Apple Computer Inc. v. Burst.com, Inc.

Filing 157

Declaration of Nicholas A. Brown in Support of 156 Reply Memorandum filed byApple Inc.. (Attachments: # 1 Exhibit A part 1# 2 Exhibit A part 2# 3 Exhibit A part 3# 4 Exhibit A part 4# 5 Exhibit A part 5# 6 Exhibit B part 1# 7 Exhibit B part 2# 8 Exhibit B part 3# 9 Exhibit C# 10 Exhibit D# 11 Exhibit E# 12 Exhibit F# 13 Exhibit G# 14 Exhibit H# 15 Exhibit I# 16 Exhibit J# 17 Exhibit K# 18 Exhibit L# 19 Exhibit M# 20 Exhibit N# 21 Exhibit O)(Related document(s) 156 ) (Brown, Nicholas) (Filed on 9/6/2007) Modified on 9/18/2007 (gba, COURT STAFF).

Apple Computer Inc. v. Burst.com, Inc.

Doc. 157 Att. 20

Exhibit N

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Semiconductor Energy Laboratory Co. Ltd. v. Chi Mei Optoelectronics Corp. N.D.Cal.,2007. Only the Westlaw citation is currently available. United States District Court,N.D. California. SEMICONDUCTOR ENERGY LABORATORY COMPANY LTD., Plaintiff, v. CHI MEI OPTOELECTRONICS CORP., et al., Defendant(s). No. C 04-04675 MHP. June 19, 2007. Barbara S. Steiner , Donald R. Harris , John E. Titus , Joseph F. Marinelli , Joseph Albert Saltiel , Matthew J. Thomas , Patrick L. Patras , Reginald J. Hill , Stanley A. Schlitter , Stephen M. Geissler , Terrence Joseph Truax , Jenner & Block LLP, Chicago, IL, Victoria F. Maroulis , Quinn Emanuel Urquhart Oliver & Hedges LLP, Redwood Shores, CA, R. Tulloss Delk , Quinn Emanuel Urquhart Oliver & Hedges LLP, San Francisco, CA, for Plaintiff. Teresa M. Corbin , Daniel X. Yan , Howrey LLP, San Francisco, CA, Benjamin Charles Deming , Christopher Anthony Mathews , Howrey LLP, Los Angeles, CA, Ryan Edward Lindsey , Yuri Mikulka , Howrey LLP, Gregory Stuart Cordrey , Irvine, CA, Robert Unikel , Howrey LLP, Chicago, IL, for Defendant(s). MEMORANDUM & ORDER Re: Motions for Summary Judgment MARILYN HALL PATEL , United States District Judge. *1 Plaintiff Semiconductor Energy Laboratory Company Ltd. ("SEL") brought this patent infringement action against defendant Chi Mei Optoelectronics Corp. ("CMO") et al., alleging infringement of four United States patents related generally to the design and manufacture of liquid crystal display ("LCD") devices. Two patents in suit currently remain. Now before the court are the parties' motions for summary judgment. Having considered the

parties' arguments and submissions, and for the reasons set forth below, the court enters the following memorandum and order. BACKGROUND An overview of the relevant technology and summaries of the asserted patents are provided in this court's Claim Construction Order. Docket Entry 111 at 1-6 (hereinafter "Claim Construction Order"). SEL filed this action on November 3, 2004, alleging that CMO had infringed and was infringing various patents. On August 11, 2006 the parties filed a stipulation dismissing with prejudice all claims regarding U.S. Patent No. 5,995,189 . April 19, 2007 this court entered an order granting summary judgment of noninfringement of U.S. Patent No. 4,691,995 ("the 995 patent") . Docket Entry 331 (hereinafter "Summary Judgment Order"). All claims and defenses with respect to the 995 patent were subsequently dismissed by stipulation. Docket Entry 357. Accordingly, two patents-in-suit currently remain: U.S. Patent No. 6,756,258 ("the 258 patent") and U.S. Patent No. 6,404,480 ("the 480 patent") . The asserted claims of the 258 patent cover methods of fabricating thin-film transistors ("TFTs") for use in LCDs. In particular, the TFTs claimed by the 480 patent include a "stepped" structure whereby the upper surface of the second semiconductor layer is exposed. The 480 patent claims an active matrix display device providing a way of reliably creating an electrical connection between the substrates comprising the LCD. SEL now moves for summary judgment on its claim of infringement of the 480 patent and CMO's affirmative defenses of inequitable conduct, laches and patent misuse. CMO moves for summary judgment of noninfringement and invalidity of the 258 patent , noninfringement and invalidity of the 995 patent , no liability for foreign sales and no liability for infringement prior to the receipt of statutory notice of infringement. The parties have additionally cross-moved for summary judgment as to CMO's license defense. Because the 995 patent is no longer

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at issue in this case, the court will not reach the parties' arguments in these motions regarding the 995 patent. LEGAL STANDARD Summary judgment is proper when the pleadings, discovery and affidavits show that there is "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc. ., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. The party moving for summary judgment bears the burden of identifying those portions of the pleadings, discovery, and affidavits that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Cattrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On an issue for which the opposing party will have the burden of proof at trial, the moving party need only point out "that there is an absence of evidence to support the nonmoving party's case." Id. *2 Once the moving party meets its initial burden, the nonmoving party must go beyond the pleadings and, by its own affidavits or discovery, "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). Mere allegations or denials do not defeat a moving party's allegations. Id.; Gasaway v. Northwestern Mut. Life Ins. Co., 26 F.3d 957, 960 (9th Cir.1994). The court may not make credibility determinations, and inferences to be drawn from the facts must be viewed in the light most favorable to the party opposing the motion. Masson v. New Yorker Magazine, 501 U.S. 496, 520, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991); Anderson, 477 U.S. at 249. The moving party may "move with or without supporting affidavits for a summary judgment in the party's favor upon all or any part thereof." Fed.R.Civ.P. 56(a). "Supporting and opposing affi-

davits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e). DISCUSSION I. SEL's Motions A. Infringement of the 480 Patent The parties' arguments regarding infringement of the 480 patent are substantively identical to the arguments raised regarding CMO's previous motion for summary judgment. In essence, SEL asserts that it has made a prima facie case for infringement, and that CMO's only defense against infringement is its contention that the claim term "second interlayer insulating film" must be construed as requiring a planar surface. Because CMO's products are intentionally non-planar, CMO argues, CMO's devices cannot infringe. CMO does not appear to contest this characterization of its position or otherwise offer any argument against infringement other than its argument based on the planarity of the dielectric FN1 film. CMO does raise a separate argument asserting SEL's inability to show infringement based on foreign sales, which will be addressed in the section on defendant's foreign sales motion below. FN1. CMO has filed a request for leave to file a supplemental opposition to SEL's motion for summary judgment in order to set forth an entirely new non-infringement argument. CMO's request is denied. This court previously held that "the asserted claims of the 480 Patent cover nonuniform second interlayer dielectric films in the common contact portion of the matrix." Summary Judgment Order at 22. This order was issued after the initial briefing on the instant motions. Because the court has previously resolved this issue in favor of SEL, SEL is entitled to summary judgment of infringement as to the 480 patent subject to the court's holdings regarding foreign sales set forth below.

