In our April 1989 issue we reported on the first lawsuit to be filed under the 1985 Semiconductor Chip Protection Act (the “Chip Act”). Brooktree Corporation, a manufacturer of powerful color palette chips used in high performance graphics workstations, had filed suit against Advanced Micro Devices (“AMD”), claiming that in the process of designing chips that would be plug-compatible with the Brooktree chips, AMD had illegally copied the mask works used in Brooktree’s chips. We noted that the trial court had denied Brooktree’s motion for a preliminary injunction against AMD selling the allegedly infringing chips, and the court had set forth an extremely conservative, pro-defendant test for infringement under the Chip Act.
This case has now dragged on for four years, with interesting results. Although AMD won the first round, a jury held in 1990 that AMD had in fact violated Brooktree’s rights under the Chip Act, and awarded Brooktree $26 million. Now a federal appeals court has upheld that verdict, holding that the jury could reasonably have concluded that AMD had illegally copied parts of Brooktree’s chip design. The Chip Act, which was invoked for the first time in this case and has often been viewed as a weak intellectual property law, may for the first time have had life breathed into it by this decision.