UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Rudolph Technologies, Inc.,
a Delaware corporation,
Case No. 15-cv-1246 (WMW/BRT)
Plaintiff,
ORDER GRANTING IN PART AND
v. DENYING IN PART PLAINTIFF’S MOTION FOR PARTIAL SUMMARY
Camtek Ltd.,
a foreign corporation, JUDGMENT
Defendant.
This matter is before the Court on Plaintiff Rudolph Technologies, Inc.’s
(“Rudolph”) motion for partial summary judgment. (Dkt. 151.) Rudolph contends that
Defendant Camtek Ltd.’s (“Camtek”) invalidity arguments and claim construction
arguments in this case are foreclosed by issue preclusion in light of prior litigation
between the same parties. For the reasons addressed below, the Court grants in part and
denies in part the motion.
BACKGROUND
I. Prior Litigation
August Technology Corp. (“August Technology”) developed the inventions
described in United States Patent No. 6,826,298 (“the ’6,298 Patent”). August Tech.
Corp. v. Camtek, Ltd., No. 05-cv-1396, Dkt. 268 at 2. Rudolph subsequently purchased
August Technology, and Rudolph and August Technology became co-owners of the
’6,298 Patent. Id. Rudolph makes and sells automated visual inspection systems for the
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microelectronics industry, including systems for secondary inspection of semiconductor
wafers. Id. Camtek and Rudolph are direct competitors in the secondary wafer
inspection market. Id. On July 14, 2005, August Technology commenced a patent-
infringement action against Camtek in this district, alleging that Camtek’s Falcon wafer
inspection product infringed certain claims, including claims 1 and 3, of the ’6,298 Patent
(“Falcon Litigation”). Id., Dkt. 1.
At the claim-construction stage of the Falcon Litigation, the parties identified
eleven disputed terms in the asserted patent claims, and the district court resolved those
disputes in a written order (“Falcon Claim Construction Order”). Id., Dkt. 268 at 5. The
Falcon Litigation proceeded to a jury trial in February 2009. The jury returned a special
verdict, finding among other things, that Camtek’s Falcon product literally infringed
claims 1 and 3 of the ’6,298 Patent and that Camtek failed to prove that the ’6,298 Patent
is invalid. Id., Dkt. 466. The district court denied Camtek’s post-trial motions for
judgment as a matter of law as to both infringement and invalidity. Id., Dkt. 644.
Camtek appealed.
The Federal Circuit affirmed in part, vacated in part, and remanded the Falcon
Litigation for further proceedings. August Tech. Corp. v. Camtek, Ltd., 655 F.3d 1278
(Fed. Cir. 2011). Specifically, as relevant here, the Federal Circuit (1) modified the
district court’s construction of the claim term “wafer” and remanded for a limited trial on
infringement with respect to a claim element of the ’6,298 Patent affected by the
modified claim construction, and (2) concluded that substantial evidence supported the
jury verdict regarding the validity of the ’6,298 Patent. Id. at 1286-87.
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On March 31, 2014, the district court granted Rudolph’s motion for summary
judgment of infringement on the limited issue remanded by the Federal Circuit.
Following additional motion practice and the entry of judgment by the district court,
Camtek appealed and the Federal Circuit affirmed without a written opinion. Rudolph
Techs., Inc. v. Camtek, Ltd., 632 F. App’x 620 (Fed. Cir. 2016).
II. Current Litigation
On March 12, 2015, Rudolph commenced this patent-infringement action against
Camtek, alleging that Camtek’s Eagle product infringes the same claims of the ’6,298
Patent that Rudolph had asserted against Camtek in the Falcon Litigation. In its Answer,
Camtek advanced a number of defenses including, as relevant here, that “[e]ach claim of
the ’6,298 patent is invalid for failing to meet one or more of the requirements or
conditions for patentability under Title 35 of the United States Code, including without
limitation, §§ 101, 102, 103, and/or 112.”
On November 18, 2015, Rudolph sought the Court’s leave to file an early motion
for partial summary judgment regarding invalidity, asserting that Camtek is precluded
from relitigating the alleged invalidity of the ’6,298 Patent because Camtek previously
litigated that issue and lost in the Falcon Litigation. On December 7, 2015, the Court
denied Rudolph’s request for leave without prejudice and directed the parties not to file
another such request until after the parties have filed their joint status report on claim
construction.
On January 11, 2016, the parties filed their joint status report on claim
construction. (Dkt. 142.) The joint status report included a claim chart listing each
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disputed claim term in the ’6,298 Patent. Camtek indicated that it intends to seek the
Court’s construction of seven claim terms. In contrast, Rudolph asserted that no claim
construction is necessary because issue preclusion applies to each of the disputed claim
terms and, therefore, the district court’s construction of those terms in the Falcon
Litigation is controlling in this case. On March 10, 2016, the Court granted Rudolph’s
request for leave to file the present motion for partial summary judgment regarding the
application of issue preclusion to both patent invalidity and claim construction.
ANALYSIS
I. Legal Standards
Summary judgment is proper when there are no genuine issues of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). When
considering a motion for summary judgment, the district court views the facts in the light
most favorable to the nonmoving party. Shelter Ins. Cos. v. Hildreth, 255 F.3d 921, 924
(8th Cir. 2001). Summary judgment is properly granted only when no reasonable jury
could return a verdict for the nonmoving party. Id. The moving party bears the burden to
produce sufficient evidence to establish that “there are no genuine issues of material fact
and that the movant is entitled to judgment as a matter of law.” Id.
