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17 March 2017Patents

Federal Circuit affirms $36m verdict against Synopsys

The US Court of Appeals for the Federal Circuit yesterday affirmed a $36 million verdict in a patent lawsuit against Synopsys, an electronic design software company.

In a 42-page ruling, the Federal Circuit also  granted Synopsys’ rival Mentor Graphics a new trial to argue that Synopsys wilfully infringed patents and to assess Mentor’s claim for enhanced damages.

The dispute began at the US District Court for the District of Oregon, where Mentor asserted US patent numbers 6,240,376; 6,947,882; 6,009,531; and 5,649,176 against Synopsys.

Synopsys hit back, asserting two patents against Mentor: US numbers 6,132,109 and 7,069,526.

All of the patents concern simulation/emulation technology.

In 1998, Mentor had filed the application that would become the ’376 patent. The two inventors, Alain Raynaud and Luc Burgun, were Mentor employees and assigned the invention to Mentor.

Raynaud and Burgun subsequently left Mentor and founded EVE.

In 2006, Mentor sued EVE for infringement of the ’376, ’531 and ’176 patents, claiming that EVE’s ZeBu emulation and verification system infringed the patents.

However, Mentor and EVE settled before trial and EVE obtained a licence to the three patents.

The licence contained a provision terminating the licence if EVE were acquired by another company in the emulation industry and, in 2012, Mentor learned that Synopsys was in discussions to acquire the company.

According to the Federal Circuit, Mentor’s CEO contacted Synopsys’ CEO offering to waive the confidentiality provision of the Mentor-EVE licence to inform Synopsys that the licence would terminate if Synopsys acquired EVE.

Synopsys and EVE then filed a declaratory judgment action, seeking a declaration that the patents were invalid and not infringed. EVE was then acquired by Synopsys.

Mentor answered the declaratory judgment complaint, adding counterclaims of wilful infringement of the ’531, ’176 and ’376 patents.

Synopsys amended its complaint to assert claims of infringement of the ’526 and ’109 patents against Mentor, and the district court consolidated the suit with another involving Mentor’s ’882 patent.

The ’376 patent was the only patent put before the jury at the district court, which found in favour of Mentor and found damages of approximately $36 million.

Before this trial, the district court had granted summary judgment barring Synopsys from challenging the ’376 patent’s validity because of assignor estoppel.

It also granted Synopsys’ motion precluding Mentor from introducing evidence of wilful infringement.

Synopsys appealed against the infringement verdict, the damages award, and the summary judgment of assignor estoppel. Mentor cross-appealed against the motion regarding wilfulness.

Both Synopsys and Mentor also appealed against the removal of the other patents before trial. The patents had been excluded by the district court for a number of different reasons.

Circuit Judge  Kimberly Moore, on behalf of the court, said that there was “substantial evidence” to support the jury’s infringement verdict regarding the ’376 patent, while affirming the damages award.

The judgment that Synopsys’ ‘109 patent was indefinite was reversed by the court, although it affirmed the judgment that the ‘526 patent lacked patent-eligible subject matter.

It also reversed the judgment that Mentor’s ‘882 lacked written description support and the judgment that Mentor’s infringement allegations regarding the ’531 and ’176 patents were barred by claim preclusion.

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