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Chip Maker Gets $35 Million Judgment 88

Posted by ScuttleMonkey
from the levels-of-hurt-i-don't-want-to-think-about dept.
Neoflexycurrent writes "The Ninth Circuit Court of Appeals has affirmed a $35 million judgment against Clear Logic for violation of the Semiconductor Chip Protection Act of 1984. The court concluded that the jury properly rejected Clear Logic's argument that it had legitimately reverse engineered Plaintiff Altera Corporation's mask work design to create cheaper application-specific integrated circuits."
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Chip Maker Gets $35 Million Judgment

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  • by seanadams.com (463190) * on Wednesday September 21, 2005 @02:26PM (#13615556) Homepage
    Altera makes chips that can be programmed to do different things (FPGAs).

    Clear Logic made "application specific integrated circuits" - ie they only do one specific thing that the customer needs, but are cheaper than programmable chips if you buy enough.

    The issue here is that Clear Logic's mechanism for receiving the design from the customer and making it into a chip is to use the programming data (bitstream) for an Altera chip. Then the data is used together with an image (mask) copied from an Altera chip to create the ASIC.

    The ruling is that Clear Logic's use of the mask in building the ASIC is not legitimate reverse engineering, but illegal re-use of Altera's IP.

    FYI: Clear Logic [clear-logic.com] seems to have been dead since 2003.

    editorial: only $35M?
    • A question: (Score:5, Interesting)

      by Ungrounded Lightning (62228) on Wednesday September 21, 2005 @02:44PM (#13615728) Journal
      Did Clear Logic:
        1) just reverse engineer the masks of the FPGA to figure out how to decode the programming stream and automatically make an ASIC with the same functionality, or
        2) actually clone significant sections of one or more of the FPGA masks themselves into the mask geometry generation step for the automatic ASIC design process, so that the geometry of the FPGA mask is reproduced (perhaps with edits, such as jumpers where programmable transistors would be) in the masks for the ASIC?

      If 1), IMHO they were blameless. If 2), IMHO the jury called it correctly.
      • Even (1) is probably a violation of something because the Altera synthesis tools, and their output, are likely licensed only to be used for Altera FPGAs. The customer does not buy the tool, he only buys a license.

        This does make sense because investment in R&D of the tools is extreme. But Altera had to do it because otherwise its FPGAs would be useless. However Altera does not want to support freeloaders who use the tools to program something else.

        Because of that, in your case #1 the reverse enginee

        • Even (1) is probably a violation of something because the Altera synthesis tools, and their output, are likely licensed only to be used for Altera FPGAs. The customer does not buy the tool, he only buys a license.

          So what? Then the customer is the one that should be sued, not ClearLogic; ClearLogic did not violate the EULA or in fact make any agreement at all with Altera. Altera just didn't like the competition, that's all, and decided to run a smaller company into the ground before they could take root.

          • ClearLogic probably did agree to the EULA if they were using the bitstream — they had to obtain a copy of the design-software in order to reverse-engineer the meaning of the bitstream. I'm not sure how relevant that is from the state-law perspective. Then again, Altera does have a lot of information on their website [altera.com]; they have a legal notice [altera.com] posted, but I doubt it's very binding, since it talks about files "on this CD' and isn't a click-through prerequisite to seeing all the data-sheets and manu
      • by dougxray (916546) on Wednesday September 21, 2005 @03:56PM (#13616384)
        NO !!!!
        I worked for Clear Logic from its begining to its end (we ran out of money paying lawyers). We never used any Altera masks ever. We spent a significant amount of time reverse engineering the masks so we would be legal. I believe the judge never understood this.
      • None of the above.

        As I understand it, Clear Logic reverse engineered the bitstream format, allowing them to retarget the placed, routed, FPGA design to an ASIC.

        Altera has their own ASIC conversion business. I'm sure they would rather not have Clear Logic poaching their FPGA customers.