Issues unique to patent cases are governed by Federal Circuit precedent. Aspex
Eyewear, Inc. v. Zenni Optical Inc., 713 F.3d 1377, 1380 (Fed. Cir. 2013). However,
with respect to procedural issues that are not unique to the Federal Circuit’s exclusive
jurisdiction over patent matters, such as issue preclusion, the law of the regional circuit
applies. Dana v. E.S. Originals, Inc., 342 F.3d 1320, 1323 (Fed. Cir. 2003). Issue
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preclusion bars a party from relitigating an issue that was actually adjudicated in previous
litigation between the same parties. Sandy Lake Band of Mississippi Chippewa v. United
States, 714 F.3d 1098, 1102 (8th Cir. 2013). “A party is precluded from litigating such a
matter in a subsequent case, whether or not the issue arises on the same or a different
claim.” Id. (citation omitted) (internal quotation marks omitted). In the Eighth Circuit,
issue preclusion has five elements:
(1) the party sought to be precluded in the second suit must have been a
party, or in privity with a party, to the original lawsuit; (2) the issue sought
to be precluded must be the same as the issue involved in the prior action;
(3) the issue sought to be precluded must have been actually litigated in the
prior action; (4) the issue sought to be precluded must have been
determined by a valid and final judgment; and (5) the determination in the
prior action must have been essential to the prior judgment.
Id. at 1102-03 (citing Robinette v. Jones, 476 F.3d 585, 589 (8th Cir. 2007)).
II. Issue Preclusion as to Patent Invalidity
The parties first dispute whether Camtek’s invalidity arguments in this case are
foreclosed by issue preclusion. It is undisputed that the parties in this case are the same
as in the Falcon Litigation, that the alleged invalidity of the ’6,298 Patent was actually
litigated in the Falcon Litigation on certain grounds, that the Falcon Litigation resulted in
a valid and final judgment with respect to invalidity on those grounds, and that the
invalidity determination in the Falcon Litigation was essential to that judgment.
The parties’ present dispute, therefore, is limited to defining the scope of the
“issue” on which litigation is foreclosed by the prior judgment in the Falcon Litigation.
This dispute implicates the second element of the Eighth Circuit’s issue preclusion test—
namely, whether the invalidity issue in this case is “the same as” the invalidity issue that
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was actually litigated and determined in the Falcon Litigation. Rudolph argues that all of
Camtek’s invalidity defenses are foreclosed, regardless of whether Camtek advanced the
particular theory or evidence of invalidity in the Falcon Litigation, because “invalidity” is
a single issue. Rudolph contends that the concepts of “arguments” and “issues” should
not be conflated. In contrast, Camtek asserts that only the specific grounds for invalidity
that Camtek advanced in the Falcon Litigation are precluded here, and that it should be
free to advance alternative grounds for invalidity in this case.1 Therefore, the Court must
determine, for the purpose of issue preclusion, whether the scope of the “issue” of patent
invalidity (1) embraces all grounds for invalidity as a single issue or (2) is limited to the
grounds for invalidity Camtek advanced in the Falcon Litigation.
A. The Scope of the Issue Subject to Preclusion
The parties have not identified, and the Court is unaware of, any precedent in this
circuit or the Federal Circuit directly addressing whether patent invalidity is a single issue
for the purpose of issue preclusion. See Evonik Degussa GmbH v. Materia Inc., 53 F.
Supp. 3d 778, 793 (D. Del. 2014) (observing that “the Federal Circuit has yet to rule
conclusively on this matter”). Therefore, the Court begins by examining the principles
underlying issue-preclusion doctrine.
1 In the Falcon Litigation, Camtek challenged and litigated the validity of the ’6,298
Patent on the following grounds: on-sale bar, pursuant to 35 U.S.C. § 102; obviousness,
pursuant to 35 U.S.C. § 103; and indefiniteness, pursuant to 35 U.S.C. § 112. August
Tech., No. 05-cv-1396, Dkt. 294, 466. In this case, Camtek challenges the validity of the
’6,298 Patent on the following grounds: anticipation, pursuant to 35 U.S.C. § 102;
obviousness, pursuant to 35 U.S.C. § 103; and lack of adequate written description, lack
of enablement and indefiniteness, pursuant to 35 U.S.C. § 112.
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Issue preclusion serves “the dual purpose of protecting litigants from the burden of
relitigating an identical issue with the same party or [that party’s] privy and of promoting
judicial economy by preventing needless litigation.” Parklane Hosiery Co., Inc. v. Shore,
439 U.S. 322, 326 (1979). The doctrine is rooted in concerns for judicial economy.
Simmons v. O’Brien, 77 F.3d 1093, 1095 (8th Cir. 1996). Central to the fair
administration of issue-preclusion doctrine “is the notion that a party will be bound only
if it had ‘an adequate opportunity or incentive to obtain a full and fair adjudication in the
first proceeding.’ ” Id. (quoting Restatement (Second) of Judgments § 28 cmt. j).
Outside of the patent context, the Eighth Circuit has recognized the “significant
line of cases suggesting that litigation of an issue necessarily encompasses all arguments
and evidence that could be presented to resolve the issue, and that the mere discovery of
new evidence does not create a new issue.” Liberty Mut. Ins. Co. v. FAG Bearings Corp.,
335 F.3d 752, 762-63 (8th Cir. 2003) (collecting cases). “ ‘[O]nce an issue is raised and
determined, it is the entire issue that is precluded, not just the particular arguments raised
in support of it in the first case.’ ” Id. at 762 (emphasis and alteration in original)
(quoting Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992)).
This Court sees no reason why these principles should not apply with equal force in the
context of patent invalidity.
The Restatement (Second) of Judgments (“Restatement”) provides additional
insight into the principles underlying issue preclusion. Both the Eighth Circuit and the
Federal Circuit look to the Restatement for guidance with respect to issue preclusion.
E.g., id.; Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1362 (Fed. Cir. 2000). The
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Restatement acknowledges that one of the most difficult tasks in applying issue
preclusion is the question currently before the Court—namely, how “to delineate the
issue on which litigation is, or is not, foreclosed by the prior judgment,” which “involves
a balancing of important interests: on the one hand, a desire not to deprive a litigant of an
adequate day in court; on the other hand, a desire to prevent repetitious litigation of what
is essentially the same dispute.” Restatement (Second) of Judgments § 27 cmt. c. The
Restatement identifies four factors that courts should consider when determining whether
an issue in a successive proceeding is identical to a previously litigated issue:
[1] Is there a substantial overlap between the evidence or argument to be
advanced in the second proceeding and that advanced in the first? [2] Does
the new evidence or argument involve application of the same rule of law
as that involved in the prior proceeding? [3] Could pretrial preparation and
discovery relating to the matter presented in the first action reasonably be
expected to have embraced the matter sought to be presented in the second?
