TOKYO, JAPAN - On February 1, 2002, the Court of Appeals for the Federal Circuit affirmed in all respects the trial court's August 7, 2000 judgment that Tokyo Electron Limited's (TEL's) Advanced IEM (A-IEM) Etchers do not infringe Tegal's U.S. Patent No. 4,464,223. As a result, TEL's A-IEM Oxide Etcher Model's 65 DI and 85DI are completely free of any claim of infringement by Tegal. TEL and its affiliates and customers can continue to market, sell and use the A-IEM Etchers without fear of any further interference by Tegal. The Court of Appeals held that:

The A-IEM etcher cannot be found to infringe under the doctrine of equivalents because 2 MHz is twice what we have interpreted low frequency to mean, and a finding of equivalence would therefore vitiate that limitationThe district court decided that at least one version of the A-IEM etcher did not infringe the claims, and following Tegal's argument, the determination of no infringement should apply to all versions of the A-IEM device.

The Court of Appeals also vacated the trial court's earlier finding of contempt and willful infringement by TEL based on a previous finding of the trial court that TEL's US subsidiary, Tokyo Electron America's (TEA's) infringed the '223 patent by marketing TEL's earlier IEM model 65DI (6 inch IEM Oxide) and 85DI (8 inch IEM oxide) etch systems. Specifically, the Court of Appeals concluded that:

In light of our disposition in the TEA case, we vacate the district court's finding of willfulness on the part of TEL with regard to the IEM devices. Thus, TEL is not estopped from arguing that the '223 patent is anticipated by the Itakura reference, nor is TEL estopped from contesting that its infringement was willful with regard to the IEM etchers. While the Appeals Court has resolved Tegal's claim of infringement by TEL's A-IEM etch technology in favor of TEL, TEA is still entitled to ask the trial court in Virginia to find Tegal's '223 patent invalid in its entirety. During that trial, TEA can also contest any finding of willful infringement and the earlier award of attorneys' fees which also has been set aside by the Appeals Court.

According to a company representative in charge of intellectual property, "TEL has been and continues to be one of the leaders in the semiconductor production equipment industry worldwide and TEL will continue to protect its proprietary rights and support its customers throughout the world as well as respect intellectual property rights of others." TEL's lead trial and patent counsel, Ed Haug of Frommer Lawrence & Haug LLP in New York City says, "Our clients are very gratified that after extensive legal proceedings, the U.S. court system has appropriately found that TEL's latest etch technology does not infringe Tegal's '223 patent. TEL and TEA remain totally committed to its policy of protecting its own innovative technology, while respecting the lawful and valid patent rights of others."