PRELIMINARY STATEMENT

ARM Ltd. and ARM, Inc. (collectively, “ARM”) respectfully submit this motion and

supporting brief in support of ARM’s Motion to Intervene pursuant to Fed. R. Civ. P. 24 as a

party-defendant in this action brought by Technology Properties Limited, Inc. (“TPL”). On

July 18, TPL served Infringement Contentions accusing multiple ARM processor cores (“ARM

Products”) contained within at least four Toshiba chips of infringing United States Patent No.

5,784,584 (“the ‘584 Patent”). On August 14, 2006, TPL filed a motion to supplement its

Infringement Contentions and accused ARM Products contained within at least 9 Toshiba,

NEC, and MEI chips of infringing the ‘584 patent.

By seeking a declaration that the underlying ARM Products infringe the ‘584 patent and

“a permanent injunction,” Complaint, Prayer for Relief § (d), TPL’s lawsuit requests relief that

would directly impair or impede ARM’s legal rights, capital investments, and business plans as

they relate to ARM’s ability to sell the accused products to its customers. For chips in which

TPL chose to identify ARM Products as the infringing portion, ARM is the party-in-interest.

Both Toshiba and NEC have already provided notice to ARM of their positions that TPL`s

allegations in this case satisfy the requirements of ARM`s indemnity obligations requiring

ARM`s participation.

As explained below, ARM is entitled to intervene as a matter of right pursuant to Fed.

R. Civ. P. 24(a) because it “claims an interest relating to the property or transaction which is

the subject of the action” and is “so situated that the disposition of the action may as a practical

matter impair or impede [its] ability to protect that interest.” Id. In the alternative, this Court

should grant ARM permissive intervention pursuant to Fed. R. Civ. P. 24(b). Furthermore,

ARM’s involvement in this litigation is a course of conduct recommended by the Federal

Circuit under the present circumstances.

ARM’s involvement does not expand this case in any fashion. ARM is simply the real

party-in-interest for a subset of the products already accused by TPL. ARM intends to comply

with the Court’s docket and discovery orders and the agreements reached between the parties

regarding discovery so that no existing party will be prejudiced or delayed by ARM’s defense

of its rights. ARM has consulted with the existing parties. Defendants Toshiba and NEC will

not oppose ARM’s motion and Toshiba may request separately that the Court grant

intervention. Plaintiff TPL and Defendant MEI have been apprised of the motion but have not

yet taken a position on the motion.

BACKGROUND

ARM is the leading designer of processors used in cellular telephones, hand held

computers and numerous other electronic products requiring low power consumption and small

size. ARM processor designs are incorporated into the integrated circuits of products sold all

over the world -- including those of the existing defendants. Currently, there are over five

billion such ARM-equipped processors throughout the world.

ARM designs processors that can be embedded into and form a component of larger

integrated circuits and licenses these processor designs to other companies that then make and

sell larger integrated circuits. The processor design supplied by ARM is commonly referred to

as the ARM “core” or ARM “processor core.”

To help maintain its competitive position, ARM invests heavily in research and

development – over $100 million in the last year alone. Indeed, one of ARM’s primary

research and development sites is located in Austin, TX – a facility intimately involved in the

design and test of the ARM “cores” and which employs over 125 scientists, engineers, and

other skilled personnel.

Since ARM’s business depends upon the utilization of its processor cores by its

customers, ARM is acutely sensitive to accusations of patent infringement. ARM’s

licensees/customers are justifiably concerned with allegations that their future products might

infringe a patent. Thus, it is important for ARM to eliminate promptly any cloud of uncertainty

created by allegations of infringement.

On October 24, 2005, TPL filed the present lawsuit against the named defendants. On

June 1, 2006, Toshiba provided notice to ARM of Toshiba`s position that TPL`s allegations in

this case satisfy the requirements of ARM`s indemnity obligations requiring ARM`s

participation Exh. A. On August 22, 2006, NEC provided notice to ARM of NEC’s

position that TPL`s allegations in this case satisfy the requirements of ARM`s indemnity

obligations requiring ARM`s participation. Exh. B.