[4] How closely related are the claims involved in the two proceedings?
Id. The Restatement and the foregoing factors provide an instructive framework for
resolving the present dispute.
With respect to the first Restatement factor, any new theories of invalidity would
require Camtek to present substantially the same evidence and arguments that Camtek
presented in the Falcon Litigation—namely, an analysis of the ’6,298 Patent and a
comparison of prior art to the asserted patent claims from the perspective of a person of
ordinary skill in the art. As to the second Restatement factor, the same rule of law would
apply because all patent invalidity defenses arise from 35 U.S.C. § 282 and must be
proved by clear and convincing evidence to overcome the statutory presumption of patent
validity. See Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 95 (2011). With respect to
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the third Restatement factor, it is reasonable to expect that the several years of discovery
and pretrial preparation in the Falcon Litigation embraced all possible invalidity theories,
whether or not Camtek ultimately advanced every theory in a dispositive motion or at
trial. As such, Camtek had both “an adequate opportunity” and the “incentive to obtain a
full and fair adjudication” of invalidity in the Falcon Litigation. See Simmons, 77 F.3d at
1095. Finally, the claims advanced in the two proceedings are closely related—both
involve the alleged infringement of claims 1 and 3 of the ’6,298 Patent by one of
Camtek’s products and, in turn, the alleged invalidity of the ’6,298 Patent. Thus, all four
Restatement factors weigh in favor of concluding that the scope of the issue that is
subject to issue preclusion encompasses all invalidity theories and arguments that
Camtek advances in this case.
The Restatement also offers the following illustration that is analogous to the
circumstances in this case and lends additional support to the foregoing conclusion:
A brings an action against B to recover for personal injuries in an
automobile accident. A seeks to establish that B was negligent in driving at
an excessive rate of speed. After trial, verdict and judgment are given for B.
In a subsequent action by B against A for injuries in the same accident, A is
precluded from setting up B’s negligence as a defense, whether or not the
alleged negligence is based on an assertion of excessive speed. It is
reasonable to require A to bring forward all evidence in support of the
alleged negligence in the initial proceeding.
Restatement (Second) of Judgments § 27 cmt. c, illus. 4 (emphasis added). This
illustration is consistent with the Eighth Circuit’s analysis in Liberty Mutual, 335 F.3d at
762-63, and indicates that issue preclusion applies even if the underlying theory or
evidence proffered in the second action is different. Indeed, if the “negligence” issue in
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this illustration were replaced with “patent invalidity,” the same principle would warrant
application of issue preclusion to all of Camtek’s grounds for invalidity advanced in this
case.
Moreover, persuasive authority from other federal district courts also weighs in
favor of treating invalidity as a single issue for the purpose of issue preclusion. For
example, in Applied Medical Resources Corp. v. U.S. Surgical Corp. (Applied II), the
United States District Court for the Central District of California rejected the accused
infringer’s argument that only the particular grounds for invalidity advanced in the prior
litigation (Applied I) should be precluded. 352 F. Supp. 2d 1119, 1124-27 (C.D. Cal.
2005). The accused infringer asserted that the prior verdict resolved only four patent
validity issues: anticipation by prior sale, best mode, public use and prior publication. Id.
at 1124. In the subsequent action, the accused infringer advanced different grounds for
invalidity based on prior art that had not been considered in the previous action. Id. at
1124 n.6. The district court concluded that issue preclusion barred the accused infringer
from relitigating not only the grounds for invalidity that it had argued in the first
litigation, but also any new grounds for invalidity raised in the second litigation. Id. at
1126-28. On appeal, the Federal Circuit observed, in dicta, that the “conclusion in
Applied I that the patent is not invalid properly estops [the accused infringer] from
making the same arguments in Applied II. The issue is the same.” Applied Med. Res.
Corp. v. U.S. Surgical Corp., 435 F.3d 1356, 1362 (Fed. Cir. 2006) (emphasis added).
The vast majority of federal district courts that have encountered this question
have reached the same conclusion that the district court reached in Applied II. E.g.,
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Fairchild Semiconductor Corp. v. Power Integrations, Inc., C.A. No. 12-540, 2015 WL
1905871, at *2 (D. Del. Apr. 23, 2015); Evonik, 53 F. Supp. 3d at 792-94; Astrazeneca
UK Ltd. v. Watson Labs., Inc., 905 F. Supp. 2d 596, 602-03 (D. Del. 2012); Roche Palo
Alto LLC v. Apotex, Inc., 526 F. Supp. 2d 985, 994-95 (N.D. Cal. 2007); Meritor
Transmission Corp. v. Eaton Corp., Civil No. 1:04CV178, 2006 WL 3951711, at *4-7
(W.D.N.C. Sept. 26, 2006). Granted, none of these decisions is binding here.
Nonetheless, the Court finds their reasoning compelling, particularly in light of the
Eighth Circuit’s analysis in Liberty Mutual and the Restatement principles outlined
above.
Camtek does not persuasively distinguish the district court’s decision in Applied II
or any of the other decisions that have reached the same conclusion. Camtek asserts that
these decisions “reflect a misunderstanding of patent law” because “a patentee’s rights
under a patent are defined by the claims of the patent.” But this observation has no
material bearing on the Court’s foregoing analysis. The facts remain that the same claims
of the same ’6,298 Patent have been asserted against the same defendant in this case as in
the Falcon Litigation, Camtek had ample opportunity and incentive to receive a full and
fair adjudication of invalidity in the Falcon Litigation, and Camtek took advantage of that
opportunity by actually litigating invalidity in the Falcon Litigation.
Camtek also argues that Applied II and the other similar decisions are based on the
flawed premise that “a district court can hold a patent (claim) to be valid for all eternity.”
But none of these decisions relies on that premise to support its result, nor does this
Court. That Camtek is foreclosed in this case from raising an issue that it previously
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litigated says nothing about the validity of the ’6,298 Patent, nor does it preclude a
different party from challenging the validity of the ’6,298 Patent in another case.
