Before Michel, Circuit Judge, Archer, Senior Circuit Judge, *fn1 * and Plager, Circuit Judge.
The opinion of the court was delivered by: Archer, Senior Circuit Judge.
Appealed from: U.S. District Court for the Eastern District of New York Judge Randall R. Rader (sitting by designation)
Loral Fairchild Corporation (Loral) appeals the July 23, 1996 judgment of the United States District Court for the Eastern District of New York, No. 91-CV-5056, holding that Sony Corporation and Sony Electronics, Inc. (Sony) did not infringe Loral's patents. As pertinent here, the court held on summary judgment that Sony did not literally infringe United States Patent No. 3,931,674 (the '674 patent) and, contrary to the jury's verdict, that it also did not infringe the patent under the doctrine of equivalents. The court also held, again contrary to the jury's verdict, that Sony did not infringe United States Patent No. 3,896,485 (the '485 patent) under the doctrine of equivalents. *fn2
Loral, assignee of the '674 and '485 patents, brought an infringement suit against a number of Japanese electronics manufacturers including those who manufacture and sell semiconductors and consumer electronic devices and those who purchase semiconductors and manufacture consumer electronic devices. *fn3 The district court resolved a number of issues as a matter of law clarifying and limiting the issues that needed to go to trial. See Loral Fairchild Corp. v. Victor Co. of Japan, Ltd., 906 F.Supp. 813 (E.D.N.Y. 1995) (granting defendants' motion for summary judgment on marking). In connection with its preliminary holdings, the district court held a two day "Markman hearing" to resolve the claim construction issues. See Loral Fairchild Corp. v. Victor Co. of Japan, Ltd., 906 F.Supp. 798 (E.D.N.Y. 1995) (construing disputed claims of the patents).
Following the construction of the claims, Sony moved for summary judgment that it neither literally infringed nor infringed under the doctrine of equivalents either of the patents at issue. The court granted Sony's motion of no literal infringement as to both patents, but denied the motion as to infringement under the doctrine of equivalents. See Order Granting in Part Sony's Motion for Summary Judgment of Non-Infringement of the '674 Patent (Civil Action Nos. 92-0128-ARR, 91-5056-ARR, December 14, 1995); Order Granting in Part and Denying in Part Sony's Motion for Summary Judgment of Non-Infringement of the '485 Patent and Denying Toshiba's Motion for Summary Judgment on Invalidity of the '485 Patent (Civil Action Nos. 92-0128-ARR, 91-5056-ARR, December 15, 1995).
Concerned about potential prejudice to the defendants in this case, the court also separated the trial of each of the manufacturing defendants. Sony's trial proceeded first.
The trial was held in January 1996 on the issues of ownership, infringement under the doctrine of equivalents, and validity. After five weeks of trial, the jury was given a detailed set of written instructions with integrated special verdicts for separate factual issues. After four days of deliberation, the jury found that Loral owned both patents, that Sony infringed both patents under the doctrine of equivalents and had induced infringement of the '674 patent, and that Sony failed to prove that any of the claims at issue were invalid.
Following the verdict, the court considered Sony's motion for judgment as a matter of law, and in the alternative, for a new trial. The court granted Sony's motion, holding, inter alia, that infringement of the '674 patent was precluded by prosecution history estoppel *fn4 and that infringement of the '485 patent could not stand under a proper claim interpretation. Loral Fairchild Corp. v. Victor Co. of Japan, Ltd., 931 F.Supp. 1014 (E.D.N.Y. 1996). The case was certified for appeal to this court under Fed. R. Civ. P. 54(b).
The patents at issue describe inventions in semiconductor technology known as charge coupled devices (CCD). This technology has proven useful in devices where there is a need to store a continuously changing image such as camcorders, cameras, copiers, and facsimile machines.
The imager of a camcorder, for example, localizes on its surface electrical charges created from light to which it has been exposed into an array of many small points, or pixels, each of which can contain a packet of electrical charge, thus defining a picture corresponding to the view that the user intends to record. The CCD, which collects the charges associated with the changing image, is part of a semiconductor structure further housing a thin layer of nonconductive insulation and a series of gate electrodes on the top surface of the material. When voltage is applied to one of these gate electrodes it creates a "potential well" in the semiconductor substrate beneath the electrode. A packet of electrical charge representing a pixel can be stored in the potential well, and by alternately applying two different voltages to adjacent gate electrodes, the charge packets can be forced to move through the semiconductor substrate in one direction. By transporting the charge packets, the image is stored and removed to allow the next image to be stored. Backward movement of the charge packets is prevented by ion implanted barriers.