On July 18, 2006, TPL served Infringement Contentions accusing at least four Toshiba

chips of infringement for which the identification of allegedly infringing technology was

various ARM Products. On August 14, TPL filed a motion to supplement its prior

Infringement Contentions (Dkt. # 96-98) and specifically accused ARM Products in at least 5

different Toshiba chips (Exhs. B-5, B-6, B-8, B-9 [3 chips]), 2 different MEI chips (Exhs. C-2,

C-3) and an NEC chip (Exh. A-21). TPL’s contentions are specifically targeted at ARM

Products. TPL identifies nothing unique to the accused chip outside of ARM’s Products for

these allegations of infringement of the ‘584 patent. For these accused chips, there can be no

doubt that ARM is the real party-in-interest against whom TPL seeks an infringement

determination.

ARGUMENT

I. ARM Should Be Allowed To Intervene As Of Right Pursuant To Fed. R. Civ. P.

24(a).

Because TPL’s claims for relief threaten both ARM’s specific products and its

substantial capital investment and business plans in the provision of processor cores to other

customers, and because ARM Products are specifically targeted by TPL’s Infringement

Contentions, ARM submits that it is entitled to intervene as a matter of right.1

The Fifth Circuit has adopted a four-part test to determine if intervention as of right is

warranted: “(1) the applicant must file a timely application; (2) the applicant must claim an

interest in the subject matter of the action; (3) the applicant must show that disposition of the

action may impair or impede the applicant’s ability to protect that interest; and (4) the

applicant’s interest must not be adequately represented by existing parties to the litigation.”

Heaton v. Monogram Credit Card Bank, 297 F.3d 416, 422 (5th Cir. 2002). ARM easily

satisfies these four requirements.

A. ARM’s Motion For Intervention Is Timely.

ARM’s motion to intervene is indisputably timely. To begin with, ARM moved for

intervention prior to the August 25, 2006 due date set by this Court for adding additional

parties. Additionally, ARM has acted within one month of becoming aware of TPL’s

Infringement Contentions identifying ARM “cores” as an infringing product and within 11 days

of TPL’s motion to amend its Infringement Contentions accusing additional ARM cores of

infringement. The 5th Circuit has held repeatedly that an intervention in this time frame is

1 See Fed. R. Civ. P. 24(a) (“Upon timely application anyone shall be permitted to

intervene in an action . . . when the applicant claims an interest relating to the property or

transaction which is the subject of the action and the applicant is so situated that the disposition

of the action may as a practical matter impair or impede the applicant’s ability to protect that

interest, unless the applicant’s interest is adequately represented by existing parties.”).

Case 2:05-cv-00494-TJW Document 100 Filed 08/25/2006 Page

timely. See, e.g., Sierra Club v. Espy, 18 F.3d 1202, 1206 (5th Cir. 1994) (intervention timely

when made within two months of becoming aware that interests were affected); Ass’n of Prof’l

Flight Attendants v. Gibbs, 804 F.2d 318, 320-21 (5th Cir. 1986) (intervention timely where

movant waited five months to intervene); Stallworth v. Monsanto Co., 558 F.2d 257, 267 (5th

Cir. 1977) (“By filing [its] petition less than one month after learning of their interest in this

case, the appellants discharged their duty to act quickly.”).2

Further, no party will be prejudiced by permitting ARM to intervene. ARM has moved

to intervene prior to any significant proceedings in the case. The timing of ARM’s motion will

thus cause no prejudice whatsoever to TPL, which will have ample time to respond to ARM’s

pleadings.3 ARM has begun to collect documents for discovery.

By contrast, ARM is threatened with substantial prejudice if its motion is denied. If

TPL is successful in obtaining a declaration from this Court that the chips containing the

accused ARM Products are infringing, ARM would suffer significant impact to its business.

See infra Section I.C; see also Espy, 18 F.3d at 1207 (finding prejudice to would-be intervenor

2 The Fifth Circuit considers four factors in determining whether a motion to intervene is

timely: “(1) the length of time during which the would-be intervenor actually knew or

reasonably should have known of its interest in the case before it sought to intervene; (2) the

prejudice that existing parties to the litigation may suffer as a result of the would-be

intervenor’s failure to apply for intervention as soon as it knew or reasonably should have

known of its interest in the case; (3) the prejudice that the would-be intervenor may suffer if

intervention is denied; and (4) whether unusual circumstances militate for or against a

determination that the application is timely.” Heaton, 297 F.3d at 422-23. These factors are

merely “a framework” and “[a] motion to intervene may still be timely even if all the factors do

not weigh in favor of a finding of timeliness.” John Doe # 1 v. Glickman, 256 F.3d 371, 376

(5th Cir. 2001). In this case, every factor weighs in favor of granting ARM intervention as of

right.

