DCT

8:20-cv-00490

Sharp Corp v. Vizio Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 8:20-cv-00490, C.D. Cal., 03/10/2020
  • Venue Allegations: Plaintiff alleges venue is proper in the Central District of California because Defendant Vizio is a California corporation with a regular and established place of business in the district. Venue over the foreign TPV and CHOT defendants is alleged based on their business activities directed at the district, including shipping infringing products through California ports, and because they are foreign entities.
  • Core Dispute: Plaintiff alleges that Defendants’ LCD televisions, which are manufactured by TPV entities using LCD panels supplied by CHOT and sold under the Vizio brand, infringe a portfolio of twelve U.S. patents related to liquid crystal display technology and manufacturing processes.
  • Technical Context: The asserted patents relate to Multi-domain Vertical Alignment (MVA) and Polymer Sustained Alignment (PSA) technologies, which are foundational for modern high-performance LCDs that offer wide viewing angles and fast response times for consumer electronics.
  • Key Procedural History: The complaint alleges that Defendant Vizio has been on notice of its infringement of at least U.S. Patent No. 6,937,300 since January 24, 2011, by virtue of a notice provided to Vizio in a prior International Trade Commission (ITC) investigation. This prior notice may be central to Plaintiff's allegations of willful infringement.

Case Timeline

Date Event
2000-09-27 Earliest Priority Date for ’994, ’490, ’239, ’275 Patents
2001-03-30 Earliest Priority Date for ’704, ’634 Patents
2001-10-02 Earliest Priority Date for ’300, ’206, ’959 Patents
2003-03-18 Earliest Priority Date for ’907 Patent
2005-01-06 Priority Date for ’079 Patent
2005-08-30 U.S. Patent No. 6,937,300 Issues
2005-12-20 U.S. Patent No. 6,977,704 Issues
2008-07-11 Priority Date for ’556 Patent
2008-11-11 U.S. Patent No. 7,450,206 Issues
2011-01-24 Vizio allegedly put on notice of ’300 Patent via ITC Investigation
2011-10-25 U.S. Patent No. 8,044,907 Issues
2013-05-21 U.S. Patent No. 8,446,556 Issues
2013-06-25 U.S. Patent No. 8,471,994 Issues
2013-09-10 U.S. Patent No. 8,531,634 Issues
2013-10-15 U.S. Patent No. 8,558,959 Issues
2014-08-05 U.S. Patent No. 8,797,490 Issues
2014-08-12 U.S. Patent No. 8,804,079 Issues
2015-07-14 U.S. Patent No. 9,081,239 Issues
2015-12-01 U.S. Patent No. 9,201,275 Issues
2018-11-26 Alleged shipment of infringing LCD panels to Long Beach, CA
2019-11-15 CHOT and TPV Defendants allegedly put on notice of infringement
2020-01-23 CHOT allegedly put on notice of infringement of additional patents
2020-03-10 Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 6,937,300 - LIQUID CRYSTAL DISPLAY DEVICE AND METHOD OF FABRICATING THE SAME

Issued August 30, 2005

The Invention Explained

  • Problem Addressed: The patent’s background describes manufacturing defects in active matrix LCDs, such as bus line breaks or shorts, and shifts in thin-film transistor (TFT) threshold values caused by exposure to ultraviolet (UV) radiation during production (ʼ300 Patent, col. 1:65-2:10). These defects result in non-uniform brightness and display artifacts.
  • The Patented Solution: The invention is a method for fabricating an LCD device that controls the initial alignment of liquid crystal molecules by polymerizing a photosensitive material mixed into the liquid crystal composition. The method involves creating fine slits in the pixel electrodes to define sub-regions, filling the device with a liquid crystal composition containing a UV-curable resin, and then radiating UV light while applying a specific voltage to set the tilt direction of the liquid crystal molecules (’300 Patent, Claim 1; Abstract; col. 9:39-66). This process, known as Polymer Sustained Alignment (PSA), creates multiple alignment domains within each pixel, which improves viewing angle stability.
  • Technical Importance: This fabrication method provided a way to achieve wide viewing angles and stable operation in MVA-type LCDs, addressing key performance limitations of earlier display technologies (’300 Patent, col. 2:11-20).

Key Claims at a Glance

  • The complaint asserts infringement of independent method claim 1 (Compl. ¶118).
  • The essential steps of claim 1 include:
    • Forming a common electrode and color filter layer on a first substrate.
    • Constructing a second substrate comprising an array with gate and drain bus lines and a pixel electrode layer.
    • Forming fine slits in the pixel electrode layer to divide a pixel into at least two sub-regions.
    • Forming a vertical alignment film on each of the two substrates.
    • Forming a liquid crystal layer by filling the gap with an n-type liquid crystal composition containing an ultraviolet curable resin.
    • Radiating ultraviolet light while applying a voltage not smaller than a threshold value to the liquid crystal molecules to define their tilt direction.
    • Arranging two polarizers in a crossed Nicol configuration.
  • The complaint reserves the right to assert additional claims by alleging infringement of "at least claim 1" (Compl. ¶118).