        To put it in software-speak: It is as if Microsoft created a compiler that produces object code in a trade secret format that can only be decoded and run under Windows. Then another company reverse engineers the object code
      • Re:A question: (Score:2, Informative)

        by Mauz (869660)
        If I recall correctly, Clear Logic didn't create custom masks for each ASIC, but programmed their sea-of-gates chips by blowing metal fuses with a laser. However, as already pointed out, they did use Altera's files to create their laser program and that is what sunk their ship.
    • Altera Mask Set (Score:3, Informative)

      by phriedom (561200)
      I don't understand how Clear Logic would legally get ahold of an Altera chip mask set. But it seems pretty clear to me that if they are modifying Altera artwork, then they are not reverse-engineering, they are making a derivative work. Looks like the judgement is correct.
      • Re:Altera Mask Set (Score:5, Informative)

        by interiot (50685) on Wednesday September 21, 2005 @03:23PM (#13616073) Homepage
        Circuit masks [copyright.gov] are very specifically called out as a special case in copyright law.

        It seems like the distinction is similar to music recordings. That copying the majority of an audio recording, with a few tweaks of your own, is considered infringement. While the "underlying ideas" are not necessarily protected, eg. so you could play the exact same notes with very similar timings again on your own instrument, and that would not be considered to be a copyright violation. (eg. they could have reverse engineered the logic of the circuit and re-generated their own, different, layout)

        • Re:Altera Mask Set (Score:3, Insightful)

          by phriedom (561200)
          So to extend the metaphor, did they A)figure out what the notes were and replay them or B) sample the original.

          If it is as dougxray asserts above and they never touched or saw an Altera mask, then it is A and I have to reverse my opinion. Setting the music metaphor aside, if they figured out what the mask has to look like given the verilog code as an in and the resulting data as an out, then that sounds like a clean reverse-engineering. And making a derivative customization of your own workalike mask usi
    • Thanks for the clarification. But what's the main benefit for Clear Logic of doing such a thing?
    • I worked for Clear Logic from its begining to its end (we ran out of money paying lawyers). Clear Logic never used any Altera masks ever in any way. To the contrary, Clear Logic spent a significant amount of time reverse engineering Altera parts, specifically to avoid the very law suit Altera brought against Clear Logic. Its not about the law, its not about justice, its about money. Altera had alot more of that than Clear Logic did.
  • Non-Protectible (Score:4, Insightful)

    by Krast0r (843081) on Wednesday September 21, 2005 @02:27PM (#13615566) Homepage Journal
    "The trial court's instructions initially defined "legitimate reverse engineering" to allow copying and analyzing only "non-protectible concepts or techniques" embodied in a mask work." It would seem that nothing these days is "non-protectible" if RIAA, MPPA or SCO have anything to say about it.
    • It would seem that nothing these days is "non-protectible" if RIAA, MPPA or SCO have anything to say about it.

      Well, first of all, the SCO issue is completely different. IBM isn't arguing that their copying was protected. Their arguign that no copying happened in the first place.

      Second of fall, an MPAA representative has stated (though this may have been a case of 'foot in mouth') that there are legitimate fair use rights for copying music CDs, no doubt the RIAA's chagrin. (sorry, can't find the quote off h
  • Which Chips? (Score:2, Insightful)

    by Cyclotron_Boy (708254)
    Altera [alter.com] makes some OK FPGAs, custom ASICs, and PAL-type chips, but I wonder which chips specifically they are talking about. Reverse-engineering a custom ASIC seems quite suspect indeed...
    • Correct link is http://altera.com/ [altera.com]
    • Re:Which Chips? (Score:2, Informative)

      by lixee (863589)
      Custom ASIC? Pleonasm.
    • I'm guessing taking FPGA code and producing a dedicated ASIC.

      Imagine someone buying one Altera eval board (given away if your company is big enough), designing code, getting the timing all worked out, putting it in a board and then going through all the testing. Voila, working product. Only problem? That FPGA is expensive.

      So, enter clear logic, they'll copy Altera's mask and subtract all the bits that aren't needed. They'll guarantee identical timing, just lower cost and power. Altera is thus shafted out of
  • by scovetta (632629) on Wednesday September 21, 2005 @02:31PM (#13615612) Homepage
    Ninth Circuit affirms $35 million judgment against semiconductor manufacturer

    Case is rare appellate decision under Semiconductor Chip Protection Act of 1984

    Altera Corporation filed suit in the U.S. District Court for the Northern District of California against Clear Logic, Inc., a competitor in the semiconductor industry. Altera alleged that Clear Logic had violated the Semiconductor Chip Protection Act of 1984, 17 U.S.C. 901 et seq. ("SCPA"), by using the bitstream generated when programming Altera programmable logic devices to create application-specific integrated circuits. A jury found in favor of Altera, and awarded more than $30 million in damages, plus an additional $5 million in interest and costs.

