DCT
5:20-cv-09341
Applied Materials Inc v. Demaray LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Applied Materials, Inc. (Delaware)
- Defendant: Demaray LLC (Delaware)
- Plaintiff’s Counsel: Paul Hastings LLP
- Case Identification: 5:20-cv-09341, N.D. Cal., 12/24/2020
- Venue Allegations: Plaintiff Applied Materials alleges venue is proper in the Northern District of California because it conducts research and uses the accused reactors in the district, and Defendant Demaray is subject to personal jurisdiction based on its business contacts and patent enforcement activities directed at companies headquartered in the district.
- Core Dispute: Plaintiff, a manufacturer of semiconductor processing equipment, seeks a declaratory judgment that its reactors do not infringe Defendant’s patents related to film deposition, following lawsuits filed by Defendant against Plaintiff's major customers for their use of the equipment.
- Technical Context: The technology at issue is biased pulse DC reactive sputtering, a sophisticated method for depositing high-quality thin oxide films, which is a fundamental process in the manufacturing of semiconductors and optical components.
- Key Procedural History: This declaratory judgment action follows a prior, dismissed action between the same parties. Defendant Demaray LLC initially sued Plaintiff’s customers, Intel and Samsung, for patent infringement. In response, Applied Materials filed a declaratory judgment action, which was dismissed after Demaray argued its infringement allegations were limited to post-installation modifications made by the customers, not Applied Materials' reactors as sold. Applied Materials filed this second action, alleging that Demaray's subsequent conduct, including serving subpoenas on Applied Materials for information about its standard reactor configurations, has created a new and unavoidable controversy. The complaint also raises defenses of a pre-existing license based on a 1998 agreement between the parties' predecessors and a defect in the patents' chain of title.
Case Timeline
| Date | Event |
|---|---|
| 1998-12-11 | Sales and Relationship Agreement (SRA) executed between predecessors Applied Komatsu and Symmorphix. |
| 2001-04-16 | Inventor Mukundan Narasimhan terminates employment with Applied Materials. |
| 2002-03-16 | Earliest priority date for both the ’276 and ’657 Patents. |
| 2008-06-03 | U.S. Patent No. 7,381,657 issues. |
| 2009-06-09 | U.S. Patent No. 7,544,276 issues. |
| 2020-07-14 | Demaray files lawsuits against Applied Materials' customers, Intel and Samsung. |
| 2020-12-24 | Applied Materials files this Complaint for Declaratory Judgment. |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,544,276 - “Biased Pulse DC Reactive Sputtering of Oxide Films”
- Patent Identification: U.S. Patent No. 7544276, titled “Biased Pulse DC Reactive Sputtering of Oxide Films,” issued June 9, 2009. (Compl. ¶1).
The Invention Explained
- Problem Addressed: The patent’s background describes challenges in depositing high-quality insulating oxide films for optical and semiconductor devices. Traditional radio frequency (RF) sputtering methods often require ceramic targets composed of smaller tiles, which can lead to electrical arcing between the tiles and contamination of the deposited film. Furthermore, the required RF power systems can be complex to engineer. (’657 Patent, col. 1:25-44).
- The Patented Solution: The invention proposes a sputtering reactor that combines a pulsed direct current (DC) power supply for the sputtering target with a separate RF power supply to bias the substrate. A key component is a filter placed between the DC power supply and the target, which is designed to block the RF frequency and prevent it from damaging the DC supply. This configuration allows for the deposition of high-quality oxide films from more durable metallic targets, avoiding the problems associated with ceramic targets. (’657 Patent, Abstract; col. 2:45-54).
- Technical Importance: This technology sought to provide a more robust and controllable process for creating high-purity oxide films, which are critical components for devices like optical waveguides and high-dielectric insulators in integrated circuits. (’657 Patent, col. 1:11-24).
Key Claims at a Glance
- The complaint asserts non-infringement of Claim 1, an apparatus claim (Compl. ¶28).
