Nichia Corporation v. Everlight Americas, Inc. ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
NICHIA CORPORATION,
Plaintiff-Appellant
v.
EVERLIGHT AMERICAS, INC., EVERLIGHT
ELECTRONICS CO., LTD.,
Defendants-Cross-Appellants
ZENARO LIGHTING, INC.,
Defendant
______________________
2016-1585, 2016-1618
______________________
Appeals from the United States District Court for the
Eastern District of Texas in No. 2:13-cv-00702-JRG,
Judge J. Rodney Gilstrap.
______________________
Decided: April 28, 2017
______________________
ROBERT P. PARKER, Rothwell, Figg, Ernst & Manbeck,
P.C., Washington, DC, argued for plaintiff-appellant. Also
represented by MARTIN MOSS ZOLTICK, MICHAEL JONES,
DANIEL MCCALLUM, STEVEN PAUL WEIHROUCH.
JERRY ROBIN SELINGER, Patterson & Sheridan LLP,
Dallas, TX, argued for defendants-cross-appellants. Also
represented by JAYME PARTRIDGE, BARDEN TODD
2 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
PATTERSON, Houston, TX; ERIC W. BENISEK, JEFFREY T.
LINDGREN, ROBERT MCARTHUR, STEPHEN C. STEINBERG,
RICHARD C. VASQUEZ, Vasquez Benisek & Lindgren, LLP,
Lafayette, CA.
______________________
Before REYNA, HUGHES, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
Nichia Corporation sued Everlight Electronics Co.,
LTD., Everlight Americas, INC., and Zenaro Lighting,
Inc. (collectively, “Everlight”) for infringement of three of
its patents. Following a bench trial, the district court
found Everlight infringed all three patents and had not
proved them invalid. The court denied, however, Nichia’s
request for a permanent injunction against Everlight.
Nichia appeals the district court’s refusal to enter an
injunction against Everlight. Everlight cross-appeals the
court’s judgment that it infringes Nichia’s patents and
that it failed to prove the patents invalid. We affirm.
BACKGROUND
I.
Nichia Corporation is an LED company that manufac-
tures and supplies LEDs in markets around the world.
Nichia Corp. v. Everlight Elecs. Co., No. 02:13-CV-702,
2016 WL 310142, at *1 (E.D. Tex. Jan. 25, 2016)
(“Nichia”). Both parties agree that “Nichia is the world’s
largest supplier of LEDs.” J.A. 2113, ¶ 154. It sells LEDs
in America through its subsidiary Nichia America Corp.
Nichia also researches and develops LED technology,
including the technology disclosed in the three patents
Nichia asserted in this case.
Everlight buys chips from suppliers and packages
them into LEDs. Nichia, 2016 WL 310142, at *1. It sells
LEDs in the U.S. directly to customers and through its
subsidiaries. Id.
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 3
II.
Nichia accused Everlight of infringing three of
Nichia’s patents, U.S. Patent Nos. 8,530,250, 7,432,589,
and 7,462,870. All three disclose package designs and
methods of manufacturing LED devices. All three patents
use a shared set of vocabulary known in the art, as shown
below on a common configuration of an LED:
Id. at *4; J.A. 11. The court explained that this LED
includes the following parts:
(i) the “leads,” which are used to conduct the elec-
trical current to the LED chip; (ii) the “resin hous-
ing,” which is made out of a reflective resin and
includes a recess in which the LED chip is placed;
(iii) the “LED chip” or “LED die” (about the size of
a grain of salt), which is mounted in the recess
typically by using an adhesive material in a pro-
cess known as die bonding; (iv) one or more “bond
wires” that connect the LED chip to the leads; and
(v) an “encapsulation material” that encapsulates
the LED chip and protects it from the environ-
ment.
Nichia, 2016 WL 310142, at *4.
4 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
The LEDs in suit are miniscule; they are typically
smaller than 1 millimeter in height. Id. They are used in
LCD backlights, video displays, automotive applications,
and general lighting applications. Id.
The court found that LED design technology is a com-
plex technological space, where many design considera-
tions pull in different directions simultaneously. It found
that “LED package design involves the simultaneous
integration and balancing of multiple design considera-
tions, including electrical, optical, thermal, and mechani-
cal design challenges.” Id. The court emphasized that:
[m]ultiple challenges must be addressed when de-
signing an LED package: (i) electrical design chal-
lenges: We have to conduct a relatively high-
current density through the small LED chip and
connect the LED chip to the leads; (ii) optical de-
sign challenges: The intensities are very high, be-
cause the LED chip is very small and the power
emitted by the LED is quite high. And, therefore,
we need to handle a very high-optical radiation
density; (iii) thermal design challenges: The LED
chip inevitably creates heat, and this heat needs
to be conducted away; and (iv) mechanical design
challenges: includes protecting the LED chip from
any external effect, such as moisture or mechani-
cal intrusion. These multiple requirements can
be contradictory and can pull the design in differ-
ent directions.