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B. Inequitable Conduct Inequitable conduct consists of (1) affirmative misrepresentations of material fact, (2) submission of false material information, or (3) the failure to disclose known material information during the prosecution of a patent, coupled with the intent to deceive the PTO. Life Techs., Inc. v. Clontech Labs., Inc., 224 F.3d 1320, 1324 (Fed.Cir.2000). "Materiality and intent to deceive are distinct factual inquiries, and each must be shown by clear and convincing evidence." Id. CMO has raised inequitable conduct as an affirmative defense as to the 480 patent and the 258 patent. SEL now moves for summary judgment as to both patents. 1. The 480 Patent *3 CMO's theory of inequitable conduct with respect to the 480 patent is that SEL created fictional prior art and failed to cite actual prior art that would have revealed the falsity of SEL's purported prior art. a. Material Misrepresentation or Omission Omitted prior art is material if "there is a substantial likelihood that a reasonable Examiner would have considered the information important in deciding whether to allow the application to issue as a patent." Life Techs., 224 F.3d at 1325. CMO must demonstrate materiality both as to the purported falsity of the admitted prior art, labeled as "Figure 13" in the 480 patent, and the actual prior art references that SEL allegedly withheld from the PTO. i. Figure 13 Figure 13 of the 480 patent is a diagram labeled "Prior Art" showing a large conductive spacer in the opening of a second insulating film. As this court noted in its Claim Construction Order, the location of the conductive spacer was a critical issue in the 480 patent: The 480 patent provides a way of reliably creating an electrical connection from the TFT substrate to the opposing substrate while maintaining a uniform gap between the substrates. One obstacle to achiev-

ing a uniform gap in the prior art is variation in thickness of the insulating-or "dielectric"-layer deposited just beneath the electrodes on the TFT substrate. In prior art displays, the metal contact for the electrical connection to the counter substrate was located on a layer below the level of the dielectric. Thus, the conductive spacer had to be of a size roughly equal to the thickness of the dielectric layer plus the width of the gap between the substrates in order to make electrical contact with both substrates. Because it is difficult to control the thickness of the dielectric layer from panel to panel, and even within a single panel, it was difficult to create spacers of the correct size. The improvement of the 480 patent is to locate the metal contact for the electrical connection on top of the dielectric layer, eliminating the relationship between the thickness of the dielectric and the size of the conductive spacers. Claim Construction Order at 4-5 (emphasis in original, citations omitted). CMO claims that SEL devised a prior art contact structure that would make SEL's claimed structure appear novel, but that the actual prior art did not contain the defect purportedly addressed by the 480 patent. Figure 13 is clearly material in light of the fact that the location of the conductive spacer has been identified as the innovation of the 480 patent. The materiality of Figure 13 does not end the inquiry, however, as the court must determine whether SEL has adduced sufficient evidence that the inclusion of Figure 13 was in fact a misrepresentation. In support of its claim that Figure 13 is a fabrication, CMO asserts that no SEL witnesses, including the inventors, could recall or identify any device (other than an unspecified SEL device), patent, patent application, text, article or publication with the structure disclosed in Figure 13. Unikel Opp. Dec., Exh. 2, Yamazaki Dep. at 250:19-259:17, 244:2-245:13; Unikel Opp. Dec., Exh. 4, Hirakata Dep. at 43:19-44:2. Additionally, the SEL employee who drew Figure 13 could not provide any information as to what she looked at to draw the figure or any other basis for her understanding of the prior art structure. Unikel Opp.

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Dec., Exh. 5, Sato Dep. at 91:9-96:6. The attorney who prosecuted the 480 patent likewise had no information as to whether the Figure 13 prior art drawing was accurate. Unikel Opp. Dec., Exh. 6, Robinson Dep. at 71:8-73:3. Finally, SEL has produced no prior art device or publication through discovery in this action which is consistent with the structure shown in Figure 13. *4 In response, SEL claims that Figure 13 was developed based on SEL's own designs and products, and that SEL's failure to provide the exact models does not support CMO's contention that Figure 13 was a fabrication. One inventor testified that he was familiar with a device that was consistent with Figure 13, and that "at SEL panels with similar structures were being made" in 1996 and 1997. Unikel Opp. Dec., Exh. 4, Hirakata Dep. at 43:19-44:2. The other inventor likewise testified that the structure disclosed in Figure 13 was one of the configurations that SEL was using in 1997. Unikel Opp. Dec., Exh. 2, Yamazaki Dep. at 257:24-258:19. Additionally, SEL claims that CMO's own invalidity contentions disclose a prior art reference, U.S. Patent No. 6,219,124, which was cited by the examiner during the prosecution of the 480 patent, as disclosing all claim elements except for a conductive spacer placed on top of an insulating film. Schlitter Rep. Dec., Exh. 6 at Exh. B3. Finally, CMO's expert does not corroborate CMO's argument regarding the falsity of Figure 13. Schlitter Rep. Dec., Exh. 1, Mossinghoff Dep. at 97:21-25 (stating that he had no information that any misrepresentations, as opposed to omissions, were made in connection with the prosecution of the patentsin-suit). Taken together, this evidence at least creates a genuine issue of material fact as to whether Figure 13 was based on actual products with which the inventors of the 480 patent were familiar, rather than a complete fabrication intended to mislead the PTO. ii. Prior Art Publications CMO relies on three publications in support of its

inequitable conduct claim regarding the 480 patent: U.S. Patent No. 5,757,456 ("the 456 patent"), Japanese Patent Publication 06-289415 ("the 415 publication"), and Japanese Patent Publication H06-186579 ("the 579 publication"). According to CMO, these references each disclose conductive spacers placed on top of an insulating film rather than in the holes of the film. This court discussed the 456 patent and the 415 publication at length in its Summary Judgment Order. With respect to the 415 publication, the court held that this reference disclosed conductive spacers held over a second interlayer insulating film, but that the reference did not disclose a "plurality" of such spacers. Summary Judgment Order at 25-27. The court likewise held that the 456 patent does not disclose a plurality of conductive spacers, but made no specific holding as to the location of the conductive spacers that were present. Id. at 32-33. Because SEL did not contest that particular limitation in the prior summary judgment proceedings, however, SEL has waived its objections to CMO's contention that the 456 patent discloses conductive spacers held over a second interlayer insulating film. SEL nonetheless claims that the 456 patent is cumulative to Figure 13, and therefore immaterial as a matter of law. See Mentor H/S, Inc. v. Med. Device Alliance, Inc., 244 F.3d 1365, 1378 (Fed.Cir.2001) (holding that "disclosures are not material if they are merely cumulative of references that were already before the examiner"). A reference is cumulative if it "teaches no more than what a reasonable examiner would consider to be taught by the prior art already before the PTO." Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1575 (Fed.Cir.1997). SEL's contention regarding Figure 13 is that it fails to disclose (1) a second interlayer insulating film provided on said first conductive film, said second interlayer insulating film having at least two openings; and (2) a plurality of conductive spacers held between said first substrate and said second substrate. Because these two limitations are likewise absent in the 456 reference, SEL argues, the 456 reference is cumulative of the dis-