- The essential elements of independent claim 1 include:
- A target area for receiving a target;
- A substrate area opposite the target area for receiving a substrate;
- A pulsed DC power supply coupled to the target area, providing alternating negative and positive voltages to the target;
- An RF bias power supply coupled to the substrate; and
- A narrow band-rejection filter that rejects at a frequency of the RF bias power supply coupled between the pulsed DC power supply and the target area.
U.S. Patent No. 7,381,657 - “Biased Pulse DC Reactive Sputtering of Oxide Films”
- Patent Identification: U.S. Patent No. 7381657, titled “Biased Pulse DC Reactive Sputtering of Oxide Films,” issued June 3, 2008. (Compl. ¶1).
The Invention Explained
- The ’657 Patent shares a common specification with the ’276 Patent, and therefore addresses the same technical problem with the same proposed solution, as described above. (Compl. ¶2).
Key Claims at a Glance
- The complaint asserts non-infringement of Claim 1, a method claim (Compl. ¶29).
- The essential elements of independent claim 1 include:
- Providing a process gas between a conductive target and the substrate;
- Providing pulsed DC power to the target through a narrow band rejection filter such that the target alternates between positive and negative voltages;
- Providing an RF bias at a frequency that corresponds to the narrow band rejection filter to the substrate;
- Providing a magnetic field to the target; and
- Reconditioning the target, which includes reactive sputtering in the metallic mode and then reactive sputtering in the poison mode.
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are Applied Materials’ “RMS reactors” within its “Endura product line,” which are used for semiconductor manufacturing. (Compl. ¶30). The underlying customer complaints filed by Demaray specifically identified reactor chambers such as the “CuBS RFX PVD with the Encore II Ta(N) barrier chamber” and the “Cirrus ionized PVD chamber.” (Compl. ¶30).
Functionality and Market Context
- The accused reactors are reactive magnetron sputtering systems used by semiconductor manufacturers, such as Intel and Samsung, to deposit thin film layers like tantalum nitride (TaN) and titanium nitride (TiN) onto wafers. (Compl. ¶¶30-31). Applied Materials states that it designs, manufactures, and configures these reactors according to customer specifications and installs them at customer fabrication facilities. (Compl. ¶31). The complaint emphasizes that its customers generally use the reactors as manufactured and installed, without subsequent hardware modifications to the power supply or filtering components. (Compl. ¶32).
No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
7,544,276 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a target area for receiving a target | The accused reactor includes a standard target area. | ¶28 | col. 5:16-24 |
| a substrate area opposite the target area for receiving a substrate | The accused reactor includes a standard substrate area opposite the target. | ¶28 | col. 5:20-24 |
| a pulsed DC power supply coupled to the target area... | The complaint states Demaray's allegations rely on Applied Materials' own product literature to identify a pulsed DC power supply coupled to the target. | ¶34 | col. 5:46-56 |
| an RF bias power supply coupled to the substrate | The complaint states Demaray's allegations rely on Applied Materials' product literature to identify an RF bias power supply coupled to the substrate. | ¶35 | col. 5:30-34 |
| a narrow band-rejection filter that rejects at a frequency of the RF bias power supply coupled between the pulsed DC power supply and the target area | The complaint alleges Demaray provided no direct evidence of this filter but argued it must exist to protect the DC power supply from RF feedback. | ¶36 | col. 5:57-65 |
7,381,657 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| providing a process gas between a conductive target and the substrate | The accused reactors are used in a process that introduces a process gas into the chamber. | ¶29 | col. 3:5-10 |
| providing pulsed DC power to the target through a narrow band rejection filter such that the target alternates between positive and negative voltages | The use of the accused reactors allegedly involves supplying pulsed DC power through a filter, a point Applied Materials disputes. | ¶38 | col. 2:50-54 |
| providing an RF bias at a frequency that corresponds to the narrow band rejection filter to the substrate | The use of the accused reactors allegedly involves applying an RF bias to the substrate. | ¶38 | col. 2:50-52 |
| providing a magnetic field to the target | The accused reactors are magnetron sputtering systems that utilize a magnetic field at the target. | ¶29 | col. 5:18-24 |
| reconditioning the target... | The operation of the accused reactors allegedly includes steps for reconditioning the target surface by sputtering in different modes. | ¶29 | col. 11:53-61 |
- Identified Points of Contention:
- Technical Questions: The primary point of contention appears to be factual. The complaint alleges that Demaray's infringement theory relies on the presence of a "narrow band-rejection filter" but that Demaray failed to provide evidence of its existence in the accused reactors as sold by Applied Materials (Compl. ¶36). This raises a central evidentiary question: Do the accused Endura reactors, as configured and delivered by Applied Materials, contain a component that functions as the claimed filter, or is any such component added later by customers? The complaint suggests the latter is unlikely, noting that such a modification could impact the reactor's warranty (Compl. ¶37).