Id. (internal emphases, citations, and quotations omitted).
The district court held a bench trial and found that
Everlight infringed all three patents and had failed to
prove by clear and convincing evidence that the asserted
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 5
claims of the three patents are invalid. 1 Id. at *1. De-
spite finding the patents valid and infringed, the court
refused Nichia’s request for prospective relief in the form
of a permanent injunction. Id. The court explained that
“Nichia has not demonstrated that Defendants’ past and
continuing infringement of Nichia’s Patents has caused,
and will continue to cause, irreparable harm to Nichia.”
Id. It also reasoned that monetary damages could ade-
quately compensate Nichia for Everlight’s infringement.
The court thus concluded that Nichia was not entitled to
injunctive relief. Id.
Nichia timely appealed, and Everlight cross-appealed.
Nichia appeals the district court’s refusal to grant the
injunction. Everlight cross-appeals the district court’s
judgment that Everlight infringes and that it failed to
prove the patents invalid with respect to all of the assert-
ed claims of Nichia’s three asserted patents. We have
jurisdiction under 28 U.S.C. § 1292(c)(2).
DISCUSSION
I.
We begin with Everlight’s appeal of the district court’s
finding that Everlight infringed the asserted claims of
Nichia’s three patents and its conclusion that Everlight
failed to prove those claims invalid by clear and convinc-
ing evidence.
We review the court’s findings of fact for clear error
and its legal conclusions de novo. Allergan, Inc. v. Apotex
Inc., 754 F.3d 952, 961 (Fed. Cir. 2014). “A finding is
1 The district court’s opinion contains a thorough
background of this case and explanation of LED manufac-
turing technology. See Nichia, 2016 WL 310142. This
opinion includes an abbreviated recitation of the facts
relevant to our disposition.
6 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
‘clearly erroneous’ when although there is evidence to
support it, the reviewing court on the entire evidence is
left with the definite and firm conviction that a mistake
has been committed.” United States v. U.S. Gypsum Co.,
333 U.S. 364, 395 (1948). “Where the district court’s
claim construction relies only on intrinsic evidence, the
construction is a legal determination reviewed de novo.”
Ruckus Wireless, Inc. v. Innovative Wireless Sols., LLC,
824 F.3d 999, 1002 (Fed. Cir. 2016) (citing Teva Pharm.
USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015)).
Infringement is a question of fact. Golden Blount, Inc. v.
Robert H. Peterson Co., 438 F.3d 1354, 1361 (Fed. Cir.
2006). “Obviousness is a question of law based on under-
lying questions of fact.” Daiichi Sankyo Co. v. Apotex,
Inc., 501 F.3d 1254, 1256 (Fed. Cir. 2007).
A.
We begin with the ’250 patent. The district court
found claims 1, 7, 17, 19, and 21 of the patent infringed
and not proven invalid. Everlight first challenges the
court’s construction of the claim term “lead” and its find-
ing of infringement under its proposed construction.
Second, it challenges the court’s construction of “planar”
and the court’s finding of infringement under either its
proposed construction or the court’s. Finally, Everlight
challenges the court’s conclusion that it failed to prove the
patent obvious.
1.
The ’250 patent is directed to a process for manufac-
turing LEDs that purportedly improves production effi-
ciency. The patent describes making a continuous sheet
of LEDs and separating, or “singulating,” them to make
the final product. ’250 patent col. 2 ll. 49–53. During
singulation, LEDs often break. So to reduce breakage,
the patent suggests manufacturing LEDs by fitting a lead
frame between an upper and lower mold, filling the molds
with resin, and then singulating the LEDs. This, the
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 7
patent suggests, is a “simple and low-cost method for
manufacturing, in a short time, multiple light emitting
devices which ha[ve] high adhesion between a lead frame
and a thermosetting resin composition.” Id. The district
court noted that, “[b]etween 2010 and 2013, Nichia’s sales
of the products that practice the ’250 patent increased
from three percent of Nichia’s total sales volume, to 27
percent.” Nichia, 2016 WL 310142, at *24. The court also
explained that, “[i]n 2013, Nichia sold over 13.9 billion
units, with revenues of $1.7 billion.” Id.
The ’250 patent’s first claim is reproduced below:
1. A method of manufacturing a light emitting de-
vice, the method comprising:
providing a lead frame comprising at least one
notch;
plating the lead frame;
after plating the lead frame, providing an up-
per mold on a first surface of the plated lead
frame and a lower mold on a second surface of
the plated lead frame, and transfer-molding a
thermosetting resin containing a light reflect-
ing material in a space between the upper
mold and the lower mold to form a resin-
molded body; and
cutting the resin-molded body and the plated
lead frame along the at least one notch to form
a resin package, the resin package comprising
a resin part and at least one lead, and the cut-
ting step being performed such that an outer
surface of the resin part and an outer surface
of the at least one lead are planar at an outer
side surface of the resin package,
8 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
wherein the plated lead frame is cut so as to
form an unplated outer side surface on the
lead.
