Litigation

Realtek Semiconductor Corp. v. LSI Corporation et al.

judgment

C-12-03451

Filed
2012-06-29

Patents at issue (2)

6452958
6707867

Summary

RAND/breach-of-contract action by Realtek against LSI and Agere, alleging breach of RAND/Letter-of-Assurance obligations by suing Realtek at the ITC before offering a RAND license. The '958 and '867 patents were the declared IEEE 802.11 standards-essential patents at issue; a jury awarded Realtek $3,825,000, and the verdict was upheld after post-trial motions.

Case overview & background

Plain-language overview of the case: parties, accused product, patents at issue, and why the suit matters.

I'll verify the docket, parties, patents, and outcome before drafting.

Now let me pin down the '867 patent's subject matter, the ITC parallel, and any PTAB/IPR activity.

Overview and background

A framing note first: the N.D. Cal. case in the metadata (No. 5:12-cv-03451-RMW) is not itself a patent infringement suit. Its nature-of-suit code is "Other Contract," and Realtek was the plaintiff suing for breach of the RAND/Letter-of-Assurance contract, promissory estoppel, and declaratory judgment (Realtek's § 17200 UCL claim was dismissed, Dkt. 41). The infringement allegations against Realtek lived in the parallel ITC investigation, Inv. No. 337-TA-837, which the same two patents anchored. So the "accused product" story and the "breach of RAND" story have to be told together.

Parties. Realtek Semiconductor Corp. is a Hsinchu, Taiwan–based fabless IC designer and one of the major suppliers of Ethernet and Wi-Fi/WLAN chipsets — an operating company, not an NPE. LSI Corporation (Delaware, principal place of business in Milpitas, California, inside the N.D. Cal. venue) was a semiconductor and storage-component maker; Agere Systems LLC (Allentown, Pennsylvania) was its wholly owned subsidiary and the nominal owner/assignee of record of the two patents ('958 to Agere Systems Guardian Corp., '867 to Agere Systems, Inc., per the ITC's final ID). Neither defendant is a PAE: this was an operating-company SEP assertion campaign, and LSI/Agere ran parallel ITC actions against several chipmakers and their customers (the '837 respondents included Funai, MediaTek, Ralink and Realtek; Agere also litigated the same family against Sony in E.D. Tex.). Market context worth noting: LSI itself was acquired by Avago (now Broadcom) in 2014–15, which is one reason the litigation was ultimately settled rather than appealed to judgment.

Accused technology. The accused products were Realtek's 802.11/WLAN chipsets as incorporated into third-party end products — digital televisions, DVD/Blu-ray players and recorders, and home-theater systems imported into the United States (Funai's devices were the principal end products). The dispute was as much about the royalty base as infringement: LSI's June 20, 2012 "RAND proposal" reportedly sought roughly 5% of the end product price, which Realtek argued was inherently unreasonable because it exceeded the selling price of the chip Realtek actually supplies — the entire-market-value problem in SEP licensing.

Patents. (1) U.S. 6,452,958 B1, "Digital modulation system using extended code set" — a physical-layer modulation scheme using extended code sets for high-rate 802.11b WLAN signaling; priority date was contested (the Commission rejected the 1996 parent-application date and treated the April 22, 1998 filing date as controlling). (2) U.S. 6,707,867 B2, "Wireless local area network apparatus" — an 802.11 WLAN station/apparatus claim set; it expired February 23, 2014, which mooted the ITC case as to that patent. Both were declared essential to IEEE 802.11 via 2003 and 2004 Letters of Assurance in which Agere represented it was "prepared to grant a license to an unrestricted number of applicants on a worldwide, non-discriminatory basis and on reasonable terms and conditions."

