IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff, Defendants. COMPLAINT FOR PATENT INFRINGEMENT

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1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE TELA INNOVATIONS, INC., v. Plaintiff, TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LIMITED and TSMC NORTH AMERICA, Defendants. C.A. No. JURY TRIAL DEMANDED COMPLAINT FOR PATENT INFRINGEMENT 1. Plaintiff Tela Innovations, Inc. ( Tela or Plaintiff, by and through its attorneys, hereby demands a jury trial and complains of Defendants Taiwan Semiconductor Manufacturing Company, Limited ( TSMC Ltd. and TSMC North America ( TSMCNA (collectively TSMC or Defendants as follows: NATURE OF ACTION 2. This is an action for patent infringement arising under the patent laws of the United States, 35 U.S.C. 271, et seq., to enjoin infringement and obtain damages resulting from TSMC s unauthorized manufacture, use, sale, offer to sell, and/or importation into the United States for subsequent use or sale of products, methods, processes, services, and/or systems that infringe one or more claims of Tela s United States Patent No. 8,490,043 (the 043 Patent or the Asserted Patent, entitled Standard Cells Having Transistors Annotated for Gate-Length Biasing (attached as Exhibit A. 3. This action for patent infringement involves TSMC s manufacture, use, sale, offer for sale, and/or importation into the United States of infringing products, methods, processes,

2 services, and/or systems that are primarily used or primarily adapted for use in standard cells for semiconductor design and/or semiconductors. 4. Tela seeks injunctive relief to prevent TSMC from continuing to infringe Tela s patent. In addition, Tela seeks a recovery of monetary damages resulting from TSMC s infringement of this patent. THE PARTIES 5. Plaintiff Tela is a privately held corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 485 Alberto Way, Suite 115, Los Gatos, California Tela has developed and patented design solutions for advanced integrated circuit ( IC manufacturing processes where lithography driven constraints require novel approaches to both digital circuit design and the physical implementation of these designs. More specifically, Tela developed patented design solutions that enable continued cost-effective scaling of semiconductor manufacturing processes. 7. Tela s products, including cell libraries, layouts and software, enable IC designers to achieve improved performance, area, and power characteristics as semiconductor processes continue to scale. Tela has been the recipient of U.S. government contracts under which it has made significant contributions toward developing its technology for use by the U.S. government, in addition to private semiconductor manufacturing companies. Tela has also entered into numerous evaluation and testing agreements with customers and potential customers under which its products employing its patented technology have been evaluated. 8. Plaintiff Tela is the lawful assignee of all right, title, and interest in and to the 043 Patent. -2-

3 9. Defendant TSMC Ltd. is a foreign corporation organized and existing under the laws of Taiwan, with its principal place of business at No. 8, Li-Hsin Rd.VI, Hsinchu Science Park, Hsinchu, Taiwan , R.O.C. TSMC Ltd. is in the business of manufacturing, designing, prototyping, and selling semiconductors. TSMC Ltd. is the world s largest dedicated independent semiconductor foundry. TSMC Ltd. owns and operates at least seven different semiconductor fabrication facilities in Taiwan. 10. Defendant TSMCNA is a corporation organized and existing under the laws of the state of California, with its principal place of business at 2585 Junction Avenue, San Jose, CA TSMCNA is a wholly-owned subsidiary of TSMC Ltd. TSMCNA is in the business of selling and marketing integrated circuits and semiconductor devices as well as providing customer service, and serves as TSMC Ltd. s exclusive sales agent in North America and South America. 11. Tela has been irreparably harmed by TSMC s willful infringement of its valuable patent rights. Moreover, TSMC s unauthorized and willfully infringing uses of Tela s patented technology have threatened the value of this intellectual property because TSMC s conduct results in Tela s loss of its lawful patent rights to exclude others from making, using, selling, offering to sell, and/or importing the patented technology. JURISDICTION AND VENUE 12. This Court has jurisdiction over the subject matter of this patent infringement action pursuant to 28 U.S.C and 1338(a. 13. TSMC Ltd. and TSMCNA are subject to personal jurisdiction in the State of Delaware because they each regularly transact business in this judicial district and division by, among other things, offering their products and services to customers, business affiliates, and partners located in this judicial district. In addition, TSMC Ltd. and TSMCNA have each -3-