U.S. Patent No. 6,977,704 - LIQUID CRYSTAL DISPLAY

Issued December 20, 2005

The Invention Explained

  • Problem Addressed: The patent identifies a drop in transmittance (i.e., brightness) and slow response characteristics as problems in conventional MVA-mode LCDs, which arise from the physical structures used to define the alignment of liquid crystal molecules (’704 Patent, col. 1:1-11, 2:1-5).
  • The Patented Solution: The patent claims a liquid crystal display device that incorporates a "cured material" within the liquid crystal layer itself. This material forms a "liquid crystal skeleton" that is fixed in a tilted state relative to the substrate. This pre-tilted skeleton then regulates the alignment direction of the surrounding liquid crystal molecules when a voltage is applied, improving response speed (’704 Patent, Abstract; col. 4:1-10).
  • Technical Importance: This invention provides a structural solution to improve the response speed of MVA displays, a critical factor for reducing motion blur in televisions and monitors, thereby enhancing the user experience for dynamic content (’704 Patent, col. 1:20-25).

Key Claims at a Glance

  • The complaint asserts infringement of independent apparatus claim 1 (Compl. ¶141).
  • The essential elements of claim 1 include:
    • A pair of substrates arranged opposite each other.
    • Vertical alignment films formed between the substrates.
    • A liquid crystal layer sealed between the films and having a negative dielectric anisotropy.
    • An "alignment regulating structural member" on at least one substrate for regulating the alignment direction of liquid crystal molecules when voltage is applied.
    • A "cured material" within the liquid crystal layer that includes a "liquid crystal skeleton formed in a state where the skeleton is tilted to the substrate for tilting the liquid crystal molecules."
  • The complaint reserves the right to assert additional claims by alleging infringement of "at least claim 1" (Compl. ¶141).

U.S. Patent No. 7,450,206 - LIQUID CRYSTAL DISPLAY DEVICE AND METHOD OF FABRICATING THE SAME

  • Patent Identification: U.S. Patent No. 7,450,206, issued November 11, 2008 (Compl. ¶49).
  • Technology Synopsis: This patent addresses display defects caused by variations in the alignment of liquid crystal molecules. The claimed solution is an LCD device structure where a pixel electrode includes at least two slit areas separated by a "liquid crystal domain boundary area," and an additional electrode with the same potential as the pixel electrode is formed in that boundary area to stabilize alignment (’206 Patent, Abstract).
  • Asserted Claims: Independent apparatus claim 2 is asserted (Compl. ¶163).
  • Accused Features: The accused CV700U1-T01 panel is alleged to have the claimed pixel electrode with slit areas, a liquid crystal domain boundary, and an additional electrode within that boundary area (Compl. ¶¶ 167-168).

U.S. Patent No. 8,044,907 - LIQUID CRYSTAL DISPLAY AND METHOD OF MANUFACTURING THE SAME

  • Patent Identification: U.S. Patent No. 8,044,907, issued October 25, 2011 (Compl. ¶53).
  • Technology Synopsis: The patent targets improved viewing angle characteristics by dividing each pixel into multiple "divisional areas." A polymer formed between the substrates determines the tilt direction of the liquid crystal molecules, and the key innovation is that the threshold voltage required to tilt the molecules in a first divisional area is different from the threshold voltage in a second divisional area (’907 Patent, Abstract).
  • Asserted Claims: Independent apparatus claim 1 is asserted (Compl. ¶184).
  • Accused Features: The accused panel is alleged to have pixels divided into divisional areas, a polymer that determines tilt direction, and different threshold voltages between these areas (Compl. ¶¶ 187, 192).

U.S. Patent No. 8,446,556 - FLEXIBLE PRINTED CIRCUIT AND ELECTRIC CIRCUIT STRUCTURE

  • Patent Identification: U.S. Patent No. 8,446,556, issued May 21, 2013 (Compl. ¶57).
  • Technology Synopsis: This patent addresses the physical connection between a flexible printed circuit (FPC) and an electric circuit substrate (like an LCD panel). The invention claims a structure where the terminals on the FPC have a narrowed portion extending to the edge of the film, with the width of this narrowed portion being smaller than the spacing of the electrode terminals on the substrate, to prevent short-circuits from manufacturing debris (’556 Patent, Abstract).
  • Asserted Claims: Independent apparatus claim 1 is asserted (Compl. ¶208).
  • Accused Features: The electrical circuit structure of the accused panel is alleged to include a flexible printed circuit with terminals having narrowed portions that connect to the electrode terminals of the circuit substrate (Compl. ¶¶ 210-211).

