Intel Corp. v. U.S. International Trade Commission

Intel Corporation (Intel) (plaintiff) held the rights to patents that covered erasable programmable read-only memories (EPROMs). Intel had a broad cross-licensing agreement with Sanyo under which Intel granted Sanyo the right to make, use, and sell “any Sanyo . . . products” that might otherwise infringe on Intel’s patents (paragraph 3.5). Any products covered by paragraph 3.5 could be developed and sold worldwide without payment of royalties to Intel. Separate paragraphs of the Intel-Sanyo agreement (paragraphs 4.3 and 4.4) required Sanyo to pay royalties to Intel on the sales of specific Intel chips made by Sanyo and on derivative products based on those chips. Yet another provision of the agreement (paragraph 3.8) stated that the parties were not relying on any implied license. In 1987, Intel filed a complaint against Atmel Corporation (Atmel) (defendant) and other entities (defendants) before the International Trade Commission (ITC). Intel alleged, inter alia, that Atmel was infringing on Intel’s patents and sought an order barring the importation of the allegedly infringing products. In response, Atmel asserted various defenses, including that Atmel’s EPROMs had been manufactured by Sanyo under Sanyo’s cross-licensing agreement with Intel. The ITC ruled in Intel’s favor, reasoning that the Intel-Sanyo agreement did not allow Sanyo to make products for other companies using the other company’s design, i.e., act as a foundry. Atmel appealed, arguing that paragraph 3.5 intended only to limit Sanyo from hiring another company to manufacture licensed products for Sanyo.