Procedural posture and why the venue mattered. Filed June 29, 2012 in the San Jose Division; Magistrate Judge Howard R. Lloyd initially, with Judge Ronald M. Whyte presiding. Venue was natural — LSI's headquarters is in Milpitas, and N.D. Cal. was the epicenter of SEP/RAND litigation; Judge Whyte was also one of the few judges willing to decide RAND questions on summary judgment rather than defer them. Key beats: on May 20, 2013 the court granted Realtek partial summary judgment on breach of contract — holding that filing the § 337 action before offering a RAND license was a per se breach — and entered a conditional preliminary injunction barring LSI/Agere from enforcing any ITC exclusion order (Realtek Semiconductor Corp. v. LSI Corp., 946 F. Supp. 2d 998 (N.D. Cal. 2013)). LSI's interlocutory appeal (9th Cir. No. 13-16070) was dismissed as moot on March 20, 2014, after the ITC terminated the investigation. An eleven-day jury trial ran from February 10, 2014; the February 26, 2014 verdict awarded Realtek $3,825,000 in contract damages (largely reimbursement of its ITC defense costs) and set RAND rates of 0.12% ('958) and 0.07% ('867) of the U.S. sales price of Realtek's accused chips — about 0.19% combined. On June 16, 2014 Judge Whyte denied both sides' JMOL motions, denied a permanent injunction as too speculative given the ITC's no-violation outcome, granted modified declaratory relief fixing those rates, and entered final judgment for Realtek (2014 WL 2738216 and 2014 WL 2738226; Dkt. 364). Reporting indicates the parties settled while the judgment was on appeal to the Ninth Circuit (secondary source: The Sedona Conference materials; I could not verify the settlement terms).

Why it's notable. Three reasons. (a) It was, per Law360's contemporaneous reporting, the first case in which a jury determined RAND royalty terms — a rare data point on component-level versus end-product royalty bases. (b)

Key legal developments & outcome

Major rulings, motions, claim construction, settlements, and the present posture or final disposition.

I'll research this case systematically across docket sources, opinions, and PTAB records.

Bottom line

Realtek Semiconductor Corp. v. LSI Corp., No. C‑12‑03451‑RMW (N.D. Cal., Judge Ronald M. Whyte) was not an infringement case — it was a breach‑of‑contract / declaratory‑judgment action over RAND obligations arising from LSI/Agere's ITC complaint. The district court held as a matter of law that LSI breached its IEEE Letters of Assurance by filing the ITC action before offering Realtek a RAND license, preliminarily enjoined enforcement of any ITC exclusion order (a first), and then tried the RAND rate and contract damages to a jury. The February 26, 2014 verdict (0.12% + 0.07% = 0.19% combined, plus $3,825,000 in damages) survived cross‑motions for JMOL, and final judgment was entered June 16, 2014. No Markman, no IPR stay, no settlement.

Chronology

1. Filing and pleadings (2012)

Date Event
2012‑03‑07 LSI letter to Realtek asserting the '958 and '867 patents; no license offer, only a cease‑and‑desist demand.
2012‑03‑12 LSI/Agere file ITC complaint; investigation 337‑TA‑837 instituted 2012‑04‑11 (limited exclusion order + cease‑and‑desist sought).
2012‑05‑24 Realtek requests a RAND license; LSI responds 2012‑06‑20 with a proposal Realtek deems non‑RAND (end‑product based, allegedly exceeding chip price).
2012‑06‑29 Realtek files suit in N.D. Cal. (San Jose), asserting (1) breach of contract, (2) promissory estoppel, (3) declaratory judgment of RAND terms / unenforceability, and (4) UCL violation, Cal. Bus. & Prof. Code § 17200.
Late 2012 (Dkt. 41) Order on LSI/Agere's motion to dismiss: three claims sustained; § 17200 UCL claim dismissed. (I could not pin the exact date of Dkt. 41 — treat as unverified.)
Aug.–Sept. 2012 LSI/Agere answer and counterclaims seeking declarations that they complied with RAND, that Realtek rejected/repudiated a RAND license, and that they retain the right to seek ITC/judicial injunctive relief, plus costs/fees. (Pleadings confirmed in substance by the Sept. 26, 2013 order, Dkt. 167; exact answer date not verified.)

