocean completely misstates the holding of the single district court case it relies on for this
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`argument. That case relates to whether a product “made by” a patented process was materially
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`changed for purposes of § 271(g)(1), not to the threshold “made by” question. See Millennium
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`Cryogenic Techs., Ltd. v. Weatherford Artificial Lift Sys., No. H-12-0890, 2012 U.S. Dist. LEXIS
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`196638, at *8 (S.D. Tex. Sept. 5, 2012). In its Opposition (Dkt. 18 at 12), Ocean omitted the key
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`portion of the opinion:
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`[I]ssues regarding whether the refurbished stators are “made by” the
`patented process or constitute “materially changed” section
`271(g)(1) products are material fact issues that are, and should
`remain, within the province of the fact finder in this case.
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`Millennium, 2012 U.S. Dist. LEXIS 196638, at *8 (emphasis added). Millennium does not
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`at all state that whether a product is “made by” a patented process is a fact issue. The fact issue
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`identified by the Court was something different and narrower: whether a product known to be
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`made by a patented process was then materially changed such that § 271(g) would no longer apply,
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`as described in § 271(g)(1). The Millennium court’s citations following the quoted language above
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`make the issue before it unmistakably clear by observing that “‘whether a change in a product is
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`material is a factual determination, and is properly before the trier of fact.’” Millenium is therefore
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`inapposite; it concerns the “material change” exception to § 271(g), not the threshold legal issue
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`of whether the claimed method creates or modifies a physical product.
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`III.
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`CONCLUSION
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`NXP respectfully requests that the Court grant its partial motion to dismiss.
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`Case 6:20-cv-01212-ADA Document 19 Filed 04/02/21 Page 11 of 11
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`Dated: April 2, 2021
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`Respectfully submitted,
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` /s/ Bradley D. Coburn
`Barry K. Shelton
`Texas State Bar No. 24055029
`Bradley D. Coburn
`Texas State Bar No. 24036377
`SHELTON COBURN LLP
`311 RR 620, Suite 205
`Austin, TX 78734-4775
`bshelton@sheltoncoburn.com
`coburn@sheltoncoburn.com
`(512) 263-2165 (Telephone)
`(512) 263-2166 (Facsimile)
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`Attorneys for NXP
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the above and foregoing
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`document has been served on all counsel of record via the Court’s ECF system.
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` /s/ Bradley D. Coburn
`Bradley D. Coburn
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