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closed prior art. However, the 456 reference also discloses conductive spacers held over a second interlayer insulating film, as noted above. This is an additional critical limitation missing from Figure 13. Accordingly, the 456 patent is not cumulative of Figure 13, and SEL has not shown that the 456 patent is immaterial as a matter of law. *5 SEL likewise argues that the 579 publication is cumulative of Figure 13 because it is "substantively identical" to the 415 publication. SEL again argues that the reference is cumulative because it does not disclose a plurality if conductive spacers. To the extent that the reference discloses conductive spacers held over the second interlayer insulating surface, however, the 579 reference contains a critical limitation absent from Figure 13 and is therefore not immaterial as a matter of law. b. Intent SEL does not challenge the sufficiency of CMO's evidence related to intent to deceive with respect to the 456 patent or the 579 publication. Accordingly, SEL is not entitled to summary judgment on that basis. SEL does, however, assert that CMO has provided insufficient evidence of intent to deceive regarding the 415 publication. Specifically, SEL argues that no one having a duty to disclose prior art to the PTO in connection with the prosecution of the 480 patent was aware of the 415 publication during the prosecution. In light of the intent requirement, there can be no duty to disclose an unknown prior art reference. See FMC Corp. v. Manitowoc Co., 835 F.2d 1411, 1415 (Fed.Cir.1987). As SEL points out, CMO's only evidence of knowledge with respect to the 415 publication is the fact that it was cited by Yamazaki and Hirakata, the two inventors of the 480 patent, during the prosecution of U.S. Patent No. 6,703,643. SEL claims that SEL did not become aware of this reference until the Japanese Patent Office cited it on December 24, 2002, more than six months after the 480 patent issued. Schlitter Dec., Exh. 23. CMO responds to this argument in a footnote, acknowledging the facts of SEL's temporal ar-

gument but claiming that the citation in the 643 patent proves that Yamazaki and Hirakata knew of the 415 publication at some point in time prior to then. CMO then cites the similarities between the 415 publication and the 579 publication, which was admittedly known to SEL during the 480 prosecution, and argues that a material issue of fact exists as to whether someone involved in the 480 prosecution knew of the 415 publication during that time. While CMO's argument regarding the 415 publication is somewhat weak, inequitable conduct may be shown by circumstantial evidence. In light of the additional factual issues regarding the remaining publications, therefore, the parties would be best served by having the jury consider evidence related to the 415 publication as well. In sum, SEL is not entitled to summary judgment on CMO's inequitable conduct defense regarding the 480 patent. 2. The 258 Patent A critical element of the asserted claims of the 258 patent is the step of "etching the exposed portion of the second semiconductor film to form source and drain regions wherein a channel forming region is formed in said first semiconductor film between said source and drain regions." CMO asserts that SEL misrepresented the state of the prior art concerning "overetching" when prosecuting the 258 patent, and withheld material prior art that would have revealed the true state of the art. a. Overetching *6 In rejecting the claims of the 258 patent, the examiner stated that the claims were not patentably distinct from the claims of U.S. Patent No. 6,124,155 ("the 155 patent"), also owned by SEL, and that "it is well known to overetch to expose the source and drain regions of the TFT device." Unikel Dec., Exh. 14 at 3. In response, SEL and Yamazaki requested that the examiner cite references in support of the latter position, and stated that "overetching to expose the source and drain regions of the TFT device is not conventional and would not have been known to one with ordinary

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skill in the art at the time of invention." Id. at Response page 2. CMO argues that this assertion was knowingly false, citing the following evidence. SEL's Local Patent Rule 4.2 Statement in this action indicates that "overetching [wa]s normally a part of every etching process" at the time the 258 patent was filed. Joint Statement of Undisputed Facts ("JSUF") ¶¶ 59-60. Additionally, Yamazaki testified that he was familiar with, and used, the process of overetching to create semiconductor devices since at least the early 1970s. Unikel Opp. Dec., Exh. 2, Yamazaki Dep. at 405:13-21. Finally, Yamazaki and SEL cited to U.S. Patent No. 5,198,694 ("the 694 patent") in two patent applications prosecuted at the same time as the 258 application, but not in the 258 application itself. CMO asserts that the 694 patent expressly discloses (1) that it was conventional to use a wet etchant to etch the conductive layer in a TFT; (2) that overetching the conductive layer with a wet etchant was common; and (3) that overetching the conductive layer with a wet etchant could result in a stepped structure. Docket Entry 194, Exh. T, 694 Patent at 3:55-63. CMO additionally claims that SEL separately submitted the entire family of prior art patents directly related to the 694 patent when prosecuting a separate patent. Unikel Opp. Dec., Exh. 12 at 1 and attachments. Regarding the 694 patent, SEL asserts that Yamazaki is not a named inventor of the 258 patent, which names Zhang and Kusomoto as the inventors, and that no inventor or prosecuting attorney of the 258 patent knew of the 694 patent. Furthermore, SEL claims that there is no evidence that Yamazaki had any involvement in the prosecution of the 258 patent. Likewise, although Robinson, the attorney who prosecuted the 258 patent, was involved in the prosecution of a separate SEL patent which cited the 694 patent, Robinson left the firm handling the former patent before the citation to the 694 patent was added. Schlitter Dec., Exh. 11; Robinson Dec. ¶ 3. Because there is no evidence that Zhang, Kusomoto or Robinson knew of the 694 patent during the prosecution of the 258 patent, SEL argues, there was no duty to disclose this unknown reference.