’250 patent col. 19 ll. 37–55.
2.
Everlight argues that the court misconstrued the term
“lead” when it interpreted “lead” to mean “the portion of
the device that conducts electricity.” J.A. 10054–55.
Everlight contends that a lead must be more than simply
conductive, it must be “the conductive portion of the
device that makes an electrical connection to a structure
outside of the device.” J.A. 10054 (originally proposing
this construction). The district court rejected Everlight’s
request to add a requirement that the lead electrically
connect to a structure outside of the device because, while
the court “generally agree[d] with the conductive portion
of [Everlight’s] construction,” it found “the remaining
language problematic and not as concise as the Court’s
construction.” J.A. 10056.
We agree with the district court that a lead, as em-
ployed in the asserted claims of the ’250 patent, is “the
portion of the device that conducts electricity.” The
specification discloses leads 22 in Figure 1:
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 9
’250 patent, Fig. 1. The specification explains that “[t]he
light emitting element 10 is electrically connected with
the leads 22 through wires 50.” Id. at col. 6 ll. 20–21. It
explains that the lead frame “is formed using an electrical
[sic] good conductor such as iron, phosphor bronze or a
copper alloy.” Id. at col. 9 ll. 21–22. These disclosures
explain that the claimed leads conduct electricity. But we
find no compelling support in the intrinsic evidence for
Everlight’s proposed requirement that the leads conduct
electricity from outside the device. We thus agree with
the district court that the person of ordinary skill would
understand a lead to be “the portion of the device that
conducts electricity.”
Because we agree with the court’s construction, and
because Everlight does not challenge the court’s finding of
infringement under that construction, we affirm the
court’s finding that the accused products meet this limita-
tion.
3.
We next turn to Everlight’s contention that the dis-
trict court misconstrued “planar” when it interpreted the
term “planar” as “in a substantially same plane.”
J.A. 10069. The ’250 patent’s claims require that “at least
one lead [be] planar at an outer side surface of the resin
package.”
Everlight argues that “planar” means that there is “no
measurable surface variation.” J.A. 10068. Everlight
asserts that this construction is mandated by the specifi-
cation’s distinction between “planar” and “in the same
plane.” Everlight Br. 23. Namely, the patent uses “in a
substantially same plane” in the specification but “planar”
in the claims. The specification states that “a resin part
and a lead are formed in a substantially same plane in an
outer side surface.” ’250 patent col. 2 l. 63 – col. 3 l. 1.
The claims, however, recite “an outer surface of the resin
part and an outer surface of the at least one lead are
10 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
planar at an outer side surface.” Id. at col. 19 ll. 50–52
(claim 1) (emphasis added). Everlight argues that the
patent owner’s choice to use “in a substantially same
plane” in the specification but “planar” in the claims
mandates that we treat the two terms differently.
We disagree. First, Everlight’s argument implies a
rule that we decline to adopt here, namely, that if differ-
ent words are used in the claim and specification, then we
must read that distinction as an intended difference. We
recognize that, in some patents, a distinction between
terms may imply a difference in meaning, but this is no
hard-and-fast rule. Rather, some inventors might use one
term in the specification to inform the meaning of another
term in the claims. See SAS Inst., Inc. v. Complemen-
tSoft, LLC., 825 F.3d 1341, 1348 (Fed. Cir. 2016). For one
word to inform the meaning of another, the words need
not be identical. See id. For example, in SAS Institute,
we held that the term “graphical representation of a data
flow” in the claims and the term “data flow diagram” in
the specification were commensurate in scope. Id. So too
here. Reading the claims in light of the specification, we
conclude that the claimed term “planar” is commensurate
in scope with the specification’s discussion of “in a sub-
stantially same plane.” We therefore agree with the
court’s conclusion that “planar” means “in a substantially
same plane.”
Because we agree with the court’s construction, we
next consider Everlight’s argument that it does not in-
fringe even under that construction. Everlight Br. 23.
Everlight argues that “the outer side surfaces of the three
package groups are not ‘planar’ because each of the outer
side surfaces of the LED packages has a significant con-
cave portion.” Id. at 23–24 (citing J.A. 10347–57). Ever-
light presents three cross-sectional views of the alleged
infringing devices, each showing two leads with flat
sections connected by slight concavities.
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 11
We find Everlight’s argument unconvincing. Under
the correct construction, the leads need not be perfectly
flat; they need only be “in a substantially same plane” as
the outer surface of the resin. The leads here are “in a
substantially same plane” as the outer surface of the
resin; slight concavities do not mandate a finding other-
wise. We thus see no clear error in the court’s finding
that Everlight’s accused products infringe the “planar”
limitation. 2
4.
Everlight also argues it proved the ’250 patent invalid
for obviousness, despite the district court’s holding other-
wise. Specifically, Everlight asserts that the patent is
rendered obvious by “Hitachi,” Japanese Patent Pub.