Camtek cites one decision in support of its argument that issue preclusion should
not apply to grounds for invalidity that it did not advance in the Falcon Litigation. See
TASER Int’l, Inc. v. Karbon Arms, LLC, 6 F. Supp. 3d 510 (D. Del. 2013). In TASER, the
United States District Court for the District of Delaware concluded that each theory of
invalidity is a separate issue for the purpose of issue preclusion. Id. at 519. The TASER
court reached its conclusion in one paragraph of minimal analysis that cited only a
secondary source with no binding or persuasive basis for that conclusion. Id. (citing 6
Annotated Patent Digest § 38:46). The TASER decision neither cites nor analyzes the
principles underlying issue-preclusion doctrine, the Restatement, or any of the numerous
federal district court decisions that have reached the opposite conclusion. Accordingly,
this Court is not persuaded by the decision in TASER.
Camtek also argues that policy considerations weigh against treating patent
invalidity as a single issue for the purpose of issue preclusion. As support, Camtek cites
Lear, Inc. v. Adkins, 395 U.S. 653 (1969), in which the Supreme Court of the United
States held that patent licensees are not estopped from challenging the validity of the
licensed patent by virtue of having taken a license. The Supreme Court reasoned that
there are important policies favoring challenges to validity. Lear, 395 U.S. at 663-64.
The Federal Circuit subsequently considered the breadth of the principle described in
Lear, and concluded that “general principles of res judicata apply, despite the policies
favoring challenges to validity expressed in Lear.” Foster v. Hallco Mfg. Co., 947 F.2d
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469, 475 (Fed. Cir. 1991); see also Applied II, 352 F. Supp. 2d at 1126 (rejecting
argument that Lear counsels against treating validity as a single issue for purposes of
issue preclusion, relying on Foster). This Court agrees and concludes that Camtek’s
policy argument is unavailing.
In sum, based on the principles underlying issue-preclusion doctrine, the guidance
provided by the Restatement, and the persuasive reasoning from numerous district courts
that have addressed this question, the Court concludes that patent invalidity is a single
issue for the purpose of issue preclusion. Because the alleged invalidity of the ’6,298
Patent was actually litigated and determined by a valid and final judgment as between
these parties in the Falcon Litigation, and that determination was essential to the prior
judgment, all of the elements of issue preclusion are satisfied. Therefore, Camtek is
precluded from advancing any grounds for invalidity of the ’6,298 Patent in this case.
B. The Change-of-Law Exception
Camtek argues that, even if the elements of issue preclusion are satisfied, issue
preclusion should not foreclose Camtek’s indefiniteness defense because the Supreme
Court’s decision in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014), is
an intervening change in the relevant law.
An exception to issue preclusion is triggered when the controlling principles of
law have changed. Ginters v. Frazier, 614 F.3d 822, 826-27 (8th Cir. 2010); see also
Dow Chem. Co. v. Nova Chems. Corp. (Canada), 803 F.3d 620, 628 (Fed. Cir. 2015).
“Therefore, a court is not bound by a previous decision where there is a change in the
controlling precedent.” Dow, 803 F.3d at 628-29. The change-of-law exception applies
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to both law-of-the-case doctrine and issue preclusion. Ginters, 614 F.3d at 826-27;
Baranski v. United States, 515 F.3d 857, 861 (8th Cir. 2008); see also Dow, 803 F.3d at
628-29. Similar to issue preclusion, law-of-the-case doctrine provides that, “when a
court decides upon a rule of law, that decision should continue to govern the same issues
in subsequent stages of the same case.” Maxfield v. Cintas Corp., No. 2, 487 F.3d 1132,
1134-35 (8th Cir. 2007) (internal quotation marks omitted); accord Dow, 803 F.3d at
627.
In Nautilus, the Supreme Court held that the Federal Circuit’s prior standard for
determining whether a patent is invalid as indefinite was contrary to the governing
statute, 35 U.S.C. § 112, and articulated a new standard to take its place. 134 S. Ct. at
2124. Specifically, the Supreme Court rejected the previous “insolubly ambiguous” or
“amenable to construction” standard and instead held that “a patent is invalid for
indefiniteness if its claims, read in light of the specification delineating the patent, and the
prosecution history, fail to inform, with reasonable certainty, those skilled in the art about
the scope of the invention.” Id. The Federal Circuit subsequently recognized that
Nautilus changed the law regarding patent indefiniteness and that a court may reconsider
indefiniteness arguments decided before Nautilus that would otherwise be precluded
under either issue-preclusion doctrine or law-of-the-case doctrine. Dow, 803 F.3d at 628-
29. As it pertains to law-of-the-case doctrine, the change-of-law exception is available
until the proceeding has reached final judgment. Id. at 628.
In the Falcon Litigation, the district court applied the pre-Nautilus indefiniteness
standard when it denied Camtek’s motion for summary judgment as to invalidity in July
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2008. August Tech., No. 05-cv-1396, Dkt. 294. When the Supreme Court decided
Nautilus on June 2, 2014, this case had not commenced and the Falcon Litigation had not
reached final judgment. Therefore, Camtek’s indefiniteness defense was governed by
law-of-the-case doctrine rather than issue preclusion, and the change-of-law exception
was available to Camtek until the Falcon Litigation reached final judgment. See Dow,
803 F.3d at 627-28.
When the Supreme Court decided Nautilus, the district court in the Falcon
Litigation had granted summary judgment to Rudolph on the limited infringement issue
remanded by the Federal Circuit and the parties were in the midst of briefing additional
post-trial issues before the district court. On February 10, 2015, the district court entered
judgment in the Falcon Litigation, which the Federal Circuit affirmed on February 3,
2016. With approximately eight months between the date Nautilus was decided and the
date the district court entered judgment in the Falcon Litigation, and with another year
before the Federal Circuit affirmed the judgment on appeal, Camtek had ample
opportunity and incentive to raise the change-of-law exception in the Falcon Litigation.
It chose not to. Camtek’s indefiniteness defense, therefore, is no different than any other
ground for invalidity of the ’6,298 Patent that was available to Camtek but not asserted in
the Falcon Litigation. Issue preclusion applies.
