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ON Semiconductor Corporation v. Micro Processing Technology Inc.

United States District Court, D. Arizona

February 8, 2017

ON Semiconductor Corporation, et al., Plaintiffs,
v.
Micro Processing Technology Incorporated, Defendant.

          ORDER

          Douglas L. Rayes United States District Judge

         Plaintiffs are ON Semiconductor Corporation and Semiconductor Components Industries, LLC (ON). Defendant is Micro Processing Technology Incorporated (MPT). At issue is MPT's Motion to Dismiss ON's Amended Complaint or, in the Alternative, to Transfer Venue. (Doc. 14.) The motion is fully briefed, and the Court heard oral on December 15, 2016. The Court also has considered the parties' supplemental briefs regarding whether a party can waive a forum selection clause through litigation-related conduct. (Docs. 46-47.) For the following reasons, MPT's motion to transfer venue is granted and this matter is transferred to the Middle District of Florida.

         BACKGROUND

         This case presents, inter alia, a dispute over the inventorship of three patents (Patents-in-Suit). The Patents-in-Suit also are implicated in a separate case brought by Plasma-Therm, LLC against MPT in the Middle District of Florida, Plasma-Therm LLC v. Micro Processing Technology, Inc., No. 8:15-cv-02785-CEH-TBM (Florida Litigation). For context, the Court will discuss each case before reaching the merits of MPT's motion.

         I. Allegations in the Amended Complaint[1]

         ON manufactures integrated circuits, which are used in a variety of electronic applications and generally consist of a “chip” connected by wires to a number of “pins” and encapsulated in a plastic case. These chips are manufactured in bulk on large platters called “wafers, ” which typically consist of a semiconductor substrate material atop a metal backing. A single wafer can contain thousands of chips that must be separated carefully from each other through a process called “singulation, ” which involves sawing through the portion of the wafer between each chip. It can take up to ten hours to singulate a wafer because the space between each chip is small and the cuts must be precise to avoid damage.

         Prior to 2008, ON developed and patented a plasma etching technique (Plasma Singulation) to replace the sawing process. Though Plasma Singulation significantly reduces the time it takes to singulate a wafer, it does not remove the wafer's metal backing. To solve this problem, ON and MPT entered into a three-year Confidentiality and Non-Disclosure Agreement (NDA), and began experimenting with different methods to separate the metal backing. One such method involved cutting the metal backing using a tool similar to a pizza cutter (Mechanical Cutting-Based Singulation). Another involved applying stress to the wafer using a stylus (Stylus-Based Singulation).

         In February 2012, ON employee Gordon Grivna conceived of the idea to use a uniform pressure differential-based stress on the wafer, which involves fracturing the metal backing between each chip by applying high pressure on one side of the wafer instead of cutting through the metal backing (Uniform Pressure Differential-Based Singulation). Between March and June 2012, Grivna tested and refined this method.

         In May 2012, P.C. Lindsey of MPT visited Grivna and other ON employees to discuss the latest singulation results. During that visit, Grivna's Uniform Pressure Differential-Based Singulation experiments were openly visible. In the months that followed, Grivna shared with Mr. Lindsey and MPT confidential information regarding some of the methods he was exploring, including Stylus-Based and Uniform Pressure Differential-Based Singulation. In August 2013, the parties entered into a second, identical NDA to allow them to continue their joint work.

         ON alleges that, between 2011 and 2013, MPT surreptitiously patented singulation methods first conceived of by ON employees. Specifically, on August 2, 2011, MPT filed a patent application, which issued as U.S. Patent No. 8, 450, 188 (188 Patent), claiming ownership and inventorship of, among other things, Mechanical Cutting-Based Singulation. On January 16, 2013, MPT filed another patent application, which issued as U.S. Patent No. 9, 153, 493 (493 Patent), claiming ownership and inventorship of, among other things, Stylus-Based Singulation. Finally, on September 12, 2013, MPT filed a provisional patent application, which issued as U.S. Patent No. 8, 906, 745 (745 Patent), claiming ownership and inventorship of, among other things, Uniform Pressure Differential-Based Singulation. The 188 and 493 Patents list Lindsey as the sole inventor and the 745 Patent lists Lindsey and a fellow MPT employee, Darrell Foote, as the sole inventors.

         On November 9, 2015, ON received a letter from MPT asserting that it conceived of and owned the “idea of applying pressure to the tape across the entire wafer simultaneously, ” and that ON's work to develop back-metal processing technology violated the NDA. ON responded that MPT had not shared any confidential information with it, but that ON had been working on its own technology since early 2012 and had shared its confidential information with MPT. In a subsequent letter, MPT referred for the first time to its patented process to utilize uniform pressure across the entire wafer, alleged that ON's work with a third-party potentially infringed on MPT's patent, and demanded that ON cease and desist its use of MPT's patents and trade secrets.[2]

         Upon reviewing MPT's patents, ON learned that they covered technology invented in whole or in part by ON, and that MPT had disclosed confidential information covered by the parties' NDAs in its patent applications. Consequently, in April 2016 ON initiated this action asserting seven claims to relief. Counts I-III seek to correct the inventorship of the three patents to name Grivna as joint inventor, Counts IV-VI allege that MPT breached the parties' NDAs by disclosing confidential information in the applications for the Patents-in-Suit, and Count VII alleges that MPT misappropriated ON's trade secrets through the same disclosures.

         II. The Florida Litigation[3]

         In December 2015, several months before ON initiated this lawsuit, Plasma-Therm brought suit against MPT in the Middle District of Florida. According to its First Amended Complaint, (Doc. 40), Plasma-Therm manufactures etching and thin film deposition equipment for the semiconductor industry and has developed and patented a plasma-dicing method of singulation and methods for separating the metal backing on a semiconductor substrate. Plasma-Therm and MPT entered into a NDA in June 2011, under which they shared certain information related to back-metal processing methods. Ultimately, however, the parties did not enter any further business transactions related to the technology.

         In November 2015, MPT sent a letter to Plasma-Therm demanding that it cease and desist its infringement of MPT's patents and misappropriation of MPT's trade secrets. Plasma-Therm brought suit seeking a declaratory judgment of non-infringement as to the Patents-in-Suit. Plasma-Therm also sought a declaratory judgment that the Patents-in-Suit are unenforceable because MPT failed to name Grivna as a joint inventor. On June 30, 2016, however, Plasma-Therm voluntarily dismissed its unenforceability claims without prejudice. (Doc. 49.)

         On January 18, 2017, MPT filed counterclaims against Plasma-Therm for, among other things, patent infringement and misappropriation of trade secrets. MPT also brought a third-party counterclaim against ON, alleging, in relevant part, that ON breached a License Agreement entered into by the parties in August 2014 and contributed to or induced Plasma-Therm to infringe on the ...


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