Additional patents are asserted but are not analyzed in detail per the prompt instructions for multi-patent cases.

III. The Accused Instrumentality

Product Identification

  • The primary accused end-product is the Vizio V705-G1 LCD TV (Compl. ¶94). The complaint alleges this television incorporates infringing component parts, including the 750TBV700U11Q8N000 LCD Module manufactured by TPV Defendants and the CV700U1-T01 LCD Panel manufactured by Defendant CHOT (Compl. ¶¶ 89, 91, 101).

Functionality and Market Context

  • The complaint alleges the accused CHOT LCD Panel utilizes advanced features to achieve high performance. These include pixels divided into a plurality of sub-areas with dedicated electrodes for applying voltage (Compl. ¶103), a polymer layer to assist in liquid crystal alignment and establish a pre-tilt angle, and micro-structures within the pixels to create multiple tilt directions for the liquid crystal molecules when voltage is applied (Compl. ¶105). The complaint asserts these combined features result in a superior viewing experience with faster response times, wider viewing angles, and greater contrast for the end user (Compl. ¶105). The complaint provides a photograph of a circuit board inside the accused television showing the "CHOT" brand, indicating CHOT as the supplier of the LCD panel (Compl. p. 7).

IV. Analysis of Infringement Allegations

6,937,300 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a method of fabricating a liquid crystal display device, comprising: forming a common electrode and a color filter layer on a first substrate; The manufacturing process of the CV700U1-T01 includes forming a common electrode and color filter layer on a first substrate. ¶119 col. 5:39-44
constructing a second substrate from an array substrate on which are formed a gate bus line layer, a gate insulating film layer, a drain bus line layer, a protective film layer, and a pixel electrode layer; The manufacturing process of the CV700U1-T01 includes constructing an array substrate with the specified layers. ¶120 col. 6:2-7
forming fine slits in the pixel electrode layer in such a direction that a pixel is divided by the slits into at least two sub-regions; The manufacturing process includes forming fine slits in the pixel electrode layer, dividing pixels into sub-regions. Microscopic images provided in the complaint depict these structures. (Compl. p. 22). ¶121 col. 9:39-42
forming on each of the two substrates a vertical alignment film for vertically aligning liquid crystal molecules; The manufacturing process includes forming a vertical alignment film on each substrate to vertically align the liquid crystal molecules. ¶122 col. 9:43-46
forming a liquid crystal layer by filling an n-type liquid crystal composition having a negative dielectric anisotropy into a gap between the two substrates, the liquid crystal composition containing an ultraviolet curable resin having a liquid crystal backbone; The manufacturing process includes forming a liquid crystal layer by filling the gap with an n-type liquid crystal composition that contains a UV-curable resin. ¶123 col. 9:47-54
radiating ultraviolet light while applying to the liquid crystal molecules a voltage not smaller than a threshold value of the liquid crystal molecules, thereby defining the direction in which the liquid crystal molecules tilt in the presence of an applied voltage; The manufacturing process includes radiating UV light while applying a voltage greater than the threshold value to the liquid crystal molecules, which defines their tilt direction. ¶124 col. 9:55-61

Identified Points of Contention for ’300 Patent

  • Evidentiary Questions: The allegations are for a method of fabrication. A central dispute may be whether Plaintiff can obtain evidence to prove that the specific manufacturing processes used by Defendants—allegedly in Mexico and China (Compl. ¶¶ 96-97)—perform each step of the claimed method. For example, proving the precise voltage applied during UV radiation (Compl. ¶124) will require discovery into Defendants' confidential manufacturing operations.
  • Scope Questions: The interpretation of "fine slits" that divide a pixel into "sub-regions" may be a point of contention. Defendants might argue that the structures in their accused panels, shown in the complaint's microscopic images (Compl. p. 22), do not meet the definition of "slits" as understood from the patent's specification and figures.

6,977,704 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a liquid crystal display device, comprising: a pair of substrates having a predetermined cell gap and arranged opposite to each other; The CV700U1-T01 is an LCD device that includes a pair of substrates arranged opposite each other with a predetermined cell gap. ¶143 col. 2:30-33
vertical alignment films formed between the pair of substrates; The CV700U1-T01 includes vertical alignment films formed between the substrates. ¶144 col. 2:33-34
a liquid crystal layer sealed between the vertical alignment films and having a negative dielectric anisotropy; The CV700U1-T01 includes a liquid crystal layer with negative dielectric anisotropy sealed between the alignment films. ¶145 col. 1:44-47
an alignment regulating structural member arranged on at least one of the pair of substrates, for regulating a total alignment direction of liquid crystal molecules...at a time of voltage application; The CV700U1-T01 allegedly includes an alignment regulating structural member, such as the micro-structures shown in the complaint (Compl. p. 22), to regulate the alignment direction of the liquid crystal molecules. ¶146 col. 2:40-45
a cured material provided in the liquid crystal layer and including a liquid crystal skeleton formed in a state where the skeleton is tilted to the substrate for tilting the liquid crystal molecules. The CV700U1-T01 is alleged to include a cured polymer layer that forms a tilted "liquid crystal skeleton" within the liquid crystal layer, which assists in tilting the liquid crystal molecules. ¶147 col. 4:1-10

