Pact XPP “Cannot Have [Its] Claim and Eat It, Too”, Says Delaware Court

Patent cases often turn on a court’s construction of key language from a patent claim, since determining what subject matter a claim actually covers can bear directly on whether an accused product infringes that claim. While it is common for parties to argue for constructions that favor their respective positions, a recent ruling from the District of Delaware underscores the potential consequences of changing those arguments for strategic reasons. On July 26, the court faulted patent owner Pact XPP Schweiz AG for obtaining a narrow construction of claim language from one of its semiconductor patents in order to avoid a rejection during prosecution, only to push for a broader construction when trying to establish infringement by Intel. Rather, Eastern District of Pennsylvania Judge Joshua D. Wolson, sitting by designation, held that Pact XPP had disclaimed that broader reading during prosecution. Judge Wolson instead applied a narrower construction and held that Intel did not infringe as a result—while emphasizing that “words matter”.

Pact XPP began its campaign in February 2019 with a first Delaware suit against Intel, targeting its alleged use of certain technologies related to multi-core chip operation. At issue were patents acquired in 2018 from another entity, PACT XPP Technologies AG, that waged its own campaign from December 2007 to mid-December 2015. A planned Intel motion to transfer that 2019 case out of Delaware then prompted the parties to race to two separate courthouses: PACT XPP voluntarily dismissed its first case in favor of an analogous action in the Western District of Texas, followed one day later by a declaratory judgment action that Intel filed against the patent holder in the Northern District of California. Intel contended in that California complaint that Pact XPP’s West Texas complaint constituted an attempt to “improperly forum shop”, also seeking a breach of contract judgment concerning an October 2007 covenant not to sue that Intel argued bars PACT XPP’s affirmative litigation.

However, in May 2019, the parties notified that court that they were “desirous of putting their dispute as to venue behind them by having their case venued in the District of Delaware”, stipulating that Pact XPP and Intel would respectively dismiss the Texas and California actions, and that Pact XPP would file a complaint identical to the Texas one (apart from portions relating to venue) in the District of Delaware. While the case originally involved 12 patents, the scope was narrowed over the course of litigation to just claims 1, 2, 4, 5, 10, 11, 14, 15, 16, 17, 21, and 22 of the 8,471,593 patent—as noted by the court, as a result of “inter partes review, ex parte reexamination, summary judgment, and PACT’s voluntary dismissal of some claims with prejudice”.

The case then proceeded through claim construction, during which Pact XPP took the position that no construction was needed for the terms “dedicated for data transfer” and “physically dedicated connection”, where such a “dedicated connection” is between a “data processing core” and at least one of a plurality of memory units. Neither party requested any further construction from the court at the time, as result of which Judge Wolson’s September 2020 Markman order included no construction for those terms. The following month, Intel then sought a supplemental construction for those terms, arguing that Pact XPP had taken a contrary position in an IPR against the ‘593 patent by offering an express construction that, per Intel, was “key” in helping it avoid institution, Intel seeking to adopt those same constructions in the district court case. The court denied that motion, citing the fact that Intel knew about the patent owner’s PTAB construction before the Markman hearing, as well as the order he issued that same day staying the case pending the outcome of that IPR, but left open the possibility of seeking an alternative construction “if the dispute persists”. Judge Wolson subsequently denied an Intel summary judgment motion in part as to the ‘593 patent, finding there was dispute of material fact over whether the “overlapping” connections found in the accused Intel processors constitute “dedicated” or “exclusive” connections as described above.

That claim language then became a key issue in an ex parte reexamination filed by Intel in June 2021. In that proceeding, the examiner issued a first nonfinal rejection that determined the claims at issue were rendered obvious by the “Fu” patent (6,457,087)—finding that a structure recited by Fu, providing pathways between all claimed memories and processors, constituted the “dedicated connection” claimed by the ‘593 patent because Fu’s claimed switches “could be configured to allow for a processor to access [a claimed memory control unit] to the exclusion of other devices”. Pact XPP overcame that rejection by convincing the examiner that under the plain and ordinary meaning of “dedicated”, a skilled artisan would understand that “a direct connection is a dedicated connection only when that connection is devoted to connecting two units while excluding connection to any and all other units” (emphasis by Judge Wolson).

In September 2023, Intel sought leave to renew its summary judgment motion, arguing that Pact XPP had disclaimed the claim scope encompassing overlapping connections, and seeking to ask the court for a judgment that the narrower construction adopted by the patent owner during prosecution “renders Intel’s products indisputably non-infringing”. Judge Wolson granted leave to file that motion in March 2024.

On July 26, Judge Wolson then granted Intel’s resulting renewed summary judgment motion, agreeing with Intel that Pact XPP’s assertions during prosecution regarding claim scope “demonstrate a clear intent to exclude a particular interpretation to obtain claim allowance against Fu and therefore constitute a prosecution disclaimer. That disclaimer now binds PACT with respect to alleged infringement by Intel”.

In reaching that conclusion, Judge Wolson rejected the patent owner’s argument that prosecution disclaimer should not apply because other statements made during the prosecution history “render this assertion ambiguous” (as paraphrased by the court). Any such statements cannot be viewed “in isolation”, explained Judge Wolson, but rather must be viewed “in light of the context of the prosecution history as a whole to understand what, exactly, PACT was telling the examiner”. With this in mind, Judge Wolson rejected the Pact XPP’s reliance on statements made to the examiner that the “dedicated connection” was distinct from and “required more than” the interconnection system described by Fu, when viewed in the context of the prosecution history:

PACT was not arguing that there needed to be more connective elements, as it suggests now, but instead that a mere direct route from device to memory unit—without exclusivity of purpose or connectivity—was insufficient to satisfy the “dedicated” limitation. PACT can’t now take that assertion and invert it for purposes of creating an ambiguity because the context doesn’t allow it. It’s also significant that the Examiner did not rely on this distinction. Nor does it follow logically from the plain language of the claims.

Having thus found that Pact XPP had disclaimed the broader claim scope described above, Judge Wolson proceeded to construe “dedicated connection” to mean “a connection designed to directly interconnect a particular device to a particular memory via a link inaccessible to other devices and memories”.

Based on that construction, Judge Wolson granted summary judgment of noninfringement to Intel. In particular, he found that no reasonable jury could find that the accused Intel chips practiced every limitation of the asserted claims because the accused interconnection system for those chips—a “ring interconnect that functions as a transit loop between the components”—directly interconnects a “particular device to a particular memory” but does not exclude “other devices and memories” as required by the court’s construction.

Judge Wolson then concluded by chastising Pact XPP for its strategic about-face on claim construction: “In many instances, the law permits a party to take contradictory positions on a particular issue at different times and in different courts. But patent prosecution and subsequent litigation isn’t one of them; a patentee cannot have his claim and eat it, too”.