Camtek emphasizes that in Dow, the Federal Circuit observed that the change-in-
law exception “applies whether the change in law occurs while the case is before the
district court or while the case is on appeal.” Id. at 629. But that observation only
underscores the fact that nothing prevented Camtek from raising the change-of-law
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exception during the Falcon Litigation, regardless of the procedural posture of the case at
that time. Although Camtek asserts that the scope of live issues in the Falcon Litigation
had been narrowed after remand from the Federal Circuit, that does not explain why
Camtek did not attempt to raise the change-of-law exception before the Falcon Litigation
reached a final judgment. When the Supreme Court decided Nautilus, a new invalidity
argument became available to Camtek. And the change-of-law exception would have
permitted Camtek to raise that argument notwithstanding the district court’s prior
summary judgment ruling in the Falcon Litigation. Camtek did not take advantage of
that opportunity. By not raising the issue, Camtek abandoned that argument, just as it
abandoned any other unasserted invalidity defenses.
Accordingly, the change-of-law exception to issue preclusion does not permit
Camtek to relitigate the issue of indefiniteness in this case.
III. Issue Preclusion as to Claim Construction
The parties also dispute whether issue preclusion applies to the construction of
certain claim terms in the ’6,298 Patent. Specifically, the parties disagree about whether
the construction of claim terms in the Falcon Litigation precludes this Court from
construing the seven disputed claim terms in this case.
At the claim-construction stage, a district court’s duty is “to resolve a dispute
about claim scope that has been raised by the parties.” Eon Corp. IP Holdings v. Silver
Spring Networks, 815 F.3d 1314, 1319 (Fed. Cir. 2016). This duty resides with the court
because “ ‘the ultimate question of construction [is] a legal question.’ ” Id. at 1318
(quoting Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 842 (2015)). Claim-
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construction determinations may be subject to issue preclusion; indeed, previously
construed patent claim terms are not available for redetermination in a subsequent action
that presents the identical claim-construction inquiry. e.Digital Corp. v. Futurewei
Techs., Inc., 772 F.3d 723, 726 (Fed. Cir. 2014); see also Del Mar Avionics, Inc. v.
Quinton Instrument Co., 836 F.2d 1320, 1324 (Fed. Cir. 1987).
When engaging in claim construction, the district court must construe the claims
“independent of the accused product, in light of the specification, the prosecution history,
and the prior art.” Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565,
1580 (Fed. Cir. 1991) (internal quotation marks omitted), overruled on other grounds by
Abbott Labs. v. Sandoz, Inc., 566 F.3d 1282 (Fed. Cir. 2009). Although it is appropriate
for a court to consider the accused device when determining which aspects of the patent
claim should be construed, the claim language itself “is construed in the light of the claim
language . . . not in light of the accused device.” Exigent Tech., Inc. v. Atrana Solutions,
Inc., 442 F.3d 1301, 1309 n.10 (Fed. Cir. 2006) (emphasis in original) (citation omitted)
(internal quotation marks omitted). Claim construction merely elaborates the normally
terse claim language “in order to understand and explain, but not to change, the scope of
the claims.” Scripps, 927 F.2d at 1580. Therefore, issue preclusion may apply to claim-
construction determinations even if the accused product in the first case is different than
the accused product in a subsequent case. See, e.g., e.Digital Corp., 772 F.3d at 726;
Pfaff v. Wells Elecs., Inc., 5 F.3d 514, 516-18 (Fed. Cir. 1993).
As addressed above in Part I, the Eighth Circuit has recognized five elements to
issue preclusion. Sandy Lake, 714 F.3d at 1102. It is undisputed that the parties in this
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case are the same as in the Falcon Litigation and that the Falcon Litigation resulted in a
valid and final judgment. In addition, because Camtek was found to infringe the asserted
claims of the ’6,928 Patent in the Falcon Litigation, and infringement of a patent claim
can occur only if each element of the asserted patent claim is present in the accused
product, any determination of claim scope in the Falcon Litigation necessarily was
essential to the prior judgment. Therefore, the Court’s analysis must focus on the
remaining elements of issue preclusion—namely, whether the disputed claim-
construction issues in this case are the same as the claim-construction issues that were
actually litigated and determined in the Falcon Litigation. The Court will address each
disputed claim term in turn.
A. “Wafer”
In the Falcon Litigation, the district court construed the claim term “wafer” in the
Falcon Claim Construction Order. August Tech., No. 05-cv-1396, Dkt. 268. Camtek
challenged that construction on appeal, and the Federal Circuit modified the construction.
Specifically, the Federal Circuit construed the claim term “wafer” as “a thin, discrete
slice of semiconductor material with circuitry thereon that is ready for electrical testing
having one or more dies. A plurality of wafers means more than one physically distinct
wafer.” August Tech., 655 F.3d at 1286. The Federal Circuit also observed that “the
claims neatly accommodate a wafer in any discrete format, such as a whole wafer, a
discrete portion of a wafer (a sawn wafer or a broken wafer), and even a discrete physical
substrate that includes only an individual die.” Id. at 1285. On remand, Camtek
advanced an interpretation of the Federal Circuit’s modified construction that the district
19
court rejected. August Tech., No. 05-cv-1396, Dkt. 964 at 23-26. However, the parties
now agree that the claim term “wafer” has been construed to mean:
A thin, discrete slice of semiconductor material with circuitry thereon that
is ready for electrical testing having one or more dies. A plurality of wafers
means more than one physically distinct wafer. A physically distinct wafer
is a wafer in any discrete format, such as a whole wafer, a discrete portion
of a wafer (a sawn wafer or a broken wafer), and even a discrete physical
substrate that includes only an individual die.
Although the parties agree that this prior construction is binding in this case,
Camtek asserts that the parties disagree about how to interpret this prior construction.
Camtek argues that two elements of issue preclusion—first, that the issue must be the
same, and second, that the issue must have been actually litigated—are not satisfied
because the parties have not had an opportunity to litigate what effect the Federal
Circuit’s construction of “wafer” has on other parts of the ’6,298 Patent. As such,
Camtek proposes “clarifying” the Federal Circuit’s construction of “wafer” by adding the
following:
In the preamble and throughout the claim, the definition of wafer should be
the same and should have the same form. In other words, if a whole wafer
is used to satisfy the wafer element in one portion of the claim, a physically
discrete die cannot be used to satisfy it in another part of the claim,
especially when the subsequent occurrence refers back to the previous
occurrence for antecedent basis.