- Legal Questions: The complaint raises multiple, potentially dispositive legal issues separate from the technical merits. A key question is whether a 1998 license agreement between the parties' predecessors covers the Asserted Patents, which would render any infringement claim moot (Compl. ¶¶18-21, 103). A second legal question concerns ownership, raising the possibility that one of the named inventors was obligated to assign his rights to Applied Materials, which would make Applied a co-owner of the patents and potentially bar Demaray from unilaterally bringing suit (Compl. ¶¶22, 111).
V. Key Claim Terms for Construction
- The Term: "a narrow band-rejection filter"
- Context and Importance: This term appears in the independent claims of both asserted patents and is central to the dispute. The existence and identity of this component in the accused systems is the core technical disagreement alleged in the complaint (Compl. ¶¶36, 95). Practitioners may focus on this term because its construction could determine whether any component within the accused reactors meets this limitation, or if no such component exists at all.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the filter’s function broadly as preventing "the bias power from power supply 18 from coupling into pulsed DC power supply 14" (’657 Patent, col. 5:57-59). An argument could be made that any component performing this protective, filtering function meets the claim limitation, regardless of its specific design.
- Evidence for a Narrower Interpretation: The specification provides a specific embodiment, stating that "filter 15 is a 2 MHz band rejection filter" and that "the band width of the filter can be approximately 100 kHz" (’657 Patent, col. 5:62-64). This language could support a narrower construction, limiting the claim scope to filters designed to reject a specific frequency (e.g., 2 MHz) with a particular bandwidth characteristic.
VI. Other Allegations
- Indirect Infringement: The complaint anticipates that Demaray could allege indirect infringement against Applied Materials. It lays out the potential basis for such a claim, stating that Demaray is "necessarily alleging that Applied intentionally causes, encourages, or aids Intel and Samsung to infringe by designing, developing, manufacturing, assembling, and installing the reactor systems" (Compl. ¶55).
- Willful Infringement: The complaint does not contain allegations of willfulness against Applied Materials. However, it notes that in the underlying customer lawsuits, Demaray alleged willful infringement against at least one customer, Samsung, based on alleged pre-suit notice of the patents (Compl. ¶60, citing Ex. B).
VII. Analyst’s Conclusion: Key Questions for the Case
The resolution of this declaratory judgment action will likely depend on the answers to three distinct questions, two of which are legal and one of which is deeply factual.
- A primary issue will be one of factual existence: Do the accused Applied Materials sputtering reactors, as manufactured and sold, incorporate a component that meets the "narrow band-rejection filter" limitation, or is Demaray’s infringement theory premised on a component that is not part of the standard product?
- A potentially dispositive question is one of contractual license: Does the 1998 Sales and Relationship Agreement between the parties’ corporate predecessors grant Applied Materials a perpetual, royalty-free license to the Asserted Patents, which would provide a complete defense to infringement irrespective of the technology?
- A third key question is one of patent ownership: Do the terms of a named inventor's employment agreement with Applied Materials dictate that his ownership rights in the Asserted Patents were automatically assigned to Applied Materials, potentially making it a co-owner and precluding Demaray from independently enforcing the patents?