Tokukai No. 2007-235085, in combination with “Sanyo,”
Japanese Patent Pub. Tokukaihei 2011-191562, or
“Glenn,” U.S. Patent No. 6,433,277.
Hitachi discloses a method for producing a semicon-
ductor device on a circuit board or lead frame. Nichia,
2016 WL 310142, at *8. The district court found that
Hitachi failed to disclose several elements of the ’250
patent’s claims. Claim 1 requires a “notch” and “cutting
the resin-molded body and the plated lead frame along
the at least one notch to form a resin package,” ’250
patent col. 19 ll. 47–48 (claim 1), neither of which Hitachi
discloses. Nichia, 2016 WL 310142, at *17. These find-
ings are supported by expert testimony, J.A. 20797–98
(Schubert), and by Hitachi itself, J.A. 10249 (Fig. 6,
showing dicing lines, 20). Indeed, Hitachi is criticized in
2 Everlight also argues that the district court
wrongly found it infringed claims 1 and 7 under § 271(g).
Because Everlight’s products directly infringe claims of
the ’250 patent under § 271(a), we do not reach whether
Everlight also infringed claims under § 271(g).
12 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
the ’250 patent’s specification for having a design that
results in detachment of the packaging resin from the
lead frame during singulation. See ’250 patent col. 2
ll. 18–19, 30–35 and Fig. 19(a) (reproduced from Hitachi).
The ’250 patent solves this problem by providing a manu-
facturing method and LED device in which the lead frame
has “notch[es]” and “the thermosetting resin is filled in
the notch parts, and therefore an adhering area between
the lead frame and the thermosetting resin becomes large,
so that it is possible to improve adhesion.” Id. at col. 3
ll. 8–12. We thus conclude that, despite Everlight’s
arguments to the contrary, these findings are not clearly
erroneous.
Everlight argues that it would have been obvious to
combine Hitachi with Glenn and Sanyo to achieve the
claimed invention. Glenn discloses a method of making
packages for integrated circuit dies. Nichia, 2016 WL
310142, at *19. Sanyo is directed to a method for produc-
ing a semiconductor device. Id.
The court found that a person of ordinary skill would
not have considered Glenn or Sanyo to modify Hitachi
because “the different considerations in the design and
manufacture of electronic and optoelectronic [e.g., LED]
devices result in substantial differences in the manufac-
turing processes and materials used in the different
technologies,” and “a change in the design or manufacture
of an LED or other optoelectronic device requires the
consideration of factors—including factors such as light
emission, and the effects of heat and emitted radiation on
different resins and other materials—that are not rele-
vant to the design and manufacture of electronic semicon-
ductor devices.” Id. at *21.
These findings are supported by expert testimony, in-
cluding Everlight’s expert’s admission that electronic
device technology is not particularly relevant to LED
technology. J.A. 20543–44. Because the weight of the
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 13
evidence supports the court’s finding that there was no
motivation to combine these references, we affirm the
court’s conclusion that Everlight failed to prove that the
’250 patent would have been obvious.
B.
We next examine the ’870 patent. Again, Everlight
challenges the district court’s determination that it in-
fringes and that it did not prove the patent obvious.
1.
The ’870 patent discloses an LED design that pur-
portedly minimizes structural problems caused by compo-
nents expanding and contracting at different rates during
thermal cycling. ’870 patent col. 1 ll. 38–49. The design
is a molded package with “a specific feature, a wall por-
tion,” that separates the positive and negative leads.
Nichia, 2016 WL 310142, at *36 (internal quotation
omitted). “[T]his wall portion improves structural integri-
ty, particularly if the device is subject to temperature
variations so that package cracking, detachment of the
encapsulation material, and warping of the package is
reduced or avoided.” Id. (internal quotation omitted).
The package also includes a semiconductor, such as a
light emitting semiconductor. Claim 7 is reproduced
below:
7. A light emitting device comprising:
a light emitting element;
a molded member having a recess formed
therein by a bottom surface and a side surface
so as to mount said light emitting element in
substantially a center of the recess;
a positive lead electrode partially disposed on
the bottom surface and adjacent to the side
surface in the recess and extending outwardly
from said molded member;
14 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
a negative lead electrode partially disposed on
the bottom surface and adjacent to the side
surface in the recess and extending outwardly
from said molded member;
means for electrically connecting said light
emitting element to said positive lead elec-
trode, and said light emitting element to said
negative lead electrode;
wherein a portion of said positive lead elec-
trode and a portion of said negative lead elec-
trode in the recess are separated from each
other by a wall portion; wherein said wall por-
tion extends inwardly in a direction toward
the center of the recess.
’870 patent col. 35 ll. 22–42.
2.
Everlight argues that its products do not meet the
’870 patent’s requirement that its positive and negative
lead electrodes are “partially disposed” on the bottom
surface of a recess. Specifically, Everlight claims that the
court wrongly defined the “bottom” of the recess in its
products. The recess’s bottom, it argues, extends to the
uppermost extension of resin. This bottom is a flat line.
Everlight does not dispute, however, that shallow gaps in
the resin expose the leads.