CMO addresses the crucial issue of Yamazaki's involvement in the prosecution of the 258 patent in a footnote. According to CMO, Yamazaki controlled the prosecution of SEL's patent portfolio, and Yamazaki closely monitored and directed the prosecution strategy for the 258 patent. Unikel Opp. Dec., Exh. 2, Yamazaki Dep. at 16:20-19:1, 390:9-392:16; Unikel Opp. Dec., Exh. 9 at SELCMO 0068867-81. CMO's chief piece of evidence tying Yamazaki directly to the 258 patent is a memorandum dated January 6, 1999 describing a prior art device which SEL allegedly withheld from the PTO. The memorandum is titled "Meeting with President Yamazaki," and states that "according to President Yamazaki's instructions, claim 1 is broad, and a Notice of Rejection will likely come, so there is probably no need to move now." Unikel Opp. FN2 Dec., Exh. 9 at 0068872. FN2. CMO additionally cites passages from another District Court decision in which SEL was involved discussing Yamazaki's role in SEL's patent practice. Semiconductor Energy Lab. Co. v. Samsung Elecs. Co., 4 F.Supp.2d 477 (E.D.Va.1998). For the purposes of this motion, the court is concerned only with the evidence in the instant action, not the findings of another court in a separate action. *7 In response to this evidence, SEL argues that the memorandum indicates the instruction from Yamazaki was given no later than January 6, 1999. The next application related to the 258 patent following this memorandum was filed on April 14, 1999, and issued as U.S. Patent No. 6,335,213 on January 1, 2002. Schlitter Dec., Exh. 1. SEL therefore asserts that any duty of disclosure tied to Yamazaki's instructions in the January 1999 memorandum terminated on January 1, 2002. Chiron Corp. v. Genentech, Inc., 268 F.Supp.2d 1126, 1138 (E.D.Cal.2002) (holding that "the duty to disclose information ends when a patent is granted on an application"). Because Yamazaki did not learn of the 694 patent until November 2003 at the earliest, Yamazaki had no duty to disclose the 694

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patent in prosecuting the application for the 213 patent. Unikel Opp. Dec., Exh. 12. Additionally, the application for the 258 patent was filed on May 8, 2002, and the patent issued on June 29, 2004. Apart from the memorandum from January 1999 related to a patent that issued three years later, CMO has presented no evidence that Yamazaki was involved in the prosecution of the 258 patent itself. CMO is thus left to rely on its contentions regarding Yamazaki's general interest in SEL's patents. Absent more substantial evidence of Yamazaki's involvement in the specific application at issue, CMO cannot meet its burden on summary judgment. Additionally, SEL states that the 694 patent is immaterial because its relevant teaching is limited to the fact that overetching was known in the prior art. SEL contests CMO's assertion that the 694 patent also taught the formation of a stepped TFT structure, citing testimony from CMO's own expert stating that the 694 "was teaching away from that structure, step-down structure." Schlitter Rep. Dec., Exh. 3, Kanicki Dep. at 306:5-7. Because the 694 patent disclosed only the process of overetching generally, which was known in the prior art, the reference is immaterial as a matter of law because the Examiner is presumed to be familiar with the prior art. Turning to SEL's representations regarding the state of the prior art as to overetching, SEL denies that it made any misleading statements in this regard. In particular, SEL argues that its position was that overetching to create stepped structures was not known, not that overetching itself was not known. Significantly, the contested statement from the examiner was that "it is well known to overetch to expose the source and drain regions of the TFT device." Unikel Dec., Exh. 14 at 3 (emphasis added). SEL's response was likewise tied to the specific process of creating stepped structures, claiming that "overetching to expose the source and drain regions of the TFT device is not conventional and would not have been known to one with ordinary skill in the art at the time of invention." Id. at Response page 2 (emphasis added). CMO's evidence regarding SEL's knowledge of the use of

overetching as a part of semiconductor manufacturing in general does not contradict SEL's assertions regarding the use of overetching to the specific, purportedly novel, purpose of creating a stepped TFT structure. Accordingly, CMO has provided insufficient evidence of inequitable conduct related to the prior art regarding overetching. b. Stepped TFT Structures *8 CMO additionally alleges that SEL made false representations regarding the novelty of creating a stepped TFT structure. In particular, CMO claims that SEL (1) responded to the 258 patent examiner's rejection based on the 155 patent by suggesting that the claimed "stepped" TFT structure was somehow new and different from prior art structures, and (2) challenged the examiner's reliance on Japanese Patent No. JP 63-86573 ("the 573 patent") by implying that the reference did not show the same structure described in the 258 claims. CMO claims that these assertions were misleading because SEL knew of one reference, U.S. Patent No. 5,270,567 ("the 567 patent") which discloses a stepped structure. Regarding the 573 patent, as a reference which the PTO undeniably had access to and considered, this reference categorically cannot form the basis of an inequitable conduct claim. "When a reference was before the examiner, whether through the examiner's search or the applicant's disclosure, it can not be deemed to have been withheld from the examiner." Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1582 (Fed.Cir.1991). Additionally, attempting to distinguish prior art does not constitute a material omission or misrepresentation. Akzo N.V. v. U.S. Int'l Trade Comm'n, 808 F.2d 1471, 1482 (Fed.Cir.1986). When a patentee makes a representation regarding prior art, "[t]he examiner [i]s free to reach his own conclusion ... based on the art in front of him." Id. CMO's assertion that SEL somehow duped the examiner into misinterpreting the 573 patent when the examiner was able to perform his or her own independent analysis of the reference cannot support an inequitable conduct defense.

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Regarding the 567 patent, SEL argues that this reference is cumulative of the 573 patent and therefore immaterial. The parties appear to agree that the 567 patent discloses a TFT device having a stepped structure with exposed source and drain regions, which is the basis for the materiality of the 573 patent. 567 patent, Fig. 2. Attempting to establish that the 567 patent is not cumulative, CMO raises two principal points. First, based on the diagrams in the 567, 573 and 258 patents, CMO claims that the TFT structure shown in the 567 patent is "visually, much more similar" to the structure in the 258 patent. Unikel Opp. Dec., Exh. 11, Kanicki Dep. at 330:5-332:3, 349:16-350:22. While it is not immediately clear that the diagram in the 567 structure is indeed more similar to the structure of the 258 patent, CMO offers no authority for its proposition that it may overcome a cumulativeness argument by citing increased visual similarities between diagrams. The salient issue is claim limitations. The purported increased similarity does not change the fact that both references disclose a stepped TFT structure. Second, CMO claims that the 573 patent fails to disclose that a TFT with a stepped structure is beneficial to help reduce parasitic capacitance. The 567 patent specifically identifies this as a benefit of the stepped structure. 567 patent at 1:50-2:2, 2:6-22. Again, CMO offers no authority supporting its claim that a reference that discloses a benefit of a claim limitation where the claim limitation itself is disclosed elsewhere is more material than the reference which discloses the claim limitation only. CMO has failed to establish that the additional information in the 567 patent is material in any way. *9 In sum, CMO has failed to raise sufficient evidence to support any of its theories of inequitable conduct with respect to the 258 patent. SEL is therefore entitled to summary judgment on CMO's FN3 inequitable conduct claim as to the 258 patent. FN3. CMO attempts to preserve additional inequitable conduct arguments related to a host of other references by cramming a number of conclusory statements into a

