UPDATE: Cooler Master Responds to AMD Fury X Infringement Claims (Report)

On December 5, we broke news on Asetek's Cease & Desist order sent to AMD, pursuant to the sale of its liquid-cooled R9 Fury X video card. Asetek previously won a suit against Cooler Master USA for its closed-loop liquid cooler products (CLCs), to include the Seidon, Nepton, and Glacer (Swiftech-supplied) lines. The patents primarily discussed are 8,240,362 and 8,245,764.

By judge and jury, CMI USA (Cooler Master USA) was found guilty of patent infringement of the pump-on-coldplate design and ordered to pay 14.5% royalties. Inability to pay-out on its ruled dues ultimately saw a royalties percentage increase to 25.375%, followed by banishment of all affected Cooler Master CLCs from US markets.

This article fully details the relevant legal history of liquid cooling companies, including the rise of Asetek & CoolIT, their patent lawsuits against one another, the recent lawsuit against Cooler Master, and the C&D against AMD's R9 Fury X.

The initial ruling was in December of 2014, before the R9 Fury X was publicly known to exist, and detailed the following products as infringing:

• Seidon 120V
• Seidon 120V Plus
• Seidon 120M
• Seidon 120XL
• Nepton 140XL
• Seidon 240M
• Glacer 240L
• Nepton 280L

Eventually, the AMD R9 Fury X would come to market and be revealed as using a Cooler Master CLC, attracting further legal attention from Asetek. We published the initial statement and C&D notice from Asetek in this article, then followed-up with a response from AMD (who effectively deferred to Cooler Master).

Cooler Master reached-out to GamersNexus with a statement which initially confused us, as it read:

"Although Asetek had originally included Cooler Master in the litigation, Asetek voluntarily and unconditionally dismissed all of its infringement claims against Cooler Master before trial. Additionally, the Cooler Master heat sink used with the Radeon Fury X was not accused in the litigation, was not found by the jury to infringe, and was not included in the judgment. The heat sink's design is also fundamentally different from the accused devices in the litigation."

Looking through this carefully, Cooler Master indicates that Asetek had voluntarily dismissed its infringement claims against the company – but US courts found Cooler Master USA guilty of patent infringement; in fact, it went all the way to a jury. This was not a matter of a settlement, but a documented case. Cooler Master also says that the “Fury X […] was not found by the jury to infringe,” which potentially comes off as a little misleading since the Fury X was not included (read: did not yet exist) in the initial suit. To say that the card was “not found by jury to infringe,” which seems an active declaration of non-infringement, is misleading; it would be more clear to say that the card “was not included in the lawsuit.”

We sent the below email to Cooler Master:

// From Stephen Burke, Editor-in-Chief at GamersNexus.net

Thanks for reaching out.

Can you clarify something for me?

"Although Asetek had originally included Cooler Master in the litigation" -- is this ("the litigation") referring to the original trial involving the Seidon coolers (the one that ended in a 14.5% royalty)? Or is it referring to the new cease & desist order / some other litigation? Are you saying Asetek dismissed its infringement claims pertaining to the Seidon, Nepton, and Glacer coolers? Just making sure we're talking about the same thing. It was my understanding that these devices were found to be infringing. If you could help clear this up for me, it would be really helpful!

For my article, could you also expand on this?

"The heat sink's design is also fundamentally different from the accused devices in the litigation"

I want to make sure we explain to readers why CM thinks the Fury X design is specifically different, to the point that it is not an infringing device. What specifically can I mention that you feel differentiates the Fury X heatsink from the Seidon/Nepton devices?

Thanks! I want to make sure we represent all sides fairly -- Asetek, AMD, Gigabyte, and CM. Having this additional information will help inform my writing. We will post a new article and update the previous two once I hear back.

Thank you!

- Steve.

Following this, we began reading through court documents and patents, trying to ensure that we understood Cooler Master's statement. Prior to a response from Cooler Master, we sent this second email:

// From Stephen Burke, Editor-in-Chief at GamersNexus.net

After further research, it is my understanding that Asetek most certainly won an injunction against Cooler Master on grounds of patent infringement. Public court documents suggest that Cooler Master was found guilty of patent infringement by Judge Tigar in California courts.

Could you please educate me on how the following sentence is true? "Asetek voluntarily and unconditionally dismissed all of its infringement claims against Cooler Master before trial."