It is undisputed that this proposed language is not part of the Federal Circuit’s
construction of “wafer.” Nonetheless, Camtek argues that this additional language is
necessary because the term “wafer” appears numerous times in the asserted patent claims,
yet the Federal Circuit’s construction was applied narrowly on remand to just one
20
instance in which the term “wafer” appears in the asserted patent claims. Camtek’s
arguments are unpersuasive for at least two reasons.
First, contrary to Camtek’s arguments, the ultimate issue here is the same as the
issue in the Falcon Litigation—the construction of the claim term “wafer.” Camtek
suggests that it is presenting a new issue—not the issue of what “wafer” means, but rather
the issue of whether “wafer” must have a consistent meaning throughout the patent claim.
But that distinction is flawed because Camtek is not simply asking for the meaning of
“wafer” to be applied consistently. If Camtek were seeking consistent application of the
meaning of “wafer,” there would be no need for the proposed “clarifying” language.
Instead, the Court simply could apply the Federal Circuit’s undisputed construction to
each instance in which the word “wafer” appears in the asserted patent claims, which is
what Rudolph has requested.
Camtek’s “clarifying” language modifies the Federal Circuit’s construction of the
term “wafer.” The Federal Circuit’s construction recognized that a “wafer” can take
various forms so long as it is “a thin, discrete slice of semiconductor material with
circuitry thereon that is ready for electrical testing having one or more dies.” August
Tech., 655 F.3d at 1286. Camtek would like this Court to conclude additionally that, if a
wafer takes a certain form in one part of the patent claim, it must maintain that same form
in other parts of the patent claim. But the Federal Circuit’s construction does not impose
that limitation.
Moreover, such a limitation is not required as a matter of law. In Intergraph Corp.
v. Intel Corp., 89 F. App’x 218, 228 (Fed. Cir. 2004), the Federal Circuit recognized that
21
a claim construction that defines a term but allows that term to take multiple forms within
the confines of the court’s construction is permissible and “does not run afoul of the
general rule that a claim term should be interpreted consistently throughout a claim.” In
Intergraph, the district court had interpreted the term “instruction” to mean “the smallest
unit of work capable of being processed at any particular stage in the computer.” 89 F.
App’x at 228. The Federal Circuit concluded that the fact that an “instruction” could be
64 bits at one stage of the patented method and 57 bits at a later stage of the patented
method did not make the district court’s construction inconsistent, so long as at all times
the “instruction” was “the smallest unit of work capable of being processed.” Id.
Similarly, in this case, if a “whole wafer” is used in one part of the patent claim, but a
“broken wafer” is used in another part of the patent claim, the definition of “wafer”
remains consistent so long as, in both instances, the wafer is “a thin, discrete slice of
semiconductor material with circuitry thereon that is ready for electrical testing having
one or more dies.” In sum, Camtek does not advance a new issue distinct from the
Federal Circuit’s construction of “wafer,” nor has Camtek identified a legal flaw in that
construction.2 Rather, Camtek seeks an opportunity to litigate an issue that has been
decided: the meaning of “wafer.”3
2 Even if Camtek had identified a legal flaw, a party cannot oppose the application
of issue preclusion by attacking the earlier judgment on the ground that the original
forum committed legal error. In re Scarborough, 171 F.3d 638, 642 (8th Cir. 1999).
3 Camtek cites Yodlee, Inc. v. Plaid Techs., Inc., for the proposition that a district
court may reconstrue claim terms if issues arise that were not presented in the earlier
case. C.A. No. 14-1445, 2016 WL 204372 (D. Del. Jan. 15, 2016). This decision is not
binding on this Court. Moreover, in Yodlee, the district court declined to apply issue
22
Second, Camtek argues that this issue was not actually litigated in the Falcon
Litigation because Camtek did not have a full and fair opportunity to litigate the scope of
the Federal Circuit’s modified construction of “wafer” on remand. It is true that Camtek
did not advance the specific argument in the Falcon Litigation that it now asserts
regarding the scope of “wafer.” But Camtek proposed a definition of “wafer” during
claim construction in the Falcon Litigation, subsequently advanced an alternative
interpretation of the Federal Circuit’s “wafer” construction, and sought additional
construction of other parts of the ’6,298 Patent that contain the term “wafer,” all of which
the district court rejected in the Falcon Litigation. August Tech., No. 05-cv-1396, Dkt.
964 at 24-26. Camtek had the opportunity on remand in the Falcon Litigation to raise
concerns about the Federal Circuit’s construction of “wafer,” and Camtek in fact raised
some of those concerns. Thus, Camtek’s suggestion that it was denied a fair opportunity
to fully litigate the meaning of “wafer” is unpersuasive.
Accordingly, the Court concludes that the construction of the claim term “wafer”
adopted in the Falcon Litigation, as modified by the Federal Circuit and without the
additional language Camtek proposes, is entitled to issue-preclusive effect in this case.
B. “Training”
The parties agree that the construction of the claim term “training” in the Falcon
Litigation should govern in this case because all of the elements of issue preclusion are
preclusion because the claim-construction order in the earlier action was not a final
judgment for the purpose of issue preclusion. Id. at *3. Thus, because the procedural
posture in Yodlee is materially different than the circumstances in this case, Yodlee is
inapposite.
23
satisfied. But the parties dispute the exact language of the district court’s construction of
“training” in the Falcon Litigation. The parties agree, and the record reflects, that the
district court in the Falcon Litigation defined the term “training” to mean “examining
wafers to develop a model of a good quality wafer.” August Tech., No. 05-cv-1396, Dkt.
964 at 28-29, Dkt. 463 at 17. But Camtek argues that, in the Falcon Litigation, the
district court observed that “training” occurs in a step separate from “inspection.” Thus,
Camtek proposes adding the phrase “during a step distinct from inspection” to the end of
the undisputed portion of the definition of “training.”