    Clear Logic appealed to the Ninth Circuit, arguing that the trial court improperly instructed the jury regarding the affirmative defense of legitimate reverse engineering, which is provided for under the SCPA. The court affirmed, however, holding that certain misstatements of the law in the jury instructions were harmless error.

    The trial court's instructions initially defined "legitimate reverse engineering" to allow copying and analyzing only "non-protectible concepts or techniques" embodied in a mask work. This was an incorrect statement of the law, but the court concluded that further instructions adequately provided correction. The later instructions explained that "it is permissible [under the SCPA] to reproduce 'a registered mask work' as a step in the process of creating an original chip, so long as the purpose of reproducing the chip is appropriate."

    Accordingly, the court held that the jury was able to properly conclude that the Clear Logic mask works incorporated into the application-specific integrated circuits were not original, but were copies prohibited under the SCPA.

    ---
    And my question is: What the hell is a "mask"? Can someone please post the Wikipedia entry that will explain all the background information I need to know on the subject? It looks to me like a run of the mill, "he copied me" case. Why is this news?
    • by Colonel Panic (15235) on Wednesday September 21, 2005 @02:38PM (#13615672)
      The 'mask' in this context can be thought of as a set of transparancies with lines on them that define wires on the chip. Chips are made with a photo-lithography process where light is shined onto silicon through a mask. The lines on the mask block the light from hitting the silicon and depending on the process the areas which are exposed on the silicon will be etched away by acids/solvents. Multiple masks are used to create different features/layers on the silicon. some create wires, others create transistors.
    • The mask is like a "negative" for a film. You can think of the chip as the silicon equivalent to the paper used when projecting a film negative onto a photograph.

      In this case, the mask was probably used as a starting point -- FPGA's (Field Programmable Gate Array) have switches that control gates for interconnects between logic units and PGA's have little fuses that control the interconnects. They minimally need to know the logic units used and how the interconnects connect them which they could reverse
    • Others have answered your question, but I would like to take the opportunity to recommend `Inside Intel,' a biography of one of Intel's founders. The book covers the history of Intel and AMD (up to 1997 when it was written) and includes a lot of history of chip development techniques as well as how the current IC market evolved. Not quite news for nerds in its purest form, but worth reading anyway - and you can probably pick up a copy quite cheaply (mine cost £3 from a bargain book shop).
  • by d1v1d3byz3r0 (758848) on Wednesday September 21, 2005 @02:42PM (#13615710)
    does anyone else find the phrase "the jury properly rejected Clear Logic's argument" to be ironic?
    • Do I find it ironic that a judge can decide whether a jury made the right decision? Sure...
    • But it did make me wonder if the jury was composed of the more obnoxious Slashdot readers.
    • Perhaps ironic, but not that funny (at least not +5 funny imo).

      For funny, I seem to remember headlines during the antitrust case proclaiming stuff like, "Big Government Hard on Microsoft."

      There's funny in there, although no irony. To make my example ironic, Microsoft would need to have the hard on. :)
      • irony involves a contradiction of context and literal meaning. the literal meaning of "micro soft" juxtaposed with the terms "big" and "hard" makes the phrase ironic because its humor is rooted in the differences between the literal and contextual meaning of "microsoft". maybe slashdot needs a +5 ironic moderation option.
  • masks and copyright (Score:3, Interesting)

    by Colonel Panic (15235) on Wednesday September 21, 2005 @02:43PM (#13615718)
    It's been a while since I worked in that part of the industry, but as I recall, masks used to be copyrighted. Is that part of the issue here?
  • by Se7enLC (714730) on Wednesday September 21, 2005 @02:47PM (#13615749) Homepage Journal
    Imagine being on the jury for this case.

