NXP USA Inc v. Impinj Inc
2:20-cv-01503
| W.D. Wash. | Nov 4, 2022Background
- NXP sued Impinj alleging infringement of three "wafer patents" (U.S. Pat. Nos. 7,456,489; 7,538,444; 8,415,769) concerning wafer layout and singulation/alignment marks for RFID IC wafers.
- TSMC, a licensed foundry under a technology agreement from Philips (extended to NXP), manufactured and sold the accused wafers to Impinj; Impinj supplied chip designs and had input on wafer layout.
- Impinj purchased wafers from TSMC and used third‑party vendors (e.g., STARS) to singulate (dice) the wafers after delivery.
- Impinj moved for partial summary judgment arguing NXP’s patent rights were exhausted by TSMC’s licensed sales (patent exhaustion / first‑sale defense); NXP disputed characterization of transactions as product sales and raised fact issues about who practiced claim elements.
- The court found (after supplemental briefing and a discovery period) that TSMC’s licensed sales to Impinj were authorized sales that exhausted NXP’s patent rights as to the wafer patents, and also found no infringement of the ’769 method claims because Impinj’s singulation vendor does not use the claimed alignment‑mark method.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TSMC’s transfers to Impinj were an "authorized sale" (sale vs. fabrication services) | Transactions were really sales of fabrication services / manufacturing capacity, not product sales, because Impinj heavily designed/layouted wafers | TSMC sold wafers (product) to Impinj; foundry relationships where customer supplies design still constitute sales that can trigger exhaustion | Authorized sale: Court held TSMC’s transfers were sales that trigger patent exhaustion despite customer design input |
| Whether TSMC acted within the scope of its license (authorization) | NXP: allowing unlicensed parties to practice claim elements (design/arrangement/post‑fabrication) shows TSMC exceeded its license | Impinj/TSMC: license authorizes TSMC broadly to make and sell products using the patents; TSMC’s acts were within that scope | Within scope: Court held TSMC acted within license; sale was authorized for exhaustion purposes |
| Pre‑fabrication claim elements (design/arrangement language) — who ‘‘practiced’’ them | NXP: claim language about "designed" or "arranged" requires the licensee (TSMC) to perform those steps; customer design means licensee didn’t practice claims | Impinj: those claim phrases describe product structure ("made to/arranged to"), not separate method steps requiring TSMC to perform them | Court: these are structural/"capable of" limitations; customer design does not defeat exhaustion |
| Post‑fabrication singulation (’769 method claims) — do third‑party vendors infringe or break exhaustion | NXP: third‑party singulation might practice claimed method steps, so exhaustion may not apply | Impinj: its singulation vendor (STARS) uses circuit structures, not alignment‑mark methods claimed; therefore no infringement regardless of exhaustion | No infringement on ’769 method claims: Court granted SJ because undisputed vendor practice does not use claimed alignment‑mark method |
| Whether wafers "substantially embody" the patents | NXP: third‑party post‑fabrication steps may be inventive; wafers may not embody all inventive aspects | Impinj: wafers embody essential inventive features of layout patents; and no vendor uses the claimed singulation method for the ’769 patent | Substantial embodiment satisfied for layout patents (no post steps needed); ’769 resolved on non‑infringement (vendor practice) so embodiment issue immaterial |
Key Cases Cited
- Quanta Computer v. LG Elec., 553 U.S. 617 (2008) (authorized sale by licensee exhausts patentee's rights)
- Impression Prod., Inc. v. Lexmark Int’l, Inc., 137 S. Ct. 1523 (2017) (licensee sales within license amount to patentee authorization for exhaustion)
- Intel Corp. v. ULSI Sys. Tech., 995 F.2d 1566 (Fed. Cir. 1993) (foundry relationship where customer supplies design does not prevent exhaustion)
- JVC Kenwood Corp. v. Nero, Inc., 797 F.3d 1039 (Fed. Cir. 2015) (test for whether an article "substantially embodies" a patent)
- LifeScan Scotland, Ltd. v. Shasta Techs., LLC, 734 F.3d 1361 (Fed. Cir. 2013) (principles on exhaustion and what constitutes substantial embodiment)
- Keurig, Inc. v. Sturm Foods, Inc., 732 F.3d 1370 (Fed. Cir. 2013) (patent exhaustion as an affirmative defense)
- Tessera, Inc. v. Int’l Trade Comm’n, 646 F.3d 1357 (Fed. Cir. 2011) (licensee sales not restricted by license terms may exhaust rights)