Synopsys, Inc. v. Siemens Industry Software Inc.

Background

Synopsys and Siemens disputed whether Siemens’s Aprisa place-and-route electronic-design-automation software infringed U.S. Patent Nos. 8,234,614 and 7,853,915. The parties’ June 2018 Patent License and Settlement Agreement (PLSA) addressed products of an acquired entity and provided that, after acquisition, only modifications to that entity’s products would be treated as licensed products. The parties submitted to arbitration whether Siemens’s changes to Aprisa created a license and, if so, its scope. The arbitration tribunal rejected Siemens’s position that the entire new Aprisa product was licensed, but explained that particular modifications might theoretically be covered.

Synopsys’s Summary-Judgment Motion on the License Defense

Synopsys sought partial summary judgment on Siemens’s eleventh affirmative defense of non-infringement based on the PLSA. Synopsys argued that the arbitration decision barred Siemens from asserting any license defense under claim-preclusion principles because Siemens had already argued that new Aprisa was licensed as a whole. Siemens accepted that it had lost that argument but contended that the tribunal had recognized a possible license for modified parts of Aprisa, especially in light of Synopsys’s later infringement theories.

The court did not decide either side’s competing argument about whether the evidence established sufficient modifications. It held that whether Siemens was barred from asserting a partial-license defense, and whether parts of new Aprisa were modified enough to receive a license, were issues for arbitration. Synopsys’s motion for partial summary judgment was DENIED.

Motions to Exclude Siemens’s Experts

Synopsys moved to exclude the opinions of Siemens’s experts Dr. Stephen Melvin and Dr. Marilyn Wolf under Federal Rule of Evidence 702, which requires expert testimony to be relevant and based on reliable methods.

The court found Melvin sufficiently qualified to testify about Aprisa’s software code, functionality, changes, and testing. The court ruled that challenges to the scope and reliability of his testimony could be addressed at trial rather than through complete exclusion. Synopsys’s motion to exclude Melvin was DENIED, except for withdrawn testimony concerning the 2006.06 version of IC Compiler.

The court also declined to exclude Wolf’s opinions about prior art, conventional features, and Aprisa. The court said Synopsys could raise objections at trial if Wolf offered testimony that improperly presented an invalidity theory based on references not used in an earlier challenge. Synopsys’s motion to exclude Wolf was DENIED.

The court separately DENIED Siemens’s motion to strike portions of Synopsys’s filings that cited materials submitted in the arbitration. The court found that Synopsys had made a good-faith, though unsuccessful, claim-preclusion argument and had made limited necessary use of those materials.

Siemens’s Summary-Judgment Motion

Siemens sought summary judgment of non-infringement for both patents.

The 614 Patent

The asserted 614 Patent claims required, among other things, routing different subsets of semiconductor-chip nets while avoiding conflicts. Siemens argued that Aprisa allowed nets from different subsets to occupy the same region, which could not satisfy the court’s claim construction and the patent’s definition of a conflict.

The court agreed that the patent defined a conflict as two or more routed nets occupying the same region of the chip. The court found that Synopsys’s expert, Dr. Matthew Guthaus, admitted that Aprisa allowed multiple nets from different subsets to be routed to the same region. That defeated Synopsys’s infringement theory under the claim construction and patent definition. Siemens’s motion for summary judgment of non-infringement of the 614 Patent was GRANTED.

The 915 Patent

For the 915 Patent, Siemens argued that the asserted claims required Aprisa to be configured to perform the claimed steps in the exact order, rather than merely having the capability to perform them. The court disagreed, holding that the claim language described a device capable of performing the required elements. The court also found factual disputes about whether Aprisa could perform the required functions, including disputes between the parties’ experts.

Siemens argued separately that claim 51 was a means-plus-function claim requiring Synopsys to identify corresponding structures in the patent specification. The court explained that claims ordinarily are presumed not to be means-plus-function claims when they do not use the word “means.” It found a factual dispute about whether the structures described in claim 51 were sufficiently definite to avoid that treatment. Siemens’s motion for summary judgment of non-infringement of the 915 Patent was DENIED.

Damages

Siemens sought to prevent Synopsys from relying on foreign sales in its damages calculation. Synopsys argued that foreign revenue could be relevant because Siemens allegedly developed and tested Aprisa in the United States. The court found no evidence that Siemens made copies of Aprisa in the United States and sold those copies abroad. It ruled that foreign sales themselves could not be included in the royalty base. Siemens’s motion was GRANTED regarding foreign sales.

Siemens also sought to limit damages based on Synopsys’s alleged failure to mark patented products. The court found that Siemens met its initial burden by identifying IC Compiler 2 as a possible unmarked product and that Synopsys did not produce evidence showing that IC Compiler 2 was marked after the 915 Patent issued. The court ruled that the damages period could begin no earlier than June 16, 2020. Siemens’s motion was GRANTED regarding failure to mark.

Motions to Exclude Synopsys’s Experts

Siemens moved to exclude the opinions of Synopsys’s damages expert John L. Hansen and certain opinions of Synopsys’s infringement expert Dr. Matthew Guthaus.

The court declined to exclude Hansen’s reasonable-royalty opinions because Siemens had not shown prejudice from the timing of the disclosure. The court also treated Siemens’s challenges to Hansen’s sources and valuation analysis as issues affecting the weight of his testimony rather than its admissibility. The court did not address Hansen’s royalty opinions concerning the 614 Patent because it had already granted summary judgment to Siemens on that patent.

Siemens also challenged Guthaus’s use of scripts to test whether Aprisa could perform the steps required by the 915 Patent. The court found that it was unclear whether the allegedly new scripts differed so substantially from earlier disclosed scripts that Siemens was prejudiced. Siemens could challenge the scripts at trial, where the jury could resolve factual disputes about Aprisa’s capabilities. Siemens’s motion to exclude Hansen and Guthaus was DENIED.

Sealing and Final Dispositions

The court directed the parties, within 20 days, to meet and confer and submit a consolidated chart identifying information they believed should remain sealed and the supporting declarations. The court stated that it would not close the courtroom during trial except for a limited period if truly critical confidential information had to be discussed.

The final rulings were: Synopsys’s motions for summary judgment and to exclude Melvin and Wolf were DENIED; Siemens’s motion for summary judgment was GRANTED concerning the 614 Patent, DENIED concerning the 915 Patent, and GRANTED regarding foreign sales and failure to mark; Siemens’s motion to exclude Hansen and Guthaus was DENIED; and Siemens’s motion to strike arbitration materials was DENIED.