Maxpower Semiconductor, Inc. v. Rohm Semiconductor USA, LLC

Maxpower Semiconductor, Inc. v. Rohm Semiconductor USA, LLC

Opinion

ORDER GRANTING PETITION TO COMPEL ARBITRATION

Re: Dkt. No. 1

The Technology License Agreement between MaxPower and Rohm delegates the question of arbitrability to the arbitrator. As a result, this Court dismissed the declaratory judgment action that Rohm filed against MaxPower in the Northern District of California. See Rohm Semiconductor USA, LLC v. MaxPower Semiconductor, Inc., 2021 U.S. Dist. LEXIS 21756, 2021 WL 822932 (N.D. Cal. Feb. 4, 2021). Rohm nonetheless continues to pursue invalidation of MaxPower's patents before the Patent Trial and Appeal Board (PTAB). Thus, MaxPower now petitions this Court for an order requiring Rohm to halt its effort to convince the PTAB to invalidate the patents. For the reasons discussed in this ruling and at the hearing, the petition is granted. Because it is for the arbitrator to decide in the first instance whether the [*2]  patent dispute is subject to arbitration, Rohm may not seek adjudication of the dispute in any other forum until that decision has been made. Given the time-sensitive nature of the issue, this ruling assumes that the reader is familiar with the facts, the case history, and the applicable legal standards.

The Supreme Court has held that "[w]hen parties agree to arbitrate all questions arising under a contract," there is no "distinction between judicial and administrative proceedings"— each infringes upon the parties' agreement to arbitrate. Preston v. Ferror, 552 U.S. 346, 359, 128 S. Ct. 978, 169 L. Ed. 2d 917 (2008). The command that arbitration agreements "shall be valid, irrevocable, and enforceable" in contracts involving a patent therefore applies with equal force to administrative adjudications. 35 U.S.C. § 294. Because the parties have delegated the question of arbitrability to the arbitrator, whether the patent disputes before the PTAB fall within the scope of the arbitration agreement must be determined by the arbitrator in the first instance.

Rohm argues that it is unnecessary to grant MaxPower's petition (which it styled a "petition to compel arbitration") because the parties are already in arbitration. But the fact that the parties have already begun to arbitrate [*3]  does not prevent this Court from granting relief necessary to effectuate the parties' arbitration agreement. If Rohm had initiated a lawsuit in state court as well as this Court, this Court could have ordered a stay of the state court litigation in furtherance of its ruling compelling the parties to arbitration. See, e.g., Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1106 (9th Cir. 2002) (upholding the district court's grant of a petition to compel arbitration and stay of related state court action); Terminix International Co. v. Palmer Ranch Limited Partnership, 432 F.3d 1327, 1333 (11th Cir. 2005) (reversing the district court's denial of a motion to compel arbitration and instructing the district court to stay related state court proceedings on remand); McGuire, Cornwell & Blakey v. Grider, 765 F. Supp. 1048, 1052 (D. Colo. 1991) (granting a petition to compel arbitration and ordering the stay of related state court proceedings); CarMax Auto Superstores California LLC v. Hernandez, 94 F. Supp. 3d 1078, 1127-28 (C.D. Cal. 2015) (same). That the proceeding at issue here is before the PTAB, rather than a state court, makes no difference; an injunction ordering Rohm to stand down in the non-arbitral forum until the arbitrator determines whether the patent disputes fall within the scope of the parties' arbitration agreement is appropriate in either situation.

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