Identified Points of Contention for ’704 Patent

  • Technical Questions: A key technical dispute will likely involve whether the "polymer layer" alleged to be in the accused devices (Compl. ¶105) meets the structural and functional requirements of the claimed "cured material provided in the liquid crystal layer and including a liquid crystal skeleton." The analysis may turn on expert testimony regarding the composition and morphology of the polymer within the accused panels.
  • Scope Questions: The term "alignment regulating structural member" could be subject to construction. While the patent provides examples like protrusions and slits, the claim language is broad. The court may need to determine whether the micro-structures depicted in the complaint (Compl. p. 22) fall within the scope of this term as defined by the patent's intrinsic evidence.

V. Key Claim Terms for Construction

Term: "liquid crystal skeleton" (from ’704 Patent, Claim 1)

  • Context and Importance: This term is central to the asserted claim of the ’704 Patent. The infringement analysis will depend entirely on whether the polymer material in the accused LCD panels can be characterized as forming a "liquid crystal skeleton" that is "tilted to the substrate." Practitioners may focus on this term because it is not a standard industry term and its meaning must be derived from the patent itself.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The abstract describes the skeleton functionally, stating it is for "tilting the liquid crystal molecules" (’704 Patent, Abstract). This could support an interpretation covering any cured polymer structure that achieves this function.
    • Evidence for a Narrower Interpretation: Figure 1A of the patent depicts the "LIQUID CRYSTAL SKELETON" as a network-like structure formed from a "MAIN CHAIN" of a polymer (’704 Patent, Fig. 1A). This specific depiction could support a narrower construction limited to polymer networks with a discernible backbone structure formed in situ within the liquid crystal layer.

Term: "forming fine slits in the pixel electrode layer" (from ’300 Patent, Claim 1)

  • Context and Importance: This method step defines a key structural feature intended to create multiple alignment domains. The dispute may turn on what constitutes a "slit" versus other types of openings or patterns in an electrode. The microscopic images of the accused panel's pixel structure will be critical evidence (Compl. p. 22).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification explains that the purpose of the slits is to generate an "oblique electric field" to control the tilt direction of the liquid crystal molecules (’300 Patent, col. 9:39-42). This functional language may support a broader definition that includes any electrode void that achieves this effect.
    • Evidence for a Narrower Interpretation: The patent's figures, such as Figure 39, illustrate specific V-shaped patterns of slits dividing a pixel into four quadrants. Defendants may argue that the term "slits" should be construed as being limited to the elongated, linear voids depicted in the preferred embodiments, rather than any electrode patterning.

VI. Other Allegations

Indirect Infringement

  • The complaint alleges that Defendant CHOT induces infringement by supplying infringing LCD panels to downstream customers like the TPV Defendants and Vizio, with the knowledge and intent that these components will be incorporated into televisions sold in the United States (Compl. ¶¶ 128-129). Similar allegations are made against the TPV Defendants for supplying infringing modules to Vizio.

Willful Infringement

  • Willfulness is alleged against all Defendants based on both pre-suit and post-suit knowledge. For Defendant Vizio, pre-suit knowledge of the ’300 Patent is alleged to date back to a 2011 ITC investigation (Compl. ¶111). For CHOT and TPV, pre-suit knowledge is alleged based on notice letters sent in November 2019 and January 2020 (Compl. ¶¶ 106-107, 109). The complaint alleges that continued infringement after receiving these notices and after the filing of the complaint is reckless and willful (Compl. ¶133).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of claim construction and technical equivalence: can the patent term "liquid crystal skeleton," which is defined by specific structural and functional descriptions in the patent, be construed to cover the "polymer layer" and "micro-structures" allegedly present in the accused LCD panels? The outcome may depend on whether there is a fundamental mismatch in technical operation and structure between the patented invention and the accused products.
  • A key evidentiary question will be one of proof of process: for the asserted method claims, can Sharp produce evidence from Defendants' foreign manufacturing facilities sufficient to prove that every step of the claimed fabrication process—including specific voltage and UV radiation parameters—is practiced in the creation of the accused products?
  • A central question for damages will be one of willfulness: did Vizio's alleged awareness of the ’300 Patent since a 2011 ITC proceeding, and the other Defendants' alleged awareness since late 2019, render their subsequent alleged infringement willful, thereby exposing them to the possibility of enhanced damages?