2024 Week 41
This week we report on Seoul Viosys v Expert Klein, a full decision on infringement and validity by the UPC Local Division Düsseldorf.
In the few full decisions on the merits that we have seen so far from the UPC, the contentious issues have tended to centre on either infringement or validity, but not both together. But for this case, both of these substantive issues were difficult and perhaps could have gone either way.
In this case, the patentee won, and the reasoning set out by the court seems to us to be pro-patent.
This report has two parts – the first is intended as a general overview of the case and the headlines, suitable for everyone. The second part is much longer and is a deeper dive into the technical issues, intended for the very keen.
PART ONE – the headlines
Background
The patentee Seoul Viosys sued two related companies (Expert) for patent infringement on the basis that Expert market a smartphone which incorporates a specific LED into the camera module. The patent defines details of the structure of the LED.
The UPC Local Division did a full analysis of claim interpretation, infringement and validity and came to the conclusion that the patent is valid and infringed.
The power of the UPC injunction
Expert complained that the LED is a very minor component of their smartphone, representing 70-80 cents of the cost of the overall smartphone. They argued that imposing an injunction against the smartphone would be unreasonable. Expert therefore asked that, if an injunction was awarded, the patentee should provide security for damages in case the injunction is overturned on appeal. The Local Division refused to make an order for security for damages. This was on the basis that there was not sufficient evidence provided by Expert to show either that the damage they would suffer would be disproportionate, or that the patentee could not pay such damages if ultimately required.
The outcome of the case is that Expert have an injunction against them, requiring them to stop marketing the smartphone and also to recall the smartphones from their distribution channels and destroy them.
Claim interpretation and infringement
The court once again demonstrated that the content of the description is absolutely key in interpreting the claims. It was a clear explanation in the description that a “layer” defined in the claims could in fact be presented as a composite layer of sub-layers of different metals that led to the finding of infringement.
Validity – inventive step
The UPC is clearly not following the EPO approach to inventive step. Despite many uses of the terms “problem”, “solution” and “motivation”, the structure of the approach of the UPC is different to the EPO. Here, in our view, the outcome is probably materially different to what the EPO would have decided on the same prior art.
Validity – added matter
Even more starkly, the approach of the UPC Local Division to added matter is significantly more generous to the patentee than the EPO approach. In our view, it is difficult to say that the combination of features in granted claim 1 meets the EPO’s test of being directly and unambiguously derivable by the skilled person, using common general knowledge, from the original grandparent application.
PART TWO – the technical details
I have properly dug into this case because as it happens it is right in my technical wheelhouse. The patent is EP 3926698 B1, from a divisional application. The technology is flip-chip LEDs – of the type with a transparent substrate and the semiconductor layers and electrode contacts are on one side and light is emitted from the semiconductor active layer, through the substrate. To make these devices efficient, you really want to have highly reflective electrode contacts so that light generated in the LED but initially going the wrong way will be reflected back the other way and out of the substrate.
Claim interpretation and infringement
Granted claim 1 of the patent is long. It sets out a conventional flip-chip LED structure, with a substrate (100), a first semiconductor layer (e.g. an n-type layer 110), an active layer (120, e.g. with quantum wells) and a second semiconductor layer (e.g. a p-type layer 130). But there are two key parts that we will consider here.
First is that the claim defines that there are “mesa-etched areas” (150) through the second semiconductor layer (130) to reach the first semiconductor layer (110). The purpose of this is to get an electrical contact (not shown in the drawing below) to reach the first semiconductor layer (110).
The second key part is that the claim defines the reflective electrode (140) in detail. It requires that there is a reflective metal layer (142), a barrier metal layer (144), and a stress-relieving layer (143) formed between them. The stress-relieving layer (143) has a coefficient of thermal expansion (CTE) that lies between the CTE of the reflective metal layer (142) and the CTE of the barrier metal layer (144). The description explains that this helps to avoid thermally-induced delamination of the reflective metal layer (142) from the second semiconductor layer (130). One of the drawings from the patent is shown below:
The compositions of the various metal layers in the reflective electrode are not specified in claim 1, but the dependent claims give various compositional options.