The court repeatedly rejected Everlight’s position and
found the disputed element met. Nichia, 2016 WL
310142, at *39–48. In reaching this conclusion, the court
repeatedly credited Nichia’s expert. See, e.g., id. at *30.
We discern no clear error in the court’s conclusion. But
even more, we find Everlight’s position belied by the
patent itself. The ’870 patent discloses several embodi-
ments where the bottom of the recess is multi-featured.
See, e.g., ’870 patent Figs. 1, 6, 11. Despite Everlight’s
claim to the contrary, the recess is not flat. See id. The
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 15
bottom of the recess, then, is also not flat. Everlight’s
straight-line recess oversimplifies the analysis—the
recess need not be perfectly flat. In turn, the court cor-
rectly concluded that Everlight’s products infringe where
the leads are exposed through gaps in the resin. Ever-
light’s products include these gaps, and thus the district
court properly concluded that the products meet this
claim limitation. As Everlight brings no other challenge
on this issue, we affirm the district court as to Everlight’s
infringement of the ’870 patent.
3.
Everlight also challenges the court’s conclusion that it
failed to prove the ’870 patent invalid. Everlight had
asserted that the ordinary artisan would have combined
“Waitl,” U.S. Patent No. 6,624,491, and “Nitta,” U.S.
Patent No. 6,747,293, to render the ’870 patent claims
obvious. Everlight first challenges the court’s conclusion
that Waitl does not disclose all of the claim elements. It
second challenges the court’s conclusion that the artisan
would not have looked to Nitta to remedy Waitl’s deficien-
cies.
Waitl notes that separation can result when different
materials expand at different rates, so it teaches designs
to help minimize separation. Nichia, 2016 WL 310142, at
*49. Entitled “diode housing,” Waitl “is directed to prob-
lems in the operation of a device stemming from delami-
nation—a situation in which the ‘window’ encapsulant
material separates from the metal frame of the device.”
Id.
Waitl’s device includes a lead electrode with a single
exposed area, id., but the claims require the lead elec-
trode to have two exposed portions, one positive and one
negative, separated by a wall. The court found that Waitl
failed to disclose elements related to these positive and
negative electrodes as claimed in the ’870 patent. Ever-
light does not challenge the court’s reading of Waitl.
16 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
Everlight instead argues that a person of ordinary
skill in the art would have been motivated to modify Waitl
in light of Nitta to achieve the claimed invention. Nitta
appears to disclose a wall between two electrodes, as it is
directed to a light emitting device with a “plurality of
chips efficiently disposed” in a housing with a “lead hav-
ing a slit formed between a portion for bonding a wire to
and a portion for mounting chips on, thereby to prevent
extrusion of an adhesive and eliminate defective bonding.”
Id. at *50 (quoting Nitta, Abstract).
But the court found that a person of ordinary skill in
the art would have had no motivation to modify Nitta in
light of Waitl. We agree. The court found that the refer-
ences disclose different structures, resolve dissimilar
problems, and propose dissimilar solutions. Id. at *51–53.
The court’s conclusion derives further support from its
earlier finding that artisans in this field face myriad
design challenges because small design changes may
cause unpredictable results and because design considera-
tions often pull in multiple directions. Id. at *4. We
determine that the court’s finding on motivation to com-
bine is not clearly erroneous. We thus affirm the district
court’s conclusion that Everlight failed to prove the ’870
patent invalid as obvious.
C.
We now reach the ’589 patent, the third and final pa-
tent Nichia asserted against Everlight. The court found
Everlight infringed claims 1 and 2 of the ’589 patent and
that Everlight had failed to prove the patent invalid.
Everlight again appeals the court’s holdings on infringe-
ment and validity.
1.
The ’589 patent is also directed to the design of a sem-
iconductor device. The disclosed design seeks to prevent
adhesive from overflowing into other areas of the device.
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 17
Specifically, the ’589 patent states that “an object of the
present invention is to provide a semiconductor device
wherein the adhesive components do not overflow nor
leak to the wire bonding area even when . . . adhesive
components having low surface tension [are] used in the
adhesive layer for die bonding, and the overflow and leak
preventing function can be maintained satisfactorily even
when the device is made smaller and thinner.”
’589 patent col. 2 ll. 60–67. Claim 1 of the ’589 patent
requires the following:
1. A semiconductor device comprising:
a semiconductor element having a pair of elec-
trodes;
a housing having a recess for accommodating
the semiconductor element;
a first lead electrode and a second lead elec-
trode exposed on the bottom surface of said re-
cess;
an adhesive layer for die bonding between the
semiconductor element and the first lead elec-
trode; and
electrically conductive wires for wire bonding
between one electrode of the pair of electrodes
of the semiconductor element and the first
lead electrode and between the other electrode
and the second lead electrode;
wherein the housing has at least one wall
formed to extend across the bottom surface of
the recess so as to divide the surface of the
first lead electrode into a die bonding area and
a wire bonding area;
the first lead electrode has a notch which is
formed by cutting off a portion of an edge of
18 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
the first lead electrode and located at least
just below the wall; and
the wall and the bottom portion of said hous-
ing are connected to each other through the
notch.