At the claim-construction stage in the Falcon Litigation, the district court adopted
a construction of “training” that included elements from both Rudolph’s and Camtek’s
proposed constructions. In doing so, the court rejected a portion of Rudolph’s proposed
construction that stated “by which to locate defects,” and observed that “Plaintiff[’s]
reliance on the step in which the model is used to inspect die to locate defects is a step
separate from training, and need not be used to define training. Accordingly, the Court
will adopt the following construction: ‘Examining wafers to develop a model of a good
quality wafer.’ ” August Tech., No. 05-cv-1396, Dkt. 268 at 20.
When read in context, it is clear that the district court’s statement preceding its
construction of “training” is not a part of that term’s definition. Notably, the definition of
“training” provided to the jury in the Falcon Litigation did not include any reference to
separate steps. Id., Dkt. 463 at 17. In addition, in its summary judgment order following
remand from the Federal Circuit, the district court distinguished between its construction
of the claim term “training” and the fact that “[i]n arriving at this construction, the Court
24
noted that ‘the step in which the model is used to inspect die to locate defects is a step
separate from training.’ ” Id., Dkt. 964 at 28-29 (emphasis added). The district court’s
construction is distinct from its contemporaneous observations. If the court had intended
to include a statement pertaining to separate steps in its definition of “training” it could
have done so. Despite multiple opportunities to do so, it did not. Moreover, if Camtek
believed that the definition of “training” was flawed absent a statement regarding
separate steps, it had a full opportunity to advance that argument in the Falcon Litigation.
Thus, Camtek has not demonstrated that appending language to the undisputed
construction of “training” is warranted here.
Accordingly, the Court concludes that the construction of the claim term
“training” adopted in the Falcon Litigation, without the additional language proposed by
Camtek, is entitled to issue-preclusive effect in this case.4
C. “Inspection”
As with “training,” the parties agree that the construction of the claim term
“inspection” in the Falcon Litigation should govern in this case because all of the
elements of issue preclusion are satisfied. However, the parties dispute the exact
language of the district court’s construction of “inspection” in the Falcon Litigation. The
parties agree, and the record reflects, that the district court in the Falcon Litigation
defined the claim term “inspection” to mean “examining wafers to locate one or more
4 The Court is mindful that, in the parties’ joint claim construction status report,
Rudolph also proposed additional language in the definition of “training” that was not
included in the Falcon Claim Construction Order or the definitions provided to the jury in
the Falcon Litigation. However, Rudolph has abandoned that additional language and
now argues only for the undisputed portion of the definition.
25
defects, if any.” August Tech., No. 05-cv-1396, Dkt. 268 at 20-21, Dkt. 463 at 17. But,
similar to its argument regarding “training,” Camtek asserts that the district court in the
Falcon Litigation observed that “inspection” occurs in a step separate from “training.”
Thus, Camtek proposes adding the phrase “during a step distinct from training” to the end
of the undisputed portion of the definition of “inspection.”
For the same reasons described above in Part III.B. with respect to “training,”
Camtek has not demonstrated that appending language to the undisputed construction of
“inspection” is warranted. Accordingly, the Court concludes that the construction of the
claim term “inspection” adopted in the Falcon Litigation, without the additional language
proposed by Camtek, is entitled to issue-preclusive effect in this case.
D. “Model of [a] good quality wafer”
The parties agree that in the Falcon Litigation the district court construed the
phrase “model of [a] good quality wafer” to mean a model “with all of the necessary
characteristics to inspect an unknown quality wafer.” Although this definition did not
appear in the Falcon Claim Construction Order, the district court provided this definition
in its post-trial order denying Camtek’s motion for judgment as a matter of law and
referenced this definition again in its summary judgment order following remand from
the Federal Circuit. See August Tech., No. 05-cv-1396, Dkt. 644 at 8, Dkt. 964 at 32.
In the parties’ joint claim construction status report in this case, Rudolph proposed
additional language—namely, that the “model can be generated with or without human
involvement.” But Rudolph has abandoned that additional language and now appears to
argue only for the undisputed portion of the definition. Camtek, on the other hand,
26
continues to advance its proposed additional language—namely, that a “model of [a]
good quality wafer” is “[a]n automated computer-generated model.”
Although the parties did not dispute the phrase “model of [a] good quality wafer”
at the initial claim-construction stage in the Falcon Litigation, the district court construed
this phrase in its post-trial order, and Camtek did not challenge that construction on
appeal. See August Tech., No. 05-cv-1396, Dkt. 644 at 8, Dkt. 964 at 32. Following
remand from the Federal Circuit, Camtek asked the district court to reconstrue this
phrase. But the district court declined, observing that, because Camtek had not
challenged the district court’s prior construction on appeal, the district court’s prior
construction became the law of the case. August Tech., No. 05-cv-1396, Dkt. 964 at 23-
26. Therefore, the record reflects that the construction of the phrase “model of [a] good
quality wafer” was at issue and actually litigated in the Falcon Litigation.
Accordingly, the construction of the phrase “model of [a] good quality wafer”
adopted in the Falcon Litigation, without the additional language proposed by Camtek, is
entitled to issue-preclusive effect in this case.
E. “Freezes”
Camtek argues in its response memorandum that the term “freezes” should be
construed by this Court. But Camtek did not cross-move for any relief, and the term
“freezes” is not raised in Rudolph’s motion for partial summary judgment. Because this
issue is not properly before the Court, the Court declines to address it. See, e.g., Peterson
v. City of Cosmos, Minn., No. Civ.03-6570, 2005 WL 1267620, at *8 (D. Minn. May 27,
27
2005) (declining to consider issue raised by nonmoving party in response to motion for
summary judgment).
F. Remaining Disputed Phrases
The remaining ’6,298 Patent phrases that the parties dispute for the purpose of this
motion are “visual inputting,” “training a model as to parameters of a good wafer via
optical viewing of multiple known good wafers,” and “inspecting unknown quality
wafers using the model.” None of these phrases was disputed at the claim-construction
stage of the Falcon Litigation; therefore, the district court did not define these phrases in
the Falcon Claim Construction Order. See August Tech., No. 05-cv-1396, Dkt. 268.