The alleged infringement is shown below. This also had Ag as the reflective layer, and on top of that was a sequence of alternating Ti and Ni layers (with overlying layers of SiO2 and Al that are not discussed further here):
In the view of the Local Division, it was permissible to identify the top Ti layer as the barrier metal layer and the underlying Ti-Ni-Ti-Ni layer sequence as the stress relieving layer. The patent specifically described that the stress relieving layer could be a composite layer. The patent also permitted the barrier metal layer to be Ti. It is accepted that Ti has a lower CTE than Ag. Also, in view of the Local Division, the composite Ti-Ni-Ti-Ni layer would have an overall CTE that would be between that of Ti and Ag.
A contrarian, literal, view would be to say that the top sequence of Ni-Ti-Ni-Ti could be taken as the barrier metal layer and the layer interposed between this barrier metal layer is Ti, which then does not meet the CTE requirements of claim 1.
To understand why the Local Division reached their interpretation, it is important to note that the dependent claims and the description explicitly said that the stress relieving layer could be a composite layer. There was no corresponding description for the barrier metal layer.
For these reasons, the Local Division decided that there was infringement, the other features of the claim being more clearly met.
Validity – inventive step
The defendant had filed various prior art documents, the most useful being D3 (US 2005/0067624 A1) and D5 (EP 1806790 A2, cited in EPO prosecution).
D3 disclosed a flip-chip LED of similar overall construction to the patent. It included a reflective electrode with a silver reflective layer and an optional guard metal layer, the purpose of this being similar to the barrier metal layer in the patent – to stop Ag diffusing into other parts of the device. D3 did not propose a composition for the guard metal layer and did not consider issues related to the thermal expansion coefficient for these layers.
The Local Division set out its approach to inventive step, including a few mentions of “problem”, “solution” and a need to show why the skilled person would be motivated to arrive at the claimed solution in view of the underlying problem. On the face of it, this sounds like the EPO’s approach to inventive step. But on closer inspection of the decision, the approach to inventive step does not seem similar to the EPO’s.
The Local Division took the view that the skilled person, starting from D3, would merely be trying to find a suitable composition to use for the guard metal layer. This is interesting, because it does not take account of the technical effect of the novel features of claim 1 compared with D3. Claim 1 also does not recite a composition for the barrier metal layer, but requires the presence of a stress-relieving layer, defined by its CTE compared to the CTEs of the reflecting layer and the barrier metal layer.
In effect, the Local Division considered the problem to be solved by the skilled person is to implement D3 by finding a suitable material for the guard metal layer. The skilled person would therefore come across D5. D5 also disclosed a flip-chip LED with a silver reflective layer in the reflective electrode and a protective layer formed over the silver layer. The overall disclosure of D5 acknowledges the prior art use of metals such as Ni, Ti and W for the protective layer. The proposal made in D5, however, is that these metals are not very good at preventing Ag diffusion and instead says that Pt or Pd should be used.
The Local Division paid attention to a specific explanation in D5 that the CTEs of Ag and Pd are close, with the effect that distortion due to thermal stress “hardly occurs”.
Therefore, their view was that the “next step” development of D3 that would be carried out by the skilled person in an obvious manner would fall outside the scope of claim 1 of the patent. Based on the teaching of D5, just using Pd as the material for the guard layer in D3 would mean that there is no problem of thermal stress in the Ag reflecting layer caused by the guard metal layer and therefore no need to include a stress-relieving layer between them.
As an argument on these facts, this is compelling. But it raises some awkward questions on closer inspection. There is in fact a relatively large difference in CTE between Ag and Pd. Therefore, there will be at least some thermal stress between the Ag layer and the Pd layer in D5, even if this is reported in D5 as not problematic. And, based on the compositional options given for the layers in the dependent claims of the patent, claim 1 covers an embodiment with Ag reflecting layer and Pd barrier metal layer, provided that there is a layer between them of intermediate CTE.