large footnote in its opposition brief. CMO Opp. at 24 n. 20. Such tactics do not suffice to preserve arguments, nor do CMO's conclusory arguments present sufficient evidence to satisfy its burden on summary judgment. Accordingly, SEL is entitled to summary judgment with respect to these references. See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1320 (Fed.Cir.2006) (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991) ("Judges are not like pigs, hunting for truffles buried in briefs.")). C. Laches CMO acknowledges that its laches defense pertains only to the 995 patent. Accordingly, SEL is entitled to summary judgment on CMO's laches claims as to the 480 patent and the 258 patent. D. Patent Misuse "Patent misuse is an equitable defense to patent infringement," the purpose of which is "to prevent a patentee from using the patent to obtain market benefit beyond that which inheres in the statutory patent right." U.S. Philips Corp. v. Int'l Trade Comm'n, 424 F.3d 1179, 1184 (Fed.Cir.2005) (internal quotations omitted). In assessing a claim of patent misuse, the "key inquiry is whether, by imposing conditions that derive their force from the patent, the patentee has impermissibly broadened the scope of the patent grant with anticompetitive effect." Id. (internal quotations omitted). CMO asserts that SEL has engaged in patent misuse by (1) offering to license its patents as a package rather than individually and (2) seeking to enforce invalid patents through bad faith litigation. 1. Package Licensing CMO argues that SEL's practice of licensing its patents as packages constitutes patent misuse. In a striking display of chutzpah, CMO relies exclusively on cases decided in other circuits and districts before the establishment of the Federal Circuit and before a critical amendment to the patent statute for

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the proposition that such package-licensing constitutes patent misuse. See Hazeltine Research, Inc. v. Zenith Radio Corp., 388 F.2d 25, 33 (7th Cir.1967), aff'd in part, rev'd in part, 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969); American Securit Co. v. Shatterproof Glass Corp., 268 F.2d 769, 777 (3d Cir.1959); Duplan Corp. v. Deering Milliken, Inc., 444 F.Supp. 648, 703-04 (D.S.C.1977), aff'd in part, rev'd in part, 594 F.2d 979 (4th Cir.1979); Technograph Printed Circuits, Ltd. v. Bendix Aviation Corp., 218 F.Supp. 1, 50 (D.Md.1963). While this may have been the law of the land in times past, the legal landscape of today is somewhat different. Congress has established a statutory provision addressing the legality of package patent licensing: No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having ... conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned. *10 35 U.S.C. § 271(d). Additionally, the Federal Circuit has held that, "[t]o establish the defense of patent misuse, the accused infringer must show that the patentee has power in the market for the tying product." U.S. Philips, 424 F.3d at 1186. The Federal Circuit explicitly held that the usual presumptions in antitrust law that market power necessarily flows from patent ownership do not apply in the FN4 context of patent misuse. Id. at 1185-86. Rather, the accused infringer must present evidence of market power in order to establish that a tying arrangement constitutes patent misuse. Because CMO has provided no evidence whatsoever of market power, its patent misuse claim as it relates to package licensing fails as a matter of law. FN4. In fact, the presumption of market

power in a patented product has been eliminated in the antitrust context as well. Illinois Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 126 S.Ct. 1281, 1284, 164 L.Ed.2d 26 (2006). Furthermore, SEL has cited unrefuted evidence showing that it has accommodated at least one request to license an individual patent. Schlitter Dec., Exh. 48, Yamazaki Dep. at 38:16-42:18. Even if package-licensing constituted patent misuse, therefore, SEL has shown a willingness to refrain from the practice. 2. Litigation In addition to its claims regarding licensing practices, CMO argues that SEL has committed patent misuse by seeking to enforce patents known to be invalid and/or unenforceable. "The bringing of a lawsuit to enforce legal rights does not of itself constitute violation of the antitrust laws or patent misuse; there must be bad faith and improper purpose in bringing the suit, in implementation of an illegal restraint of trade." Glaverbel Societe Anonyme v. Northlake Marketing & Supply, Inc., 45 F.3d 1550, 1558 (Fed.Cir.1995). Because "a patent infringement suit is presumed to be brought in good faith," Atari Games Corp. v. Nintendo of Am., Inc. ., 897 F.2d 1572, 1577 (Fed.Cir.1990), CMO must present evidence of bad faith or improper purpose in order to establish patent misuse based on patent enforcement. CMO cites no evidence whatsoever to overcome the presumption of good faith litigation. SEL is therefore entitled to summary judgment on CMO's patent misuse defense. II. CMO's Motions A. NonInfringement of the 258 Patent CMO asserts that it does not infringe the 258 patent because CMO's manufacturing process does not include the claim element, "etching the exposed portion of the second semiconductor film to form source and drain regions wherein a channel forming region is formed in said first semiconductor film between said source and drain regions." Addressing

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the parties' arguments in this regard requires a brief review of the court's claim construction regarding this element. In addressing the issue of how much of the semiconductor film (N+ layer) is etched away, the court first held that the term "exposed" means "made subject to etching." Claim Construction Order at 15. The court further held that the exposed portion depended upon the type of etchant used. "If a dry etchant is used to remove the semiconductor film, only the area not covered by the mask will be removed, regardless of whether the conductive layer was previously overetched using a wet etchant. If a wet etchant is used to remove the semiconductor film, part of the semiconductor film lying underneath the mask will also be removed, regardless of whether the conductive layer was previously etched using a dry etchant." Claim Construction Order at 15. The Court then held that "the claims encompass the use of both wet and dry etchants in performing the patterning step, and also encompass the use of a dry etchant in performing the etching step." Id. Finally, the court held that the phrase "etching the exposed portion of the second semiconductor film" means "removing the entire exposed portion of the second semiconductor film." Id. at 16. Incorporating the construction of the term "exposed," the construction becomes "removing the entire portion of the second semiconductor film made subject to etching." *11 For the purposes of the instant motion, the parties dispute whether the accused process must remove only the portion of the N+ layer uncovered by the mask, or the portion uncovered by the electrodes. CMO asserts that the exposed portion is that uncovered by the electrodes in light of the claim limitation, "a portion of the patterned second semiconductor film [N+ layer] is exposed between said source and drain electrodes." SEL claims that only the portion uncovered by the mask must be etched away, citing the court's prior discussion of dry etching. The dispute arises from the fact that CMO's etching process is classified as "dry etching" and yet apparently removes a portion of the N+ layer larger than the area left uncovered by the mask.