4 committed acts of infringement of one or more of the claims of the 043 Patent in this judicial district. 14. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391(b, 1391(c, and 1400(b because the Defendants TSMC Ltd. and TSMCNA are each subject to personal jurisdiction in this district and have each committed acts of infringement in this district. COUNT I (INFRINGEMENT OF UNITED STATES PATENT NO. 8,490, Paragraphs 1 through 14 are incorporated by reference as if fully restated herein. 16. The 043 Patent has sixteen (16 claims, including four (4 independent claims (claims 1, 6, 10, and 15 and twelve (12 dependent claims (claims 2-5, 7-9, 11-14, and TSMC previously initiated a number of inter partes reexaminations against other Tela patents: reexamination case numbers 95/001,832, 95/002,207, and 95/002,214. Tela submitted the references used in these reexaminations to the PTO during the prosecution of the 043 Patent, and the 043 Patent has been allowed over TSMC s best art. 18. TSMC makes, uses, sells, offers to sell, and/or imports into the United States for subsequent sale or use, products, services, methods, or processes that infringe, directly and/or indirectly, or which employ systems, components, and/or steps that make use of systems or processes that infringe, directly and/or indirectly, one or more of the claims of the 043 Patent, including, without limitation, claims 1-16 of the 043 Patent. Such devices include standard cells, standard cell libraries, test wafers or test chips, engineering wafers or engineering chips, commercial wafers, semiconductors, integrated circuits, and other integrated circuit components and/or devices. 19. In addition to its own direct infringement, TSMC has knowledge of the 043 Patent as a former licensee, and contributes to and/or induces infringement by others by -4-

5 providing design rules and/or standard cell libraries whose only feasible use is in designing infringing devices and/or directly infringing the 043 Patent. In following these TSMC design rules and/or using these standard cell libraries to design integrated circuit layouts for manufacture at TSMC, TSMC s customers directly infringe the claims of the 043 Patent. 20. Upon information and belief, TSMC has been willfully infringing, directly and indirectly, and continues to willfully infringe, directly and indirectly, one or more of the claims of the 043 Patent, including the above-cited claims 1-16 of the 043 Patent, and will continue to do so unless enjoined by this Court. TSMC s wrongful conduct has caused Tela to suffer irreparable harm resulting from the loss of its lawful patent rights to exclude others from making, using, selling, offering to sell, and/or importing the patented technology. 21. Tela is entitled to recover damages adequate to compensate for the infringement. COUNT II (WILLFUL INFRINGEMENT OF UNITED STATES PATENT NO. 8,490,043 infringement. 22. Paragraphs 1 through 22 are incorporated by reference as if fully restated herein. 23. TSMC s infringement of Tela s 043 patent has been, and continues to be, willful 24. TSMC is a former licensee to certain Tela intellectual property, including the U.S. Patent Application that matured into the 043 Patent, and thus currently has and formerly had knowledge of the 043 Patent. 25. Subsequent to the expiration of TSMC s license, and subsequent to the July 16, 2013 issuance of the 043 Patent, despite its awareness of the 043 Patent, TSMC has continued to offer infringing products in willful violation of Tela s intellectual property rights in the inventions claimed in the 043 Patent. TSMC has also willfully continued to contribute to infringement of the 043 patent by others and induce infringement of the 043 patent by others. -5-

6 WHEREFORE, Plaintiff prays for judgment against the Defendants, granting Plaintiff the following relief: 26. That this Court adjudge and decree that the 043 Patent is valid and enforceable against TSMC; 27. That this Court adjudge and decree that TSMC has infringed the 043 Patent and contributed to and/or induced infringement of the 043 patent by others; 28. That this Court adjudge and decree that TSMC s infringement of the 043 Patent has been and continues to be willful; 29. That this Court permanently enjoin TSMC and its parents, subsidiaries, affiliates, successors, and assigns, and each of their officers, directors, employees, representatives, agents, attorneys, and all persons acting in concert or active participation with, or on their behalf, or within their control, from making, using, selling, offering to sell, importing, or advertising products and/or services and/or employing systems, hardware, software, and/or components, and/or making use of systems or processes that infringe, directly or indirectly, any of the claims of the 043 Patent, or from otherwise engaging in acts of infringement of the 043 Patent, all as alleged herein; 30. That this Court order an accounting, including a post-verdict accounting, to determine the damages to be awarded to Tela as a result of TSMC s infringement; 31. That this Court, pursuant to 35 U.S.C. 284, enter an award to Tela of such damages as it shall prove at trial against TSMC that is adequate to compensate Tela for said infringement of the 043 Patent, said damages to be no less than a reasonable royalty together with interest and costs; -6-

7 32. That this Court, pursuant to 35 U.S.C. 284, treble the damages award entered due to TSMC s willful infringement of the 043 Patent; 33. That this Court assess pre-judgment and post-judgment interest and costs against TSMC, together with an award of such interest and costs, in accordance with 35 U.S.C. 284; 34. That this Court declare this case to be exceptional and direct TSMC to pay Tela s attorneys fees incurred in connection with this lawsuit pursuant to 35 U.S.C. 285; and 35. That this Court grant to Tela such other, further, and different relief as may be just and proper. JURY DEMAND 36. Plaintiff demands a trial by jury of all matters to which it is entitled to trial by jury pursuant to FED. R. CIV. P. 38. Dated: December 23, 2013 Respectfully submitted, /s/ Edmond D. Johnson Edmond D. Johnson (Del. Bar No James G. McMillan, III (Del. Bar No Pepper Hamilton LLP Hercules Plaza, Suite N. Market Street P.O. Box 1709 Wilmington, DE Telephone: ( johnsone@pepperlaw.com mcmillaj@pepperlaw.com COUNSEL FOR PLAINTIFF TELA INNOVATIONS, INC. -7-