Id. at col. 15 l. 59 – col. 16 l. 13.
2.
Everlight challenges the court’s finding that it in-
fringes the ’589 patent with the same arguments that it
made against its infringement of the ’870 patent. Ever-
light Br. 32–33. For the same reasons we affirmed the
court’s infringement finding with respect to the ’870
patent, we affirm its finding of infringement with respect
to the ’589 patent. See, supra, Discussion B.2.
3.
Everlight also challenges the court’s conclusion that it
did not prove the ’589 patent invalid by asserting that it
would have been obvious to a person of ordinary skill in
light of “Nakashima,” U.S. Patent Pub. No. 2004/0256706,
and “Kim,” U.S. Patent Pub. No. 2006/0170083.
Nakashima discloses “a molded package for an LED
device that reduces the likelihood of delamination—that
is, detachment of the encapsulating resin from the pack-
age.” Nichia, 2016 WL 310142, at *32. The device has a
circular recess and three exposed metal members. Id.
The court found that Nakashima failed to disclose a wall
that divides the surface of a lead electrode, a notch in the
lead, and a few other claimed features. Id. at *33.
Kim discloses a side-view LED designed to enhance
the flow of resin into the side wall. Id. at *34. Kim
explains that, to achieve these dimensions, “endeavors
have been made to reduce the thickness of the upper and
lower wall parts around an LED window. However,
reducing the wall part thickness is an extremely difficult
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 19
task. This task also potentially weakens wall strength
thereby failing to ensure reliability.” Id. (quoting Kim,
¶ [0006]). The court found Kim failed to meet several of
the ’589 patent’s claimed features, including having a wall
across the bottom of the recess. Id. at *34–35.
The court also found that a person of ordinary skill in
the art would not have been motivated to combine
Nakashima and Kim. Specifically, it found that the two
references “are not directed to similar packages,” and
“describe different structures”: “Kim relates to thin, side-
view LEDs, while Nakashima relates to a top-view LED
with a recess that includes three metal members partially
covered by a wall portion.” Id. at *35. Moreover, the
court found that the two references “address different
problems in packaging structures and disclose different
solutions”: “Kim contemplates that the structure that
promotes resin flow will be embedded in the body of the
package itself,” while “Nakashima is concerned about
delamination of the encapsulant material as a result of
different coefficients of thermal expansion among the
different package materials.” Id. We conclude that these
findings are not clearly erroneous and are supported by
the weight of the evidence. See, e.g., J.A. 20785–86. We
thus affirm the district court’s conclusion that one of
ordinary skill in the art would not have been motivated to
combine these two references and thus the references did
not render the ’589 patent obvious.
II.
Finally, Nichia challenges the district court’s decision
to deny its request for permanent injunctive relief. The
district court held that Nichia failed to show that it had
suffered irreparable harm and that remedies at law
provided Nichia inadequate compensation. Nichia, 2016
WL 310142, at *65–67. Nichia challenges both conclu-
sions. Because we affirm the court’s conclusion on irrepa-
20 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
rable harm, we do not reach the adequacy of monetary
damages.
A.
We review a district court’s grant or denial of a per-
manent injunction for an abuse of discretion. Robert
Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1149 (Fed.
Cir. 2011). “We may find an abuse of discretion on a
showing that the court made a clear error of judgment in
weighing relevant factors or exercised its discretion based
upon an error of law or clearly erroneous factual find-
ings.” Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363,
1379 (Fed. Cir. 2008) (internal quotation marks omitted).
A permanent injunction is an equitable remedy.
Weinberger v. Romero-Barcelo, 456 U.S. 305, 311 (1982).
“It ‘is not a remedy which issues as of course,’ or ‘to re-
strain an act the injurious consequences of which are
merely trifling.’” Id. (citation omitted) (quoting Harrison-
ville v. W.S. Dickey Clay Mfg. Co., 289 U.S. 334, 337–38
(1933) and Consol. Canal Co. v. Mesa Canal Co., 177 U.S.
296, 302 (1900)).
“According to well-established principles of equity, a
plaintiff seeking a permanent injunction must satisfy a
four-factor test before a court may grant such relief.”
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391
(2006). A party seeking an injunction must demonstrate:
“(1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that, consid-
ering the balance of hardships between the plaintiff and
defendant, a remedy in equity is warranted; and (4) that
the public interest would not be disserved by a permanent
injunction.” Id.
Historically, “courts have granted injunctive relief up-
on a finding of infringement in the vast majority of patent
cases.” Id. at 395 (Roberts, J., concurring). That this long
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 21
history exists “is not surprising” given the nature of
patent rights. Id. Patent rights are property rights, and
central to those rights is the right to exclude. Florida
Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav.
Bank, 527 U.S. 627, 642–43 (1999); see also Thomas W.