1. Judicial Estoppel SEL claims that CMO is judicially estopped from asserting that its dry etch removes portions of the N+ layer below the mask, in light of its representations during the claim construction hearing that dry etching does not remove portions of the layer beneath the mask. In other words, despite CMO's assertion at claim construction that dry etching is anisotropic (i.e., removes material only in the direction of bombardment), CMO now claims that its own dry etching has an isotropic component, meaning the dry etchant removes material in directions other than the direction of bombardment. SEL asserts that judicial estoppel requires that CMO be bound to its initial representations regarding dry etching. Judicial estoppel is an equitable doctrine that "generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase." New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (internal quotations omitted). Although the doctrine is not easily defined, the Supreme Court has identified three factors that are relevant to the application of the doctrine. Id. at 750. First, a party's position in the second instance must be "clearly inconsistent" with its position in the first matter. Id. Second, a court must have accepted the party's earlier position, "so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled." Id. at 750-751. The third consideration is whether the party asserting an inconsistent position "would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." Id. at 751. Regarding the first factor, CMO denies that it has taken inconsistent positions. According to CMO, its representations at claim construction were directed toward dry etching "generally," while its current representations involve CMO's particular dry etching process. The parties focus on a particular exchange from the claim construction hearing

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between the court and CMO's counsel: FN5 MR. TAUB: But you agree that if you use a dry etch here that the dotted lines [indicating the opening created by the mask] reflect what will be etched away as opposed to everything else [beneath the mask]. FN5. Mr. Taub, one of the court's law clerks at the time, is questioning counsel on behalf of the court in this exchange. *12 MR. YOCHES: Yes. MR. TAUB: Okay. MR. YOCHES: Except-and here's the important thing-nothing in the claim and nothing in their definition limits that etchant to a dry etchant. MR. TAUB: Right. But you don't dispute that the claims would include dry etchant, correct? MR. MOSKO: It would include that, but neither the claims or the-because neither the claims or the definition is limited to dry etchant, when you go to the next step [etching the N+ layer], as you properly recognized, if you were wet etching [the N+ layer]-we slipped through these-the portion [of the N+ layer] etched away would have nothing to do with the mask here. Claim Construction Hearing Transcript at 56:4-20. Nowhere in this exchange, however, does defense counsel indicate that a dry etchant can be isotropic. Rather, defense counsel asserted that the etching process could be isotropic if a wet etchant were used. CMO was putting forth the assertion that the 258 claims covered isotropic etching not because they covered isotropic dry etching but because they covered wet etching. The court's subsequent orders was consistent with the view-consistent with the representations of defense counsel-that all dry etchants are anisotropic and all wet etchants are isotropic. The court's Claim Construction Order states: Etchants come in one of two varieties. So-called "dry" etchants are abrasive substances that are used to bombard the target material and remove the material anisotropically, in the direction of the bombardment-a process similar to sandblasting. When a

dry etchant is used in conjunction with a mask, only those areas not covered by the mask are etched. "Wet" etchants, on the other hand, are solvents that remove the target materially isotropically, or at the same rate in all directions. Claim Construction Order at 13. Furthermore, in denying CMO's subsequent Motion for Reconsideration, the court stated the following regarding the reasoning behind its construction of the term "exposed":The court relied upon the claim language, which is broadly stated, noting it encompasses the use of both wet and dry etchants; the description in the specification of the use of different types of etchant; and the parties' stipulations in their papers and at argument that one of ordinary skill in the art would understand that a wet etchant will remove a different part of the surface of a semiconductor device than a dry etchant. Docket Entry 144 at 3. Although the court stated that "[n]o part of this reasoning depends on reference to the accused process," id., the parties' agreement regarding the nature of wet and dry etchants was a significant basis for the court's decision. Although the court's previous orders have focused on the words "wet" and "dry," the more pertinent distinction is between "isotropic" and "anisotropic." Phrasing the distinction in this manner is consistent with the scientific evidence, which demonstrates that the characterization of an etching process as "wet" or "dry" does not necessarily determine whether the process is isotropic or anisotropic. In other words, while using the terms "wet" and "dry" as proxies for "isotropic" and anisotropic," respectively, was helpful in the context of claim construction, characterizing the accused process as "wet" or "dry" is inconclusive in terms of determining infringement. The court must now take a more comprehensive view of isotropic and anisotropic etching. Accordingly, CMO is not judicially estopped from asserting that its etching process, however it is characterized in terms of "wet" and "dry," has an isotropic component, and yet does not remove the entire exposed portion of the N+ layer.

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2. CMO's Dry Etch Process *13 As stated above, CMO claims that its dry etch process etches beneath the mask but does not remove the entire exposed portion of the N+ layer. This court previously held that the extent of the "exposed" portion of the second semiconductor film "would depend on the type of etchant used." Docket Entry 144 at 2. Accordingly, CMO is correct that, in an isotropic etching process, the "exposed" portion of the second semiconductor film is the portion uncovered by the conductive layer. Accordingly, if there is no material dispute as to whether a portion of CMO's N+ layer uncovered by the electrodes remains after the etching process is complete, CMO is entitled to summary judgment of noninfringement. CMO's dry etching process involves reactive plasma gases which are able to move to areas beneath the mask where they can react with and thereby etch any N+ silicon that is not covered by the electrodes. Unikel Dec., Exh. 1, Chou Dep. at 104:24-105:16, 187:20-189:5. According to CMO, all knowledgeable witnesses as well as SEL's expert agree that (1) CMO's plasma etching process is at least partially isotropic, (2) all N+ silicon not covered by the metal electrodes will be exposed to and etched by the plasma gas, and (3) CMO's process is designed so that this dry etching step is completed without etching away the entire amount of N+ silicon that is uncovered by the electrodes. Additionally, SEL claims that its "tapered" TFT structures are inconsistent with what would be expected from an anisotropic etching process, which generally creates vertical surfaces. In response to these claims, SEL relies on a process flow diagram and a conceptual drawing which, according to SEL, indicate that CMO's etching process does not disturb the portions of the N+ layer beneath the mask, and is therefore anisotropic. Schlitter Opp. Dec., Exh. 1; Schlitter Opp. Dec., Exh. 6 at 25. As discussed above, if CMO's etching process is anisotropic, the "exposed" portion of the N+ layer for the purposes of the 258 claims is the portion uncovered by the mask. Because CMO does