And, unlike the terms “wafer” and “model of [a] good quality wafer,” neither the Federal
Circuit nor the district court appears to have addressed the construction of these three
phrases at any other point in the Falcon Litigation.
Rudolph argues, however, that the district court in the Falcon Litigation construed
these phrases by giving them their ordinary meaning. When the district court charged the
jury in the Falcon Litigation, after listing out the patent claim terms that the district court
had construed, the court gave the following catch-all instruction to the jury: “You should
give the rest of the words in the claims their ordinary meaning in the context of the patent
specification and prosecution history.” August Tech., No. 05-cv-1396, Dkt. 463 at 17.
Rudolph contends, in essence, that a patent claim term has been construed for the purpose
of issue preclusion when that claim term is given its ordinary meaning. This Court
disagrees for several reasons.
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First, when discussing a district court’s decision to apply the ordinary meaning to
a patent claim term, the Federal Circuit consistently refers to that decision as a “decision
not to construe the terms.” Eon Corp., 815 F.3d at 1318 (emphasis added); accord O2
Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1358-62 (Fed. Cir. 2008)
(recognizing that a “district court is not obligated to construe terms with ordinary
meanings” and concluding that the “district court’s failure to construe” a disputed claim
term was legal error). Indeed, the respective district courts in both Eon and O2 Micro
expressly declined to construe the disputed terms. See Eon, 815 F.3d at 1317 (observing
that the district court concluded that the disputed terms “do not require construction”);
O2 Micro, 521 F.3d at 1357 (observing that the district court concluded that the disputed
term “needs no construction”). Thus, contrary to Rudolph’s argument, a court’s decision
to apply the ordinary meaning of a patent claim term is not the same as construing that
term. It is the opposite of construing the term.
Second, the meanings of the three now-disputed phrases in this case have not
previously been litigated. In Eon and O2 Micro, the parties took opposing positions
regarding the construction of the disputed claim terms, and the respective district courts
considered and rejected proposed constructions. See Eon, 815 F.3d at 1317; O2 Micro,
521 F.3d at 1357. By contrast, the parties in the Falcon Litigation never disputed the
meaning of the three now-disputed phrases, and the district court never specifically
remarked on their meaning. Rather, the district court’s sole, vague reference to the
meaning of these phrases is a catch-all instruction that the jury should apply the ordinary
meaning to any term for which the court had not supplied a definition. The record in the
29
Falcon Litigation, including this catch-all jury instruction, belies Rudolph’s contention
that these phrases were construed in the Falcon Litigation.
Third, Rudolph’s position is not logically sound. Indeed, if Rudolph’s position
were taken to its logical conclusion, then any time there are successive lawsuits involving
the same patent claims and the same parties, the construction of any claim term in the
second case would be improper because ordinary meaning would have attached to all
patent terms not expressly defined by the court in the first action. Rudolph proffers no
legal authority to support such a far-reaching rule. Moreover, the result of such a rule
would create the perverse incentive for parties to vigorously contest every patent claim
term in order to avoid unintentionally becoming bound to “ordinary meaning” by default
in a later case, which would, in turn, require courts to construe every term in every
asserted patent claim.
Rudolph argues that, because the disputed claim terms appeared on the special
verdict form, the Falcon Litigation necessarily adjudicated the construction of those
terms. But in the relevant portions of the special verdict form, the jury in the Falcon
Litigation addressed only whether Camtek had infringed the asserted patent claims.
August Tech., No. 05-cv-1396, Dkt. 466 at 1-4. In doing so, the jury did not adopt a
construction of any term or phrase in the ’6,298 Patent. Indeed, claim construction is not
the province of the jury; claim construction is a legal question that is exclusively for the
court to resolve. Eon, 815 F.3d at 1318. And it is undisputed that the construction of the
phrases “visual inputting,” “training a model as to parameters of a good wafer via optical
viewing of multiple known good wafers,” and “inspecting unknown quality wafers using
30
the model” were never submitted to the district court for adjudication in the Falcon
Litigation.
Accordingly, because the construction of the phrases “visual inputting,” “training
a model as to parameters of a good wafer via optical viewing of multiple known good
wafers,” and “inspecting unknown quality wafers using the model” were neither at issue
nor actually litigated in the Falcon Litigation, the Court concludes that the issue
preclusion doctrine does not foreclose the construction of these phrases in this case.
ORDER
Based on the foregoing analysis and all the files, records and proceedings herein,
IT IS HEREBY ORDERED:
1. Rudolph’s motion for partial summary judgment, (Dkt. 151), is
GRANTED with respect to the issue of the invalidity of the ’6,298 Patent and, therefore,
Camtek is precluded from contesting the validity of the ’6,298 Patent in this case.
2. Rudolph’s motion for partial summary judgment, (Dkt. 151), is
GRANTED with respect to the issue of claim construction and, therefore, the
construction adopted in the Falcon Litigation of the following four terms in claims 1 and
3 of the ’6,298 Patent are entitled to preclusive effect in this case as follows:
a. “wafer” means “a thin, discrete slice of semiconductor material with
circuitry thereon that is ready for electrical testing having one or
more dies. A plurality of wafers means more than one physically
distinct wafer. A physically distinct wafer is a wafer in any discrete
format, such as a whole wafer, a discrete portion of a wafer (a sawn
31
wafer or a broken wafer), and even a discrete physical substrate that
includes only an individual die”;
b. “training” means “examining wafers to develop a model of a good
quality wafer”;
c. “inspection” means “examining wafers to locate one or more defects,
if any”; and
d. “model of [a] good quality wafer” means “a model with all of the
necessary characteristics to inspect an unknown quality wafer.”
3. Rudolph’s motion for partial summary judgment, (Dkt. 151), is DENIED
with respect to the issue of claim construction to the extent that it seeks to preclude
construction in this case of the phrases “visual inputting,” “training a model as to
parameters of a good wafer via optical viewing of multiple known good wafers,” and
“inspecting unknown quality wafers using the model” in claims 1 and 3 of the ’6,298
Patent.
Dated: August 8, 2016 s/Wilhelmina M. Wright
Wilhelmina M. Wright
United States District Judge