2. Pre‑trial motions of substance (2013)

  • 2013‑03‑26 — Realtek moves for partial summary judgment on breach of contract plus an injunction against enforcement of any ITC exclusion order. LSI cross‑moves for a stay pending the ITC investigation and, in the alternative, Rule 56(d) relief.
  • 2013‑05‑01 (Dkt. 92) — Discovery order on Dispute Joint Reports Nos. 1 & 2: LSI ordered to identify ~1,200 standard‑related licenses by name and date by May 8, 2013, with Realtek to select 30 licenses for production within 20 days

Plaintiff representatives

Counsel of record for the plaintiff(s): attorneys, firms, and roles (lead counsel, of counsel, local counsel).

I'll research the docket and counsel records for this case.

Good initial leads. Let me pull the docket record and verify each attorney's role and firm details.

Counsel of Record for Plaintiff Realtek Semiconductor Corp.

Bottom line: Realtek was represented throughout this case by a single firm — Reed Smith LLP — with no separate local-counsel or in-house appearance on the docket. The Reed Smith team signature blocks appear unchanged from the first case-management filings (Sept. 2012) through the eve of the February 2014 trial, and the same lead attorney (Scott D. Baker) is listed as appellee's counsel on the Ninth Circuit appeal (No. 13-16070).

Attorneys appearing for Realtek

# Name (SBN) Role Firm / Office Note
1 Scott D. Baker (84923) Lead counsel — first-named in every Reed Smith signature block; Realtek's named counsel in press/docket reporting; counsel of record for Realtek as Appellee in the 9th Cir. appeal Reed Smith LLP, Palo Alto (1510 Page Mill Rd., Suite 110, Palo Alto, CA 94304) Reed Smith IP litigator; argued the RAND/breach theory that produced the May 20, 2013 partial summary judgment and preliminary injunction (946 F. Supp. 2d 998).
2 James A. Daire (239637) Principal day-to-day counsel — signed nearly all joint stipulations and CMCs; his declaration (with Exhibits D, 67‑6, 67‑8, 67‑15/16) was the evidentiary backbone of Realtek's partial MSJ Reed Smith LLP, San Francisco (101 Second St., Suite 1800, San Francisco, CA 94105) Made partner in Reed Smith's IP group (SF) in 2013; the Reed Smith attorney whose name appears most often on the docket.
3 William R. Overend (180209) Senior team member / signing attorney on the pretrial and trial-era filings (e.g., Dkt. 219 signature page: "/s/ William R. Overend") Reed Smith LLP, Palo Alto Long-tenured Reed Smith IP litigator; on the CM/ECF service list for Realtek from 2013 onward (Dkt. 92).
4 Steven S. Baik (184622) Team member (listed in Reed Smith signature blocks and on the court's e-service list) Reed Smith LLP, Palo Alto Appears on Dkt. 92 (May 1, 2013 discovery order service list) and the Dkt. 219 signature page. Note: I could not independently verify his individual bio/past-cases in this review.
5 Adrian Sue Shin (256960) Associate-level team member; e-service contact for Realtek Reed Smith LLP, San Francisco Listed in the Reed Smith signature block on the Sept. 13, 2012 ADR stipulation (Dkt. 39) and on the Dkt. 92 service list.
6 Carina M. Tan (185015) Associate-level team member Reed Smith LLP, Palo Alto Listed on the Dkt. 219 signature page among Realtek's attorneys. Bio not independently verified in this review.