Merrill, Property and the Right to Exclude, 77 Neb. L.
Rev. 730, 740–52 (1998) (discussing the “primacy of the
right to exclude”). The Supreme Court often reaffirms
this principle—that “the right to exclude others” is “one of
the most essential sticks in the bundle of rights that are
commonly characterized as property.” Kaiser Aetna v.
United States, 444 U.S. 164, 176 (1979); see also Dolan v.
City of Tigard, 512 U.S. 374, 384 (1994); Nollan v. Cal.
Coastal Comm’n, 483 U.S. 825, 831 (1987). Our court has
similarly observed that “[w]hile a patentee is not entitled
to an injunction in every case, ‘it does not follow that
courts should entirely ignore the fundamental nature of
patents as property rights granting the owner the right to
exclude.’” Presidio Components, Inc. v. Am. Tech. Ceram-
ics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) (quoting
Robert Bosch, 659 F.3d at 1149).
But an injunction in patent law must be justified like
any other: “the moving party must satisfy the court that
relief is needed.” United States v. W. T. Grant Co.,
345 U.S. 629, 633 (1953). The movant must prove that it
meets all four equitable factors. i4i Ltd. P’ship v. Mi-
crosoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010). And it
must do so on the merits of its particular case. eBay,
547 U.S. at 391.
B.
Nichia challenges the district court’s finding that it
failed to establish that it will suffer irreparable harm
absent an injunction. The court’s conclusion relied on
several findings, each weighing against Nichia. Specifi-
cally, the court found that “[t]he record shows an absence
of meaningful competition.” Nichia, 2016 WL 310142,
22 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
at *65. It found that Nichia had “failed to establish past
irreparable harm, or the likelihood of irreparable harm in
the future based on lost sales” or “based on price erosion.”
Id. at *66. It found that Nichia’s licensing of the patents
to major competitors suggested that harm from “in-
fringement of the patents-in-suit is not irreparable.” Id.
And it found that Nichia’s licensing practices have made
“multiple low-priced non-infringing alternatives from
competitors available to replace the accused Everlight
products if such products were not available.” Id. Nichia
contests these findings.
Nichia first argues that the court abused its discretion
when it found a lack of “meaningful competition” between
the parties. Nichia asserts that the court should have
deferred to the parties’ stipulation that “Nichia and
Everlight are competitors.” J.A. 2112, ¶ 148. It further
claims that the trial record “abounds” with Everlight
documents identifying Nichia as a competitor. Nichia
Br. 34. It points to internal Everlight documents identify-
ing Nichia as a competitor, J.A. 2222, 2466–69, 3007–08,
and an Everlight Annual Report identifying Nichia as a
“major competitor,” J.A 2783–84, 2788. And it argues
that Everlight stipulated that it targeted some of Nichia’s
customers with offers to sell infringing products.
J.A. 2113–14, ¶¶ 158–64. Nichia contends that these
showings undermine the district court’s finding that
Nichia and Everlight are not meaningful competitors.
Nichia also argues that the court misunderstood the
LED market. Nichia claims that this market is a “design-
win” market where customers require suppliers like
Everlight and Nichia to “design-in” a product before
receiving an order. J.A. 20254–61 (Swenson); J.A. 20424
(Kammerer); J.A. 20304 (Liu) (“For the end customer,
there—there has to be some sort of design-in before
there’s an order.”); J.A. 20315 (Liu) (“You—you have to
get designed-in to be able to get an order.”). During the
“design in” process, customers test and certify LEDs,
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 23
which leads to a reticence to substitute competing LEDs
for the product’s life cycle. Nichia argues that this char-
acteristic of the LED market makes it likely that in-
fringement will cause long-term, irreparable harm.
We disagree, not because we question the facts as
Nichia presents them, but because the court heard these
arguments as the original finder of fact and concluded to
the contrary, carefully weighing both parties’ evidence.
The court found that Nichia is an LED chip manufacturer
as well as a packager, “while Everlight is solely an LED
packager.” Nichia, 2016 WL 310142, at *53. The court
also found that the two companies generally sell to differ-
ent parties: “Everlight generally sells to distributors
rather than directly to customers, as Nichia does.” Id.
Moreover, despite the parties’ stipulation that they com-
peted in the same market, J.A. 2112, ¶ 148, the court
found that Nichia failed to prove that this competition
was meaningful, Nichia, 2016 WL 310142, at *65. The
court explained that Everlight’s competition accounted for
“the proverbial ‘drop in the bucket,’” when compared to
Nichia’s total sales. Id. Nichia identified 516 sales oppor-
tunities, with Everlight as a competitor in only 3. Id. In
light of these findings, the court noted that there was “a
very small area of possible competition,” but it concluded
that there was an “absence of actual competition.” Id.
The court closed its market-competition analysis by
observing that the “justification for an injunction is re-
mote indeed.” Id.