not deny that the entire portion of the N+ layer uncovered by the mask is removed by its etching process, if CMO fails to establish that its etching process is isotropic its noninfringement theory fails. Regarding SEL's evidence as to whether the N+ layer is etched under the mask, however, this court has previously held that process flow diagrams and conceptual drawings are unhelpful in determining the specific dimensions of the ultimate TFT structure. See Summary Judgment Order at 13-14. Accordingly, these idealized images do not create a genuine issue of fact with respect to whether CMO's etching process is isotropic or anisotropic. Additionally, SEL cites a statement from CMO's expert, Dr. Hatalis, stating that plasma reactive ion etching ("RIE") such as that used by CMO is anisotropic. Schlitter Opp. Dec., Exh. 4 at 19:6-9. What Dr. Hatalis actually stated, however, was that "[i]n general the RIE plasma etch process tends to be anisotropic, but in this case at it is explained next, the anisotropy is compromised." Id. at 19:8-9. Dr. Hatalis went on to specifically state that a portion of the N+ layer beneath the mask is etched by CMO's RIE process: "It is important to note, that any portions of silicon layer that are not in direct contact with, and thus not protected by, the metal will be subjected to etching by the gas species. This etching as stated above will occur even in the small portion of the material under the photoresist [mask]." Id. at 20:9-11. The report of another of CMO's experts, Dr. Kanicki, is consistent with this analysis, stating that "[a]lthough dry etching is generally regarded as an anisotropic process, an isotropic dry etch process could also be produced by using" plasma. Schlitter Opp. Dec., Exh. 6 at 20:18-21. Additionally, SEL claims that Dr. Hatalis never reviewed evidence related to the N+ layer, though the deposition testimony SEL cites does not support this broad proposition. Finally, although SEL contends that Dr. Kanicki stated that the tapered wall profiles are the result of mask erosion, Dr. Kanicki additionally opined that isotropic overetching may etch the film under the mask. Schlitter Opp. Dec., Exh. 6 at 24.

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*14 Because the evidence cited by SEL does not contradict CMO's evidence that CMO's isotropic etching process removes portions of the N+ layer without removing the entire portion uncovered by the electrodes, CMO is entitled to summary judgment of noninfringement of the 258 patent. B. Invalidity of the 258 Patent CMO claims that the 258 patent is anticipated and/ or rendered obvious by a number of prior art references, focusing, again, on the step "wherein said conductive layer is overetched to form a stepped portion from an upper surface at the source and drain electrodes to the surface at the first semiconductor film." In particular, CMO has identified five prior art references which disclose a stepped TFT structure as claimed in the 258 patent: U.S. Patent No. 5,270,567 ("the 567 patent"), Japanese Patent Publication No. S63-86573 ("the 573 publication"), U.S. Patent No. 4,797,108 ("the 108 patent"), Japanese Patent Publication No. S63-224258 ("the 258 publication") and Japanese Patent Publication No. H02-281238 ("the 238 publication"). SEL does not deny that these references disclose a stepped TFT structure. The dispute therefore turns on CMO's second contention: that the references additionally disclose overetching to create a stepped TFT structure, or that the use of overetching to create such a structure would have been obvious to one skilled in the art. 1. Anticipation To prove invalidity based on anticipation, CMO must show that a single prior art reference discloses every limitation of the claimed invention. Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1377 (Fed.Cir.2003). Anticipation is a question of fact. SmithKline Beecham Corp. v. Apotex Corp., 403 F.3d 1331, 1343 (Fed.Cir.2005), cert. denied, --U.S. ----, 126 S.Ct. 2887, 165 L.Ed.2d 938 (2006). "However, without genuine factual disputes underlying the anticipation inquiry, the issue is ripe for judgment as a matter of law." Id. The burden of proof in all instances falls upon the party seeking to establish the invalidity of a patent claim, who

"must overcome the presumption of validity in 35 U.S.C. § 282 by clear and convincing evidence." State Contracting & Eng'g Corp. v. Condotte Am., Inc., 346 F.3d 1057, 1067 (Fed.Cir.2003). a. The 567 Patent, the 238 Publication, the 258 Publication and the 573 Publication. CMO claims that, because overetching was, and is, a well known part of every etch process, overetching is inherently taught by the 567 patent, the 238 publication, the 258 publication and the 573 publication. In advancing this inherency argument CMO appears to acknowledge that none of these references explicitly discloses the use of overetching to create a stepped TFT structure. "Inherent anticipation requires that the missing descriptive material is necessarily present, not merely probably or possibly present, in the prior art." Trintec Indus., Inc. v. Top-U.S.A. Corp., 295 F.3d 1292, 1295 (Fed.Cir.2002) (internal quotations omitted). As discussed above in reference to CMO's inequitable conduct claims, SEL acknowledges that overetching itself was generally known in the art at the time of the invention. CMO has also cited additional evidence that overetching is always part of any etching process. SEL's expert, Dr. Thomas, testified that overetching is part of every etch process for entirely removing a layer of material. Unikel Dec., Exh. 3, Thomas Dep. at 122:15-123:23. A prior art textbook additionally states that "[i]n any etch process there is always some degree of overetch planned into the process." Unikel Dec., Exh. 12 at 222-23. Yamazaki himself testified that overetching was used in the early 1970s in his own work in the fabrication of TFTs. Unikel Dec., Exh. 11, Yamazaki Dep. at 405:13-21. Accordingly, SEL claims that the innovation of the 258 patent was the use of overetching as a means of creating a stepped N+ layer. *15 In response to CMO's argument, SEL claims that the 258 publication teaches that the N+ step is formed by using multiple masks rather than overetching, and that this indicates that an N+ step can be formed by a process other than overetching.

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If this is the case, the stepped structures disclosed by the other references could be made by means other than overetching, and overetching would therefore not be an inherent element in the formation of these structures. CMO counters that this is not a meaningful distinction between the 258 publication and the 258 patent, for two reasons. First, in its Claim Construction Order, this court construed the overetching step broadly, holding as follows: The systematic variation of claim language suggests that "overetched," as used in claim 3, is not confined to a particular type of etching (which is added in claim 6) or a particular timing for etching (which is added in claims 7 and 8). Claim 3 requires only that the conductive layer be overetched. Both parties agree that one of ordinary skill in the art would understand that overetching can be performed either as a separate step, involving the application of additional etchant, or by extending the original etching such that the etchant undercuts the mask. The language of claim 3 encompasses both meanings. Claim Construction Order at 17. Second, the 258 patent itself suggests the use of multiple masks to create the stepped TFT structure. 258 Patent, Figs. 3(A)-3(H), 6:8-7:26. CMO claims that this establishes that the use of multiple masks does not affect the necessary involvement of overetching in the formation of the N+ step. While overetching was known in the art, and appears to have been a byproduct of many etching processes, none of the asserted references disclose the use of overetching as a tool to create a stepped TFT structure. Rather, the stepped structure was created by other means. SEL's claimed innovation of specifically using overetching to create a stepped structure is therefore not disclosed in these references, and these references do not anticipate the 258 patent. b. The 523 Publication CMO additionally argues that the 258 patent is anticipated by Japanese Patent Publication No.