The '674 patent claims a six step process for fabricating a self-aligned CCD. It was invented by Dr. Gilbert F. Amelio. At issue here is claim 1 which reads:
"1. A process for fabricating a charge coupled device structure in a semiconductor substrate, comprising the steps of"
" selectively applying at least one layer of insulation material to said semiconductor substrate;"
" selectively forming a plurality of spaced-apart first gate electrodes on the uppermost surface of said at least one layer of insulation material;"
" forming a first insulation layer over said plurality of first gate electrodes;"
" forming implanted barrier regions in said semiconductor substrate in the intervals between said plurality of spaced-apart first gate electrodes, the edges of said implanted barrier regions being aligned with the vertical edges of the insulation layer on the respective first gate electrodes;"
" selectively forming a plurality of second gate electrodes on said uppermost surface of said at least one insulating layer between said plurality of spaced-apart first gate electrodes, each of said second gate electrodes substantially occupying the space between adjacent first gate electrode, and"
" connecting each of said second gate electrodes to an individual adjacent first gate electrode to form a composite electrode for a charge coupled element." [Bracketed numbers added to facilitate reference.]
The sequence of steps in the claim defines an insulated gate masking process. See Fig. 4 of the '674 patent below. The insulated gate is used as a mask when the ion implantation barriers are established. When the ions are implanted, the insulated gate blocks implantation into the semiconductor substrate directly below it, resulting in implantation limited to the regions (44, 46, 48, 50) between the gate electrodes. The insulation (54, 56, 58, 60, 62) covers the first gate electrodes (43, 45, 47, 49, 51) when the ions are implanted.
Loral brought suit against Sony claiming that Sony's process of fabricating CCDs infringed the '674 patent. Sony's fabrication process is an uninsulated or naked gate masking process. It is undisputed that the Sony process performs all the steps of the '674 process; however, it performs step four prior to step three. In Sony's process the ion implantation occurs prior to the insulation on the first gate electrodes. Thus, the gate alone, rather than the gate with insulation on it, serves as the mask in the Sony process.
Prior to the trial, the district court construed claim 1 of the '674 patent to require formation of the insulation layer over the first gate electrodes before implantation of the barrier regions. In other words, the claim requires a chronological process sequence with step three preceding step four. See Loral, 906 F. Supp. at 806. Under this construction, the court granted summary judgment in favor of Sony holding that there was no literal infringement because its process performs claimed step four before step three. However, the court denied the motion for summary judgment on infringement under the doctrine of equivalents.
When the case proceeded to trial the jury found that Sony's fabrication process infringed claim 1 of the '674 patent under the doctrine of equivalents. The jury also found that Sony did not prove prosecution history estoppel and that Sony's process was not covered by the prior art.
On Sony's motion for JMOL, the court rejected the jury's advisory verdict on the issue of prosecution history estoppel and held that prosecution history estoppel barred a finding that Sony infringed claim 1 of the '674 patent under the doctrine of equivalents. The court held that during prosecution the patentee limited his claim to insulated gate masking (i.e. performing step three before step four), and that Loral was estopped from recapturing naked gate masking through the doctrine of equivalents.
The '485 patented technology was invented by Dr. James M. Early. Claim 1 of the '485 patent reads:
"1. Structure which comprises:"
"a. a light sensing element comprising a first region of semiconductor material overlaid by a first electrode separated from said semiconductor material by insulation, said light sensing element being capable of containing a charge packet;"
"b. an adjacent region of said semiconductor material disposed for receiving said charge packet from said light sensing element;"
"c. means for controlling the transfer of said charge packet from said light sensing element to said adjacent regions; and"
"d. charge sink means having a contact for applying a bias thereto buried within said semiconductor material and disposed for receiving excess charge accumulated in said light sensing element, said charge sink means extending laterally from said contact toward said light sensing element while beneath the surface of said semiconductor material." (Emphasis added.)
The '485 patent teaches a vertical overflow drain for a CCD to limit "blooming." Blooming is the spreading of light on a video image which distorts the image. It occurs because a pixel on the surface of the CCD has a limited capacity to store electrical charge. When the pixel is full, the excess electrical charge will overflow into the adjacent pixels causing a distortion of the image being recorded. To prevent blooming, a CCD includes an overflow structure to store and dissipate the excess charge from the light sensing elements. Initially, lateral overflow drains located adjacent to the pixels were created. However, surface overflow drains occupied valuable light sensing space ...