    From the article:

    Clear Logic appealed to the Ninth Circuit, arguing that the trial court improperly instructed the jury regarding the affirmative defense of legitimate reverse engineering, which is provided for under the SCPA. The court affirmed, however, holding that certain misstatements of the law in the jury instructions were harmless error. The trial court's instructions initially defined "legitimate reverse engineering" to allow copying and analyzing only "non-protectible concepts or techniques" embodied in a mask work. This was an incorrect statement of the law, but the court concluded that further instructions adequately provided correction. The later instructions explained that "it is permissible [under the SCPA] to reproduce 'a registered mask work' as a step in the process of creating an original chip, so long as the purpose of reproducing the chip is appropriate."

    As an electrical engineer, I'm having a hard time fully following all the legalese on this - imagine having to learn what reverse-engineering is, what an FPGA is, and the entire design process while on the jury?

    I bet they just sat back in their little deliberation box:

    I dunno, they look guity to you, Jeb?
    • by mark_hill97 (897586) <masterofshadows@ ... .com minus punct> on Wednesday September 21, 2005 @03:23PM (#13616079)
      Indeed that would be hard. In my opinion what they should have done was get electrical engineers from non-competetive firms and had them fufil the duty of the jury. It seems to me this would be a much better interpretation of a jury of your peers.
    • by DoctorHibbert (610548) on Wednesday September 21, 2005 @04:45PM (#13616752)
      I've served as an expert witness in a patent case, one company was suing another for a patent violation. The patent was ridiculous, the concepts patented had already been around commerically for over 10 years at the time they filed their patent. Any programmer would have understood the issues once explained. However, the jury is just about high school education levels. Many don't even own a computer. Good luck getting them to understand.

      Indeed, in the end, its not who's right, it's whose most credible to the jury. And usually that's the side that's most likable. The actual facts don't really matter.
      • just about every court case where witnesses are called, someone lies under oath, if they didn't then most cases would be easier to solve at trial, someone says one thing, another says the opposite then the jury decides who is more credible and nobody usually gets nailed for perjury, so what the point in 1) making people swear to tell the truth when clearly someone will lie? and 2)threatening to prosecute for perjury when it clearly happens in almost every trial. 12 individules try to decide who lied the lea
  • At least the court is responsible, being the Ninth Circuit court and all :)
  • by EraserMouseMan (847479) on Wednesday September 21, 2005 @03:20PM (#13616054)
    Q: Where do you go to sue somebody for violating a semiconductor law?

    A: A Circuit Court!!!

    Bad, Bad!!!
  • by Anonymous Coward on Wednesday September 21, 2005 @04:00PM (#13616417)
    If I'm reading the article correctly, and the law, and the decision -

    The law in question allows someone to reproduce a photomask /if it's appropriate under IP law to do so/ - It allows them to reverse-engineer a photomask if it's public domain, has been licensed to them, or is owned outright by them - OR if they're trying to figure out how to debug/interface their own code that's being programmed onto an Altera FPGA. It does not seem either of these is the case.

    What Clear Logic seems to have done is get ahold of an Altera FPGA / photomask, and reverse-engineer the programmer portion of the chip - And then made their own device, which translated signals that COULD HAVE been sent to an Altera Field Programmer into the Altera's internal signals to program the Gate Array, and used /those/ signals to lay out their own ASIC.

    Basically, they seem to have hijacked Altera's programming controller (a sizeable chunk of IP) for their own purposes. And probably didn't license it.

    Altera is suitably disturbed because every one of the ASICs Clear Logic makes with their stolen work could have (in theory, anyway) been money in their pocket from licensing the field programmer or could have had their FPGA in place.

    It's as if one has a dynamic web-page generator and backend database, and someone stole the code for that dynamic web page generator & backend database and used it to churn out their own static pages (and sold them) because one's program inherently produces good design.
    • by Anonymous Coward

      This is pretty darn close to what was happening. There's a little more to the story: Clear Logic not only hijacked Altera's masks, bitstream and programmer, they were also providing Altera's CAD software, Quartus II [altera.com], as the CAD development environment for their users. Their flow for their users was: design and debug in Quartus II, send the bitstream to Clear Logic, get an ASIC back, bypass Altera.

  • How you explain the intricacies of computer architechture to 12 jurors sufficiently that they can arrive at a well-informed verdict, yet tech support people become continuously frustrated trying to explain to the average user that it's a CD tray and not a cup-holder, etc.?

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