Infineon Corrects Misstatements Made by Macom Technology Solutions

22 Dec

The lawsuit between Infineon Technologies AG, its subsidiary Infineon Technologies Americas Corp., and Macom Technology Solutions Holdings, Inc., is still in its early stages. The court has made no decision on the merits. Macom has neither won the case nor is settlement imminent.

Macom’s dispute with Infineon originates from irreconcilable business philosophies. While Infineon generally welcomes competition and has entered into license agreements with many of its competitors allowing broad freedom to operate, Macom prefers exclusion. However, whether Macom or Infineon ultimately prevails in this lawsuit, the outcome should determine whether Macom continues to be licensed to certain Infineon Americas patents. Infineon Americas owns the patents at issue and has the rights it needs for its own operations.

Origins of the lawsuit

Macom had been willfully infringing patents owned by Infineon Americas by operating outside the scope of a license agreement. Macom admitted to the infringement but rejected Infineon America’s offer to broaden the license agreement to cover the infringement. Infineon Americas therefore terminated Macom’s license in March 2016. Macom then filed a complaint in the United States District Court for the Central District of California in Los Angeles. While no decision has been made on the merits, the court dismissed claims in Macom’s second attempt at a complaint in October 2016 (Macom had voluntarily amended its first one). Macom has recently filed a third version. Infineon believes that the third complaint is still flawed and will move to dismiss this week. Once the lawsuit eventually proceeds, Infineon expects a decision within 1-2 years.

Injunction aims at preserving status quo until judgement is made

To preserve the status quo until the court reaches a decision, the court issued a preliminary injunction in the meantime. The preliminary injunction serves to shield Macom from irreparable harm should Macom ultimately succeed on its theory, while Infineon can seek to recover damages from Macom later if Infineon prevails. The preliminary injunction is not a threat to Infineon’s business plans.

Specifically, and contrary to press releases by Macom, the court has made no decision that Infineon has “acted improperly in trying to operate in Macom’s exclusive field.” To the extent Macom has given the impression through press releases, analyst calls, and customer communication, that it has won the case or settlement is imminent, such impressions are false.