3 See, e.g., John Doe # 1, 256 F.3d at 378 (finding no prejudice to existing parties where

movant “filed its motion to intervene approximately one month after it became aware of its

stake in the [lawsuit] and before trial and any final judgment”); Diaz v. S. Drilling Corp., 427

F.2d 1118, 1125-26 (5th Cir. 1970) (holding intervention as of right to be timely even though

intervenor had known of the suit for a year, when “[a]t the time of the intervention, there had

been no legally significant proceedings . . . other than completion of discovery and a pretrial”).

where its “economic interests . . . are at stake” and where it would otherwise be denied “the

legal rights associated with formal intervention, namely the briefing of issues, presentation of

evidence, and ability to appeal”). Accordingly, ARM’s motion is timely.

B. ARM Has An Interest In The Subject Matter Of This Proceeding.

ARM obviously has a direct and substantial interest in this litigation. TPL has accused

virtually ARM’s entire product line of infringing its patents. ARM’s ability to honor

commitments to its customers are directly threatened by TPL’s Infringement Contentions and

Complaint, which seek a declaration that ARM’s processor cores are infringing products, as

well as an injunction against Toshiba/NEC/MEI chips containing those cores (Complaint,

Prayer for Relief § (d)).

Toshiba`s and NEC’s notices that it is their position that TPL`s contentions satisfy the

prerequisites of ARM`s indemnity obligations further establishes ARM`s significant interest in

the present litigation. Moreover, TPL effectively concedes that ARM has a substantial interest

in this litigation by referencing ARM no fewer than eight times in its Infringement Contentions.

As the Fifth Circuit has observed, the “interest” prong is a means of “‘involving as many

apparently concerned persons as is compatible with efficiency and due process.’” Espy, 18

F.3d at 1207 (quoting Ceres Gulf v. Cooper, 957 F.2d 1199, 1203 n.10 (5th Cir. 1992)).

ARM’s present position is clearly aligned with those situations in which other districts have

found intervention to be appropriate:

The motion to intervene filed by [a proposed intervenor] will also be granted, because it

puts a willing manufacturer defendant in the forefront of litigation aimed squarely at its

product. [The proposed intervenor] correctly claims that it has met the test for

intervention as of right under Rule 24(a). Its motion is timely; discovery has not even

begun in the case and case management issues are only now being addressed. It has a

sufficient interest in the litigation; indeed, as a manufacturer of the product component

which is at the heart of these cases, it has a compelling interest. It can rightly claim that

its interests will be impaired or affected, as a practical matter, by the disposition of the

action, unless it is involved in the case directly and able to make its positions known.

Case 2:05-cv-00494-TJW Document 100 Filed 08/25/2006 Page Finally, because it is uniquely situated to understand and defend its own product, its

interests are not adequately represented by existing parties to the litigation.

Honeywell Int’l Inc. v. Audiovox Comms. Corp., 2005 U.S. Dist. LEXIS 22933, *12-13 (D.

Del. 2005); see also LG Elecs., Inc. v. Q-Lity Computer, Inc. v. Asustek Computer, Inc., 211

F.R.D. 360 (N.D. Cal. 2002)(permitting intervention where plaintiff’s “patent infringement

contentions” identified intervenor’s products sold to existing defendant as the an infringing

product).

[An intervenor] has more than a speculative economic interest, as the products that it

sells will be at the heart of the litigation …. As [the intervenor] sells the computers that

[the plaintiff] alleges infringe its patents, there can be no question that [the

intervenor]has a legally protectable interest in the products that [the plaintiff] seeks to

place at issue in this patent infringement action. An applicant demonstrates a

significantly protectable interest when the injunctive relief sought by the plaintiffs will

have direct, immediate and harmful effects upon its legally protectable interests.

Id. at 364-65.

C. The Court’s Decision In This Case May Impair Or Impede ARM’s Ability

To Protect Its Interests.

Applying the third prong of the intervention-as-of-right test, there is no question that a

judgment finding ARM Products as the basis for Toshiba’s (or other party’s) infringement

“may, as a practical matter, impair or impede” ARM’s interest if intervention is not allowed.