Sourcing

Caveats and things I could not verify

  • "Lead counsel" designation: N.D. Cal. civil dockets in 2012–14 did not carry a formal "lead attorney" flag in the CM/ECF entry the way some districts do. My designation of Baker as lead counsel rests on (a) his first-position placement in every Reed Smith signature block, (b) his being the named Realtek counsel in docket-derived reporting (e.g., VitalLaw's case note: "Scott D. Baker (Reed Smith LLP) for Realtek Semiconductor Corporation"), and (c) his appearance for Realtek in the Ninth Circuit. Daire, by contrast, was the attorney who actually filed and signed the bulk of the papers — so if by "lead" you mean "attorney who ran the case day to day," Daire is the better answer.
  • No substitution of counsel appears in the filings I reviewed; Reed Smith remained record counsel through the June 16, 2014 final judgment. If a substitution occurred after judgment (e.g., for a Federal Circuit or collateral proceeding), I did not locate it.
  • No Realtek in-house attorney (e.g., a Realtek legal-department lawyer appearing pro hac vice) shows up on the docket entries reviewed. Realtek's corporate disclosure statements were handled through Reed Smith.
  • Nothing indicates sealed or withdrawn appearances. Several substantive exhibits were filed under seal (e.g., the June 20, 2012 RAND proposal, Dkt. 67‑16), but counsel listings themselves are public.
  • Individual bios: I confirmed Baker's, Daire's, Overend's, Shin's, Baik's, and Tan's participation from the documents above. I was unable to pull independent firm-bio pages for Baik and Tan within this session, so I have deliberately not attributed specific past cases to them. Any statement about their broader patent-litigation track records should be checked against Reed Smith's site or a litigation database before relying on it.

Defendant representatives

Counsel of record for the defendant(s): attorneys, firms, and roles (lead counsel, of counsel, local counsel).

I'll research the docket and counsel appearances for the defendants in this case.

I have initial names. Let me pull the docket sheet and counsel appearance records.

Let me access the actual docket sheet to confirm appearances and any additional counsel.

Counsel of record for Defendants LSI Corporation and Agere Systems LLC

Captured from: publicly available filed documents in Realtek Semiconductor Corp. v. LSI Corp., No. 5:12-cv-03451-RMW (N.D. Cal., San Jose Div., Judge Ronald M. Whyte), hosted on Justia/CourtListener, cross-checked against secondary reporting (Bloomberg BNA/IP Law Daily attorney lines; VitalLaw). I could not pull the PACER docket sheet itself in this session, so the list below is what is affirmatively documented in signed filings rather than a complete ECF "Attorneys to be Noticed" export — see the caveats at the end.

One framing correction: despite the patent numbers in the caption, this was not an infringement action. Realtek pleaded breach of contract, promissory estoppel, declaratory judgment, and (dismissed) § 17200 UCL claims arising from the IEEE Letters of Assurance covering U.S. Pat. Nos. 6,452,958 and 6,707,867. Dkt. 92 (May 1, 2013) at 1–2. That matters for scoping counsel experience below — this was a RAND/contract team, not a claim-construction team.

The team: Kilpatrick Townsend & Stockton LLP (both defendants, jointly)