My research indicates that Asetek did not dismiss infringement claims and, in fact, won on grounds of those claims. I am a little confused regarding your statement. Are you suggesting that the Asetek lawsuit did not actually find Cooler Master guilty of infringement of the Seidon, Nepton, and Glacer coolers? Could you please educate me further on your statement?

Thanks!

- Steve.

The following was sent by Cooler Master:

// From Cooler Master

Thank you very much for your prompt feedback and questions.

On your question regarding the dismissal of Cooler Master, Asetek did stipulate to dismiss Cooler Master voluntarily and unconditionally before trial, and the Court did so dismiss Cooler Master. Please see the attached stipulation filed by Asetek and the dismissal issued by the Court during September 2014, which was about three months before trial.

But you are correct that, despite Asetek’s dismissal of all infringement claims against Cooler Master, Asetek later obtained an injunction against Cooler Master without any prior jury verdict or judgment against Cooler Master. That is one reason why Cooler Master is appealing the injunction.

As to your question about the new heat sink’s design, we are investigating on what details may be shared at this time in light of the ongoing litigation and the confidentiality of certain matters. But suffice to say that there are fundamental differences in the new heat sink’s structural design that distinguish it from the devices accused in the litigation.

We can clarify Cooler Master’s statement as follows:

"Only CMI USA went through trial in the litigation, and the case is currently on appeal. Although Asetek had originally included Cooler Master in the litigation with CMI USA, Asetek voluntarily and unconditionally dismissed all of its infringement claims against Cooler Master before trial. Additionally, the Cooler Master heat sink used with the Radeon Fury X was not accused in the litigation, was not found by the jury to infringe, and was not included in the judgment. The heat sink's structural design is also fundamentally different from the accused devices in the litigation."

But if the first two sentences above require too much explanation, for now, we can shorten and simplify Cooler Master’s statement as follows:

"The Cooler Master heat sink used with the Radeon Fury X was not accused in the litigation, was not found by the jury to infringe, and was not included in the judgment. The heat sink's structural design is also fundamentally different from the accused devices in the litigation."

Please feel free to publish either of the above statements. Thank you very much.

Now it becomes more clear.

The “Cooler Master” discussed in all the above correspondence pertains to Cooler Master (Taiwan), known simply as “Cooler Master,” not its separate-but-related “Cooler Master USA” (CMI USA) sister entity. Cooler Master (Taiwan) is therefore telling GamersNexus that Asetek's initial legal correspondence included Cooler Master (Taiwan) in the patent infringement lawsuit, but dismissed its claims following realization that it is CMI USA (Cooler Master USA) which is responsible for the sale of Cooler Master-made CLCs in the US market. From our independent research, this statement is factually accurate; Asetek did dismiss Cooler Master (Taiwan) from the lawsuit that it ultimately won against Cooler Master USA.

What Cooler Master (again, Taiwan) did not make clear in its first statement was that a Cooler Master company, Cooler Master USA, was in fact found guilty of patent infringement. This was left unmentioned, a critical fact potentially obfuscated by a confusing web of companies. “Cooler Master” proper was dismissed from the lawsuit, given that Cooler Master USA is the responsible entity for sale of CM CLCs in the US. CMI USA, or Cooler Master USA, is the entity that owed royalties to Asetek, but not “Cooler Master” (Taiwan).

Definitely a little confusing to follow without context, but things started making more sense as we continued our dialogue:

// From Stephen Burke, Editor-in-Chief at GamersNexus

Thank you for your detailed response -- I think I'm starting to understand where you're coming from.

To clarify the language, here is what I picked up from your new statement -- let me know if this is accurate:

Cooler Master, which is perceived as a separate entity from CMI USA, was dismissed of infringement claims by Asetek; however, CMI USA (a Cooler Master company?) was found guilty on 29 counts of patent infringement by a jury in the Asetek v. CMI USA ruling. Cooler Master Co. Ltd., the company under which you are employed, was dismissed of patent infringement charges because CMI USA is the entity which was ultimately engaged by Asetek on said charges (CMI USA eventually losing that battle).

Am I correct in my understanding that CM and CMI USA are treated as two separate entities within the ruling, and thus Cooler Master Co. Ltd. ("CM") was dismissed of any infringement charges despite CMI USA's ("Cooler Master America") then-ongoing involvement in the case?