Sierra Club v. Glickman, 82 F.3d 106, 110 (5th Cir. 1996). While formal collateral estoppel

and res judicata of an adverse decision would not apply against ARM, TPL would undoubtedly

attempt to use such results both in future licensing negotiations and litigation against other

ARM licensees, thus severely impairing ARM’s ability to license its products without ARM

ever having its “fair day in court.” ARM therefore easily satisfies the third requirement for

intervention as of right. See also, LG Elecs., 211 F.R.D. at 364-65.

Case 2:05-cv-00494-TJW Document 100 Filed 08/25/2006 Page

D. The Other Defendants Cannot Adequately Protect ARM’s Interests.

Finally, ARM easily satisfies the “‘minimal’” burden of showing “that [its] interest [is]

inadequately represented by the existing parties.” Espy, 18 F.3d at 1207 (quoting Trbovich v.

United Mine Workers, 404 U.S. 528, 538 n.10 (1972)). To satisfy the fourth requirement for

intervention as of right, ARM merely needs to show that “representation by the existing parties

may be inadequate.” Heaton, 297 F.3d at 425 (emphasis added); see also Trbovich, 404 U.S. at

538, n.10 ( a proposed intervenor need only establish that “representation of his interest ‘may

be’ inadequate; and the burden of making that showing should be treated as

minimal”)(emphasis added). As the Infringement Contentions makes clear, TPL’s interests are

squarely adverse to ARM’s interests. Furthermore, while the current defendants may be

capable of defending their own products, they are manifestly incapable of independently

representing ARM’s substantial economic interests in this litigation. For example, ARM’s

“cores” have both substantial similarities to, and substantial differences from, TPL-accused

“cores” made by the current defendants – a situation that clearly may lead to a potential conflict

of interest should ARM not be permitted the right to represent itself in this litigation.

In addition, certain infringement defenses may be available to ARM’s products that are

not available (or not available to the same degree) to other accused products. Indeed, ARM’s

cores are based on long-known technology that pre-dates the asserted patents. Selection of

noninfringement and invalidity theories could clearly differ between the various accused

products. Absent intervention, ARM would be at the mercy of the present defendants to

present theories favorable to ARM. Since those theories may, in fact, be unfavorable to the

present defendants, it is clear that “representation by the existing parties may be inadequate.”

Heaton, 297 F.3d at 425 (emphasis added).

Case 2:05-cv-00494-TJW Document 100 Filed 08/25/2006 Page

When different defenses may be available, Federal Circuit precedent requires

permission of intervention. See Israel Bio-Engineering Project v. Amgen, Inc., 401 F.3d 1299,

1306 (Fed. Cir. 2005)(reversing the district court`s denial of a Rule 24 motion to intervene

where the intervening party had a defense not available to other defendants).

Additionally, ARM’s financial interests are clearly different from the existing parties.

For example, TPL has accused several dozen defendant chips of infringement but only eight

chips are accused of infringement based upon the ARM Products. At some point in the

litigation, a defendant might be forced to make the business decision to settle. While such a

settlement decision might be rational when considering that defendant’s business, such

settlement might be completely irrational when considering ARM’s business interests. Given

this indisputable conflict, ARM has the right to be heard in its own name. See Heaton 297 F.3d

at 425; Glickman, 82 F.3d at 110; Espy, 18 F.3d at 1208; John Doe # 1, 256 F.3d at 381.

In addition, ARM brings to this litigation knowledge gleaned not only through

worldwide experience, but also by way of developing sophisticated cores for many, many

years. ARM’s entire business is processor core designs – not consumer products as is the case

with the presently-existing defendants. Thus, ARM has a unique perspective on the technical

nuances of both the ARM Products and the prior art. See, e.g., Nat’l Farm Lines, 564 F.2d at

383 (noting relevance “that petitioners in intervention possess experience and knowledge in a

complex area of business which the [existing party] does not have”). Moreover, ARM is

constantly developing and licensing new products to its customers, and TPL’s Infringement

Contentions are only one salvo in an apparent effort to accuse ARM’s “cores” in many

products of infringing. TPL has similarly accused many other non-parties both in the U.S. and

the rest of the world of infringement resulting from inclusion of ARM Products.