It is true that D5 proposes one embodiment in which the Ag layer and the Pd layer are in direct contact. However, it appears from the decision that the defendant did not bring to the court’s attention that D5 proposes a modified embodiment in which an electrically conducting intermediate layer is formed between the Ag and Pd layers. This intermediate layer is disclosed as being formed of a metal that does not form an alloy with the first and second layers. Its purpose is not explained in detail, but appears to be intended to ensure that there is no intermixing of the materials of the opposing layers. The suggested composition for the intermediate layer is Ni, Ti or Pt. Of these, if Ti or Pt is used, the arrangement would fall outside the scope of claim 1 in view of the CTE requirement. However, if Ni is used, then this should fall inside the scope of claim 1 at least based on CTE requirement, as shown in this schematic:
At the root of this discussion is whether inventive step at the UPC is always to be based on considering the technical effect asserted to be associated with the novel features of the claim over the closest prior art. That is what the EPO does. In this case, the Local Division did consider the technical effect of the stress-relieving layer, but this seems then to be lost when considering how the skilled person would combine the teachings of D3 and D5, because the Local Division stopped the analysis when they see that they have reached one obvious implementation of D3 in the light of D5. However, since this obvious implementation does not fall inside the scope of the claim, they decided that the claim is inventive.
In effect, the Local Division reduced the problem to be solved over D3 as merely the selection of a suitable material for the guard metal layer. Then, it seems reasonable to argue that D5 proposes several solutions, one of which has an intermediate Ni layer formed between the Ag reflecting layer and the Pd protective sheet. This solution appears to fall inside the scope of claim 1. Admittedly there is no consideration here of the motivation to use this arrangement rather than only a Pd layer, and so a discussion of the use of hindsight would be reasonable, but it seems that this disclosure of D5 should at least have been considered.
In EPO prosecution, D3 was not considered. The EPO approached inventive step from a different closest prior art document in combination with D5, but set up the problem to be solved as avoiding thermal degradation of the reflective electrode. The EPO considered that D3 provided a stress relieving layer and a barrier layer over the reflective layer. Inventive step leading to the grant of the patent by the EPO was instead based on the location of the mesa-etches areas near the edge of the substrate. But the UPC Local Division decided that this feature was present in D3, and so disagreed with the EPO examiner about the inventiveness of the stress-relieving layer in claim 1, based on the same secondary prior art reference.
Validity – added matter
The defendants attacked the patent also on the grounds of added matter – that the patent discloses subject matter going beyond the disclosure of the original grandparent application.
To my mind, their best attack was based on the “mesa” features of the claim. Granted claim 1 does not define that there are plural mesas. Instead, it defines that there are mesa-etched areas. This is important because one mesa will have mesa-etched areas around it, and so granted claim 1 covers a one-mesa embodiment (which is what the infringing LED had).
However, independent claims 1 and 18 of the original grandparent application defined a plurality of mesas separated from each other on the first semiconductor layer.
Although there is disclosure in the original grandparent application of one-mesa devices, these embody a different invention (roughening of the light-emitting surface of the substrate) and these devices do not have significant features that are required by granted claim 1 and also by the independent claims of the original grandparent application.
The approach taken by the Local Division looks to be generous to the patentee. The court seems to be saying that it is clear that the important technical feature relevant to the invention is not the mesas themselves, but the mesa-etched regions, which allow electrical connection to the first semiconductor layer.
Again, we wonder how the EPO would consider this. The EPO would be interested to ask whether the combination of features in granted claim 1 is directly and unambiguously derivable from the original grandparent application. The original application seems to make it very clear (see claim 1) that plural mesas are required. Replacing the requirement for plural mesas with the requirement for plural mesa-etched areas (and so covering one or more mesa) would be likely to face objection, certainly in an EPO opposition.
However, in the EPO file, the claims of the divisional application were filed without any explanation as to their basis in the original grandparent application, and the EPO examiner did not raise any objection on the grounds of added subject matter.
Lessons learned
It is very clear indeed that the patentee came out on top in this decision. It seems to me to be the most patent-friendly decision on the merits so far at the UPC.
The first lesson is that UPC injunctions are powerful things – here, a minor component of a smartphone is the reason why the smartphone must be taken off the market.
The second clear takeaway is that the content of the description is critical in the court’s interpretation of the claims.
Third, the UPC is assessing validity in a different way to the EPO’s approach, particularly on inventive step and added matter. So, even if you have a struggle to persuade an EPO examiner to allow your patent, once granted, those struggles do not necessarily mean that the patent is weak. The UPC will make up its own mind.
