Legal Battlefield In Emulation

Given the rate of research and development within the EDA industry, you might expect it to be a highly litigious industry, but apart from theft claims, there have not been that many law suits brought to bear – except in the area of . Emulation has, since its early days in the early 1990s, always been a legal battlefield, and the hostilities continue to this very day. It should be noted that I am not a lawyer and so I apologize if I get any of the complicated legal stuff wrong in this blog.

The story starts in 1988 when Mentor Graphics filed a patent for a “reconfigurable hardware implementation system”. This patent was granted in 1991 with the inventors being Michael R. Butts and Jon A. Batcheller. This was about the time when Mentor was suffering under the weight of the Falcon Framework, a development that came close to bringing the company down. In dire need of cash, Mentor sold all of its emulation assets, including patents, to in 1992 for $200,000 and warrants for Quickturn stock.

Also in 1988, Quickturn had filed for its own patents, and after acquiring the Mentor patents, decided which claims from which patents had been the first invention.

In 1993, Quickturn acquired PiE Design after having sued them for patent infringement.

Meanwhile, in France, a new emulation company, Meta Systems, had been developing emulators for the French Ministry of Defense and in 1994 introduced a commercial product called SimExpress. In need of funding and a lack of venture capital, Meta sought a partner. Mentor had again become interested in emulation and both Quickturn and Mentor approach Meta about a sale. The French Government gave the nod to Mentor and so started the lengthy legal battles between Mentor and Quickturn that created some of the highest drama ever seen in the EDA industry (I am referring to the tale of , CEO of Aptix who is spending 17 years in federal prison for perjury, obstruction of justice, and witness tampering.)

Quickturn sued Mentor using the very patent that Mentor had sold to Quickturn, and this is where we start to get into some interesting legal twists. Because Mentor had been the initial creator of the technology and the patent, Mentor was barred from contesting the validity of the patent under the doctrine of assignor estoppel. This doctrine is meant to stop a party from selling something that it later declares is worthless. Quickturn had its first legal success in 1996 when the International Trade Commission prevented importation of SimExpress into the United States.

The battles raged on, and in 1998 Mentor launched a hostile acquisition attempt for Quickturn. This was foiled when a white knight – Cadence – came in with a higher offer for Quickturn and that deal closed in 1999. The battles continued and both side won and lost some cases – ultimately the only winners were the lawyers. In 2003, both sides laid down their arms with the final settlement being $18M in Cadence’s favor.

But the story does not end here. In 1998, who was the director of R&D for Mentor’s Meta Systems acquisition filed a patent (6,240,376 – Method and apparatus for gate-level simulation of synthesized register transfer level designs with source-level debugging). Before its publication, Burgun left Mentor and was the founder of Emulation and Verification Engineering (EVE) in 2000.

It wasn’t long before Mentor and EVE locked horns. Again several suits were filed, settled. One of the patents Mentor was using was the ‘376 patent, but this time Mentor was the party using assignor estoppel against Burgun.

In 2012, EVE found a white night in the form of Synopsys, a deal that was quickly assimilated. While Synopsys also was barred from challenging the ‘376 patent, they called on another legal doctrine – an inter partes review of the patent. An inter partes review can be initiated by a person who is not the owner of the patent. Because Burgun had assigned ownership to Mentor, Burgun, EVE and Synopsys were able to call for a review. Such a review enables the PTO to review the patent again based on newly supplied documents. While some of the claims were found to be invalid, the patent stood and in October 2014, Mentor won the case with a $36M judgment. Synopsys plans to appeal and so the legal battles continue.

I can’t even begin to think of the many millions that have gone to the lawyers. And neither is it clear that anyone has really gained an advantage from all of the lawsuits. But emulation is a highly profitable segment, and the battles being fought here may continue for some time.