Synthesizing More Lessons From the Silicon v. Cresta Frequency Synthesizer Case

Order Re: Motions For Summary Judgement And Defendant’s Motion To Strike, Silicon Laboratories, Inc. v. Cresta Technology Corporation. Case No. 14-cv-03227-PSG (Judge Paul S. Grewal)

As we previously reported, the dispute between Silicon Laboratories and Cresta Technology regarding patents on frequency synthesizer circuits (which are used to generate an electric signal of a desired frequency) offers useful lessons on how to apply the definiteness standard post-Nautilus. The tale continues with a series of vignettes in an order by Magistrate Judge Paul Grewal in Silicon Laboratories, Inc. v. Cresta Technology Corporation Case No. 14-cv-03227-PSG (N.D. Cal. Mar. 3, 2016), who entered an Order addressing multiple substantive motions filed by both parties. Here are some useful practice pointers that emerge from this order:

NDA Trumps Estoppel Defense

Estoppel is a routinely-pleaded, but rarely tried, affirmative defense to patent infringement, based on a patentee misleading an alleged infringer to reasonably believe that the patentee did not intend to enforce its patent against the infringer. CrestaTech asserted an estoppel defense based on the fact that, as part of a due diligence process for a prior merger in 2007, Silicon Labs had received samples of and performed extensive testing on CrestaTech’s accused television tuner products. CrestaTech argued that Silicon Labs’ silence since 2007 regarding those products misled CrestaTech into believing that it did not infringe. Magistrate Judge Grewal rejected this argument and granted summary judgment to Silicon Labs on the issue, finding that Silicon Labs had obtained the products under a non-disclosure agreement that precluded it from analyzing the product for any purpose other than evaluating a potential business relationship. Under the terms of that agreement, Silicon Labs could not determine whether the products infringe its patents, and therefore had no clear duty to speak to CrestaTech regarding infringement.

Significance of Claim Preamble in Claim Construction

Whether the preamble of a claim limits the scope of the claim has always been a rather “mushy” question which has vexed many District Courts. The inquiry centers on whether the preamble “recites essential structure or steps” or if it is “necessary to give life, meaning, and vitality” to the claim. Conversely, and equally nebulously, the preamble is not limiting where the claim “defines a structurally complete invention” and the preamble is used only to “state a purpose or intended use for the invention.” Claim 11 of Silicon Labs’ asserted patent U.S. Patent No. 6,137,372 included a preamble that simply introduced “a wireless communication system.” CrestaTech argued (though without citing evidence) that the accused products are not part of a wireless communication system because consumers use the products by plugging them into a cable box. Magistrate Judge Grewal found that the body of the claim—which include a frequency synthesizer and associated circuitry—defines a complete invention. The preamble thus “described only an intended use” and “has no effect on the interpretation of the claim.” The Court’s conclusion serves as a reminder to patent drafters that there often will be potential benefit to completely defining the elements of the invention in the body of the patent claim, rather than including critical elements solely in the preamble.

Anticipation Requires Disclosure of All Elements Arranged As In the Claim

Finally, Magistrate Judge Grewal’s order serves as a reminder that anticipation requires not only that a single reference disclose all of the elements of a claim, but that it further requires the disclosure of these elements “arranged as in the claim.” Case in point here, the asserted patents are based on use of two capacitance circuits that control the output frequency: a discretely variable capacitance circuit for coarse tuning of the output, and a continuously variable capacitance circuit for fine tuning. CrestaTech’s allegedly anticipatory references include a Ph.D. dissertation and corresponding book that teach both the discretely and continuously variable capacitance circuits. However, the references do not teach the specific arrangement of these circuits as in the patents. Indeed, the references even explain that the actual patented arrangement “should be seriously considered” in future efforts, while referring to such a proposal as an open challenge. Emphasizing the “arranged as in the claim” rule for anticipation, Magistrate Judge Grewal granted summary judgment to Silicon Labs that the references do not anticipate the claims at issue.