H01-180523 ("the 523 publication"), which teaches a method of producing a TFT using a form of overetching the conductive layer. In particular, the 523 publication teaches to "process the Cr [chromium] film by photo-etching, and separate the drain electrode ... and the source electrode ... as well as removing the Cr film on the pixel electrode." Unikel Dec., Exh. 16 at CMO 0183037. The publication additionally states that "when the Cr film is further etched using the same resist, the Cr film 52 and 62 of the drain electrode 5 and the source electrode 6 move backwards and the undercut of the n type amorphous silicon film can be prevented." Id. CMO asserts that this "further etching" step necessarily results in a stepped TFT structure because preventing undercut of the N-type material inherently requires moving the chromium layer backward from the inner edge of the N-type material, resulting in an exposed upper surface of the Ntype layer. As SEL points out, however, the publication further states that this "further etching" step results in the structures shown in Figures 1 and 2 of the publication. These figures fail to disclose a stepped N-type layer. *16 Additionally, SEL's expert, Dr. Thomas, has opined that the 523 publication discloses only an "aligned structure" rather than a stepped structure, i.e. that the edge of the N-type layer is aligned with the edge of the chromium layer. Thomas Dec., Exh. 3 at 4-7. CMO acknowledges that this was Thomas' conclusion but asserts that Thomas was incorrect. Significantly, CMO's motion offers no expert evidence of its own, or any other evidence for that matter, supporting its own interpretation of the 523 publication. Only in CMO's reply brief does it cite testimony from its own expert claiming that the 523 "further etching" step results in a stepped structure. Even assuming that CMO's expert evidence on this topic has been properly presented after having been omitted from its opening brief, the court cannot resolve this expert dispute on summary judgment. At the very least, SEL has created a genuine issue of fact as to whether there is clear and convincing evidence that the 523 publication anticipates the 258 patent.

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c. The 774 Publication Finally, CMO claims that Japanese Patent Publication No. H2-272774 ("the 774 publication") anticipates the 258 patent. CMO cites two passages from the 774 publication dealing with etching metal films and transparent conductive films. The first passage states that [o]ne may process chromium film etching transparent conductive film etching chromium film etching, so as to form the etching pattern of the metal film such as a chromium metal film ... on the inside of the etching pattern of the transparent conductive film ... to prevent the backward movement of the chromium metal film pattern toward the underside of the transparent conductive film pattern. Unikel Dec., Exh. 17 at CMO 183083. The second passage states that "one may further immerse the metal film into the liquid etchant for the metal such as aluminum, so as to form the pattern ... made from a metal film such as aluminum inside the pattern ... made from a metal film such as chromium film." Id. The publication indicates that the transparent conductive film sits atop the N-type silicon layer. No illustrations are provided for these two optional processes in the publication. CMO nonetheless claims, again without citation to expert testimony, that these two processes necessarily create a step from the transparent conductive film to the N-type silicon. In response, SEL makes two arguments. First, SEL claims that CMO's expert, Dr. Kanicki, testified that the 774 publication discloses an N-type silicon layer completely covered by the electrodes. Schlitter Opp. Dec., Exh. 11, Kanicki Dep. at 162:9-12. CMO responds that this testimony referred only to a particular figure in the 774 patent which does not form the basis for their current anticipation argument. Id. at 162:3-8. Second, SEL claims that the processes discussed above discuss only etching the source electrodes rather than the drain electrode. *17 Taken together, this does not constitute clear and convincing evidence that the 774 publication discloses the stepped N-type layer present in the

258 patent. However, the reference clearly discloses overetching and the formation of stepped structures other than the N-type layer, and therefore may render the 258 patent obvious as discussed below. 2. Obviousness In addition to raising anticipation arguments, CMO claims that each of the above references renders the 258 patent obvious. a. Obviousness Standard To prove that a patented invention is invalid as obvious, the accused infringer must identify prior art references "which alone or combined with other references would have rendered the invention obvious to one of ordinary skill in the art at the time of invention." Al-Site Corp. v. VSI Int'l, Inc., 174 F.3d 1308, 1323 (Fed.Cir.1999) (citations omitted). "Obviousness is a question of law premised on underlying findings of fact." Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1332 (Fed.Cir.2005), cert denied, --- U.S. ----, 126 S.Ct. 568, 163 L.Ed.2d 499 (2005) (citing Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966)). These underlying factual determinations include: (1) the scope and content of the prior art; (2) differences between the prior art and the claims at issue; (3) the level of ordinary skill in the art; and, if necessary, (4) secondary evidence of nonobviousness. Graham, 383 U.S. at 17-18; ParaOrdnance Mfg., Inc. v. SGS Imps. Int'l, Inc., 73 F.3d 1085, 1087-88 (Fed.Cir.1995). Like anticipation, the affirmative defense of obviousness must be established by clear and convincing evidence. See Boehringer Ingelheim Vetmedica, Inc. v. Schering-Plough Corp., 320 F.3d 1339, 1353 (Fed.Cir.2003). The Supreme Court has recently clarified the test for obviousness, specifically the analysis applicable to whether there exists some "teaching, suggestion or motivation" to combine prior art references, which has traditionally been a requirement for a finding of obviousness. The Court described this test as a "helpful insight" rather than a rigid for-

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mula, and held that "the analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ." KSR Int'l Co. v. Teleflex Inc., --- U.S. ----, 127 S.Ct. 1727, 1741, --- L.Ed.2d ---- (2007). The Court further emphasized the need for courts to value "common sense" over "[r]igid preventative rules." Id. at 1742-43. While KSR was pending before the Supreme Court, the Federal Circuit emphasized the flexibility of the teaching, suggestion or motivation analysis in DyStar Textilfarben GmbH & Co. Deutschland KG v. C.H. Patrick Co., 464 F.3d 1356 (Fed.Cir.2006), cert. denied, --- S.Ct. ----, 2007 WL 682021 (2007). There, the court held that the "suggestion test is in actuality quite flexible and not only permits, but requires, consideration of common knowledge and common sense." Id. at 1367 (emphasis in original). Furthermore, the court acknowledged the possibility of an implicit motivation to combine, i.e. one not explicitly apparent in the prior art. "If, as is usually the case, no prior art reference contains an express suggestion to combine references, then the level of ordinary skill will often predetermine whether an implicit suggestion exists." Id. at 1370. Thus a high skill level renders a finding of implicit motivation more likely, as skilled individuals are more likely to combine references "without being told to do so." Id. *18 Accordingly, this court's analysis of the parties' arguments regarding obviousness must be flexible and guided by common sense. b. Preclusion As a general matter, SEL claims that each of CMO's obviousness arguments are precluded because CMO allegedly failed to properly disclose these theories in its Final Invalidity Contentions as required by the Patent Local Rules. "If a combination of items of prior art makes a claim obviou