Attorney Role Firm / office Note
David E. Sipiora (SBN 124951) Lead counsel of record; the name carried on every substantive defense filing, including the MSJ opposition and the signature block for both defendants Kilpatrick Townsend & Stockton LLP, 1400 Wewatta St., Suite 600, Denver, CO 80202 Harvard J.D. 1986; admitted CA, CO, NY, D.C.; described in a later IPR pro hac vice declaration as having been "involved in more than one hundred patent litigations," with jury-trial, Markman and Federal Circuit argument experience. He was simultaneously Kilpatrick's lead for LSI/Agere in the parallel ITC Investigation No. 337-TA-837 on the same '958/'867 patents and later lead counsel for LSI/Avago in Regents of the Univ. of Minnesota v. LSI, No. 0:16-cv-02891 (D. Minn.) and the accompanying IPRs.
Robert J. Artuz (SBN 227789) Local / Bay Area counsel of record; co-signed the defense signature blocks (e.g., the ADR stipulation, where he also gave the Civil L.R. 5-1(i) filer's attestation) Kilpatrick Townsend & Stockton LLP, 1080 Marsh Road, Menlo Park, CA 94025 The California-barred, Bay Area–anchored member of the team; also appearing with Sipiora for LSI in Rambus Inc. v. LSI Corp., No. 3:10-cv-05446 (N.D. Cal.). Publicly available biographical detail on him is thin relative to Sipiora's.
Charles A. ("Chad") Pannell, III Of counsel / supporting counsel, admitted pro hac vice (his filings expressly note "Appearing Pro Hac Vice") Kilpatrick Townsend & Stockton LLP, 1100 Peachtree St., Atlanta, GA 30309 The evidentiary workhorse on the dispositive motions: his declaration (Dkt. 78-5, cited throughout as "Pannell Decl.") supported LSI/Agere's opposition to Realtek's partial summary judgment motion, e.g. attaching the June 20, 2012 "RAND proposal" email. Named a Managing IP "IP Star" for 2017.

Sourcing for each appearance

  • Sipiora + Artuz — Dkt. 39, Stipulation and [Proposed] Order Selecting ADR Process (dated Sept. 13, 2012), signature block: "KILPATRICK TOWNSEND & STOCKTON LLP … /s/ Robert J. Artuz … David E. Sipiora, Robert J. Artuz, Attorneys for Defendants LSI CORPORATION and AGERE SYSTEMS LLC." Same block repeated in Dkt. 128 and Dkt. 152.
  • Pannell — Dkt. 128 signature block ("CHARLES A. PANNELL, III (Appearing Pro Hac Vice), 1100 Peachtree St., Atlanta, GA"); Declaration cited at Dkt. 78-5 in LSI/Agere's Opposition to Plaintiff's Motion for Partial Summary Judgment (Dkt. 77, filed Apr. 9, 2013).
  • Secondary confirmation — Bloomberg BNA/IP Law Daily's reports on the Oct. 10, 2012 MTD ruling and the June 16, 2014 post-trial ruling both list "Charles Adam Pannell, III (Kilpatrick Townsend & Stockton LLP) for LSI Corp. and Agere Systems, LLC."

Caveats and things I did not find

  • Both defendants were represented by one team. No separate Agere-only counsel appears in any filing I reviewed; the signature blocks read "Attorneys for Defendants LSI CORPORATION and AGERE SYSTEMS LLC" throughout.
  • No in-house counsel of record. I found no LSI or Agere legal-department attorney entering an appearance on the public docket. That is not a positive finding of absence — in-house lawyers frequently appear only on the Rule 26(f) report or not at all, and those documents were not all reviewed.
  • The full ECF noticed-attorney list is unverified. Kilpatrick later staffed this client with overlapping attorneys (April E. Isaacson, Kristopher L. Reed, Edward J. Mayle) in Regents of Univ. of Minnesota v. LSI and in the 2018 LSI/Avago matters, and Sipiora/Reed handled the LSI/Avago cert-stage filings in 2019. I have not confirmed that Isaacson, Reed, or Mayle ever entered an appearance in this 2012 case, and I am not listing them as counsel here.
  • Ninth Circuit appeal. LSI/Agere appealed the May 20, 2013 preliminary injunction (No. 13-16070); the appeal was dismissed as moot on March 20, 2014 after the ITC found no § 337 violation. I did not verify the appellate appearance list, though it was almost certainly the same Kilpatrick team.
  • Nothing sealed in a way that affects this list. The RAND proposals and license terms were filed under seal (see Dkt. 92), but the counsel signature blocks are on the public versions.

Verification note: firm/office addresses are as printed in the 2012–2014 filings, not current firm directories — Kilpatrick's Denver and Menlo Park/San Francisco addresses have since changed, so treat these as the addresses "of record" in this case rather than today's.