Case 2:05-cv-00494-TJW Document 100 Filed 08/25/2006 Page

Because ARM will apparently be combating TPL’s infringement accusations with many

customers ARM has particular expertise in the factual and technical issues raised by the TPL’s

accusations, ARM brings important expertise and perspective to the issues presented. See, e.g.,

Sw. Ctr. For Biological Diversity v. Norton, 268 F.3d 810, 823 (9th Cir. 2001) (noting that

intervention as of right was appropriate so that the party could “express their own unique

private perspectives” in the litigation).

Because ARM satisfies all four prongs of the Fifth Circuit test, ARM is entitled to

intervention as of right under Fed. R. Civ. P. 24(a).

II. In The Alternative, ARM Satisfies All Of The Requirements For Permissive

Intervention Under Fed. R. Civ. P. 24(b).

In the alternative, if the Court does not find that ARM is entitled to intervention as of

right, ARM easily satisfies the more liberal standard for permissive intervention. Permissive

intervention is allowed when (1) the applicant’s motion to intervene is timely, (2) the

applicant’s claim or defense and the main action have questions of law or fact in common, and

(3) the intervention will not cause undue delay or prejudice the rights of individual parties.

Fed. R. Civ. P. 24(b).

Here, ARM’s request is timely, TPL’s Infringement Contentions depend primarily on

claim construction which would be common to all accused products, and intervention will

conserve judicial resources and allow for the efficient resolution of all related issues in a single

proceeding rather than forcing ARM to defend itself in an apparently never-ending set of TPL

attempts to litigation against ARM by proxy. In addition, intervention will neither cause undue

delay nor prejudice the rights of either TPL or the other defendants. Accordingly, while ARM

is plainly entitled to intervention as of right, ARM also satisfies the requirements for

permissive intervention under Fed. R. Civ. P. 24(b).

Case 2:05-cv-00494-TJW Document 100 Filed 08/25/2006 Page

III. ARM’s Intervention Is Precisely The Action That The Federal Circuit

Recommends Under The Present Circumstances.

The Federal Circuit specifically identified participation in an existing lawsuit as one

method for a party to address allegations of infringement against its products and indemnitees.

[Defendant] also contends that it could be required to indemnify an entity that

potentially could be held liable in a different case for infringing the [asserted] patent. If

[Defendant’s] interests are affected by a different suit regarding the [asserted] patent,

then [Defendant] should join that action as a party, for example, pursuant to Federal

Rule of Civil Procedure 19(a)(2)(i).

Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1345 (Fed. Cir.

2001).

The difference between the Federal Circuit’s Rule 19 suggestion and ARM’s present

Rule 24 motion is merely one of labeling, not substance. In the 5th Circuit, such labels are

meaningless:

For starters, a court is not bound by how a party labels its motion. Obviously, “the relief

sought, that to be granted, or within the power of the court to grant, should be

determined by substance, not a label”. As noted, this principle is more than well

established. In this regard, courts have applied intervention or joinder standards to

motions to amend when plaintiffs have sought, by that means, to add claims of

additional parties.

Effjohn Intl. Cruise Holdings, Inc. v. A&L Sales, Inc., 346 F.3d 552, 560 (5th Cir. 2003)

(internal citations omitted). If anything, the substantive burden is less for a Rule 24 movant

than a Rule 19 movant.4 Additionally, the inclusion of ARM in this litigation does not

implicate any of the service, jurisdiction, or venue limitations of Rule 19.

As in Intellectual Prop. Dev. cited above, ARM could be required to indemnify a party

(Toshiba) to the present litigation. Thus, this Court should permit ARM’s attempt to comply

4 Rule 24 permits non-parties to protect their interests while Rule 19 exists largely to give those

parties actually named in a lawsuit a potential defense if they can meet their burden of

establishing that a party, which has not been sued, is indispensable, thereby making its joinder

necessary. See 7 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL

PRACTICE AND PROCEDURE § 1609 (3d ed. 2001).

with the course of action recommended by the Federal Circuit whether labeled as intervention

under Rule 24 or joinder under Rules 19 and/or 20.

CONCLUSION

For the foregoing reasons, ARM respectfully requests that the Court grant ARM’s

Motion to Intervene and (1) allow ARM to intervene as of right pursuant to Fed. R. Civ. P.

24(a); or (2) in the alternative, grant ARM permissive intervention pursuant to Fed. R. Civ. P.

24(b).