The court also disagreed with Nichia’s contention that
it would suffer future irreparable harm because of past
lost sales. Id. at *66. The court found that Nichia “failed
to establish that [Everlight was] responsible for causing a
single lost sale in the U.S.” Id. Nichia claimed one in-
stance of a lost sale, but the court concluded that the
evidence showed “several other formidable, lower-priced,
and licensed competitors for the same opportunity.” Id.
Additionally, Nichia’s expert “admitted he made no at-
24 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
tempt to establish ‘but for’ causation that Nichia America
would have made the sale . . . in the absence of Everlight’s
claimed infringement.” Id. In short, Nichia did not prove
that it had suffered even a single lost sale from Ever-
light’s infringement.
Nichia also had alleged that it suffered price erosion
because of Everlight’s infringement in a sale to General
Electric. While Nichia eventually won the GE contract, it
sold its products at a price lower than it originally offered.
J.A. 20266–69. Nichia presented evidence that it had
lowered its price to compete against Everlight’s infringe-
ment and that this infringement caused this price erosion.
The court disagreed. Nichia, 2016 WL 310142, at *66.
It explained that Nichia’s lower-price sale to GE had been
required by GE, so “Nichia was going to have to lower its
prices, regardless of Everlight’s competition.” Id. Fur-
ther, the court found that several licensed competitors
had offered products at lower prices, independent of
Everlight, which drove down prices. The court further
pointed to Nichia’s admission that it had already sold
LEDs at the lower price to GE’s competitors in the same
period and that this lower price made it “impossible to
maintain” a higher price with GE. Id. And the court
credited Nichia’s expert’s admission that the evidence was
insufficient to establish price erosion and that he did not
attempt a price-erosion analysis. The court concluded
that, in light of these evidentiary deficiencies, Nichia
“cannot establish that Everlight was the ‘but for’ cause of
its claimed price erosion.” Id. We find no clear error in
the court’s finding that Nichia failed to establish price
erosion from Everlight’s infringement.
Nichia further contests the court’s findings with re-
spect to Nichia’s licensing activities. Nichia argues that
the court wrongly found that its licensing activities pre-
cluded a finding of irreparable harm. Nichia argues that
NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC. 25
the court’s decision is contrary to settled law, as it applies
a categorical rule that licenses preclude irreparable harm.
To the extent the court adopted a categorical rule, we
agree with Nichia; such a rule would run afoul of our
precedent. We have explained, for example, that “[a]
plaintiff’s past willingness to license its patent is not
sufficient per se to establish lack of irreparable harm if a
new infringer were licensed.” Acumed LLC v. Stryker
Corp., 551 F.3d 1323, 1328 (Fed. Cir. 2008) (citing eBay,
547 U.S. at 393).
But to the extent that the court found that Nichia’s
prior licenses weighed against a finding of irreparable
harm, we countenance that approach. While evidence of
licensing activities cannot establish a lack of irreparable
harm per se, that evidence can carry weight in the irrepa-
rable-harm inquiry. We have previously explained that
“[t]he fact of the grant of previous licenses, the identity of
the past licensees, the experience in the market since the
licenses were granted, and the identity of the new infring-
er all may affect the district court’s discretionary decision
concerning whether a reasonable royalty from an infring-
er constitutes damages adequate to compensate for the
infringement.” Id. The court’s findings on licensing
traversed these considerations. The court found that
several of Nichia’s licenses were to “significant competi-
tors” who posed “major threats” to Nichia’s flagship
products. Nichia, 2016 WL 310142, at *66. And the court
found that these licenses changed the market by making
available “multiple low-priced non-infringing alterna-
tives.” Id. These findings, the court concluded, supported
a finding that “Nichia ha[d] failed to establish it will
suffer irreparable harm in the absence of an injunction.”
Id.
In any event, regardless of the court’s analysis of the
licenses, we note that the court treated Nichia’s licenses
as an independent ground for denying the injunction. Id.
26 NICHIA CORPORATION v. EVERLIGHT AMERICAS, INC.
It did not rely on Nichia’s licenses in its earlier analysis of
irreparable harm, but rather found the licenses to further
bolster its prior finding. Id. The court’s licensing analy-
sis thus does not undermine its separate findings that
Nichia failed to establish market competition, lost sales,
and price erosion, and that these failures all weigh
against a conclusion that Nichia would suffer irreparable
harm absent an injunction. Id.
We discern no clear error in the district court’s finding
that Nichia failed to prove that it would suffer irreparable
harm absent the injunction. On that traditional equitable
factor, Nichia did not bear its burden. See W. T. Grant
Co., 345 U.S. at 633. Because Nichia failed to establish
one of the four equitable factors, the court did not abuse
its discretion in denying Nichia’s request for an injunc-
tion.
CONCLUSION
We discern no error in the court’s conclusions that
Everlight infringed all asserted claims and failed to prove
those claims invalid by clear and convincing evidence. We
also conclude that the court did not abuse its discretion in
denying Nichia’s request for a permanent injunction. We
therefore affirm.
AFFIRMED
COSTS
No costs.