GSI Technology, Inc. (Nasdaq: GSIT) announced on Thursday, October 25, 2012, that Chief Administrative Law Judge Charles E. Bullock issued his initial determination in the patent litigation between GSI and Cypress Semiconductor Corp. (Nasdaq: CY) pending before the International Trade Commission (the “ITC”). The initial determination issued by Judge Bullock held that the importation of GSI’s static random access memories (“SRAM”) products, and products containing them, and the sale within the United States of such products, have not violated applicable federal law with respect to any of the four patents that Cypress had alleged were infringed.
The ITC investigation was instituted in July 2011 in response to a complaint filed by Cypress. The complaint was initially filed with the U.S. International Trade Commission on June 10, 2011, under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337. An amended complaint was filed on June 27, 2011 and a letter supplementing the amended complaint was filed on June 28, 2011. A second amended complaint was filed on July 13, 2011. The second amended complaint alleged violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain SRAMs and products containing them by reason of infringement of certain claims of U.S. Patent No. 6,534,805 (“the ‘805 patent”); U.S. Patent No. 6,651,134 (“the ‘134 patent”); U.S. Patent No. 7,142,477 (“the ‘477 patent”); and U.S. Patent No. 6,262,937 (“the ‘937 patent”). The second amended complaint further alleged that an industry in the United States exists as required by subsection (a)(2) of section 337.
The Cypress complaint requested that the ITC institute an investigation and, after the investigation, issue an exclusion order and cease and desist orders. The ITC did comply with the initiation of an investigation by Notice of Institution of Investigation dated July 21, 2011. Other respondents besides GSI included Alcatel-Lucent, Ericsson Inc., Motorola Solutions Inc., Motorola Mobility Inc., Cisco Systems Inc., Hewlett Packard Company and others.
An evidentiary hearing before Judge Bullock took place in March 2012, which lead to the initial determination by Judge Bullock. The detailed findings in support of Judge Bullock’s determination have not yet been released.
Either party may request a review of the initial determination by the full Commission. Requests for Commission review must be submitted in early November 2012. The target date for concluding the ITC investigation is February 25, 2013. Cypress Semiconductor Corp. immediately announced that it will seek a review by the full ITC of Judge Bullock’s initial determination.
“A finding of no violation in this case is inconceivable,” said T.J. Rodgers, President and CEO of Cypress. “We intend to pursue a review with the full Commission. We will also continue to pursue our suit in federal district court. We will use all of our resources to protect our intellectual property.”
Not surprisingly, Lee-Lean Shu, GSI’s President and Chief Executive Officer, had a different take. Shu commented that “We are, of course, pleased with this complete victory. The judge confirmed what we have been saying for over a year – that GSI has not infringed any valid Cypress patents. The victory is particularly satisfying in light of the repeated misleading and defamatory statements made by Cypress management in an attempt to intimidate our customers and other prospective purchasers of GSI’s products. We look forward to resuming competition with Cypress on the basis of the technological superiority of our products.” On a related matter, Shu noted that “We continue to vigorously pursue our antitrust case against Cypress that is pending in the U.S. District Court for the Northern District of California.”
Cypress has also a parallel lawsuit filed in the federal district court of Minnesota (Case No. 11-cv-00789), which is currently stayed pending the ITC’s final ruling. This parallel litigation in the federal court will not be directly affected by the ruling by the ITC regardless of whether it is ultimately a benefit or disadvantage to Cypress. There are no estoppel provisions and the federal district court litigation will fully re-litigate all matters. Some judges in the federal system are, however, influenced by the ITC. Still others are not, so it is impossible to predict what effect any particular ITC ruling would have on the district court.