If that is the correct interpretation on my part, then as a reviewer or as an end-user who buys liquid cooling, could you please educate me on what difference it makes (Cooler Master Co. Ltd. vs. CMI USA) to the end-user? From what I've read in court documents, it sounds as if all products found to infringe upon the patent (incl. Seidon 120, et al.) are barred from sale within the United States, regardless of which Cooler Master or CM division is selling those devices. As a user, what difference does it make regarding the "Cooler Master" vs. "CMI USA" distinction? Does the fact that Cooler Master Co. Ltd. was dismissed of charges change my ability to buy Cooler Master CLCs? It would help immensely if you could help answer that.

I ask because the original statement, which included the text "Asetek voluntarily and unconditionally dismissed all of its infringement claims against Cooler Master before trial," could sound to the reader as if Asetek dismissed its charges against CMI USA, though that obviously was not the case. I believe that, to readers (and before reading your email more carefully, myself), "dismissed [...] infringement claims against Cooler Master" reads as though all of Cooler Master (CMI USA) was also dismissed of charges, as the reader will likely not understand that there is a distinction made between the two companies (CM Co Ltd & CMI USA).

Re: Fury X --

The R9 Fury X, as I recall, did not publicly exist at the time of the Asetek v. CMI USA lawsuit. As I understand it, the Fury X uses a standard radiator and tubing for its heat exchange, then hosts a pump atop the coldplate for conduction and cooling. The coldplate and pump, unless I am mistaken, are a part of the same unit and use the same internals as existing CM coolers (were you to take apart the Fury X CLC, it closely -- if not identically -- resembles the Seidon CPU block). Could you inform me as to the structural difference(s) that exist which would differentiate this product from the currently affected devices?

Thank you!
- Steve.

We didn't expect much additional information on the R9 Fury X cooler differences (ongoing battles often yield little detailed case information until conclusion), but it's always worth asking. Cooler Master responded with its final statement, found below:

// From Cooler Master

Thank you very much again for your questions. In light of them, below please find Cooler Master (Taiwan)’s revised statement:

"Only CMI USA, a separate entity from Cooler Master (Taiwan), went through trial in the litigation, and the case is currently on appeal. Although Asetek had originally included Cooler Master (Taiwan) in the litigation with CMI USA, Asetek voluntarily and unconditionally dismissed all of its infringement claims against Cooler Master (Taiwan) before trial. Additionally, the Cooler Master heat sink used with the Radeon Fury X was not accused in the litigation, was not found by the jury to infringe, and was not included in the judgment. The heat sink's structural design (with physically separable chambers, for example) is also fundamentally different from the accused devices in the litigation."

I hope the revised statement above is helpful. As these matters are best left to the legal process, we respectfully have no further comment at this time. Many thanks for your kind understanding.

This statement is certainly more helpful and easier to follow and, and acknowledging that CM is withholding further information until the legal battle is resolved, we find this level of detail to be acceptable.

Cooler Master believes that its “physically separable chambers” will protect the R9 Fury X should Asetek decide to pursue its Cease & Desist beyond initial threats. Asetek's patents have generally boiled-down to the pump existing atop a coldplate, which then gets mounted atop a socket to cool the GPU or CPU (or other silicon). We are in a state of “wait and see” at this point, with eyes on Asetek to either pursue its C&D threats or move along. If this drags on long enough, it could be the case that the Fury X exits a state of market relevance as new flagships emerge that, theoretically, would invest extra care in avoidance of additional legal trouble (substantiated or not).

Initial Asetek & AMD Statements

Above: Part of patent '764 (Asetek).

Above: Part of patent '362 (Asetek).

To bring everyone up to speed, the below statements were provided exclusively to GamersNexus by Asetek (C&D issued to Gigabyte and AMD) and AMD (response to C&D).

Asetek statement to GamersNexus regarding AMD & Gigabyte:

“There is no licensing agreement in place with Cooler Master, nor do we plan to offer any in the foreseeable future. Asetek sued Cooler Master and CMI USA, Inc. (Cooler Master’s US affiliate) for infringement of Asetek’s US Patent Nos. 8,240,362 and 8,245,764, and the jury found that the Cooler Master products at issue infringe Asetek’s patents and awarded damages to Asetek. The judge also entered an injunction prohibiting Cooler Master and CMI USA from importing or selling the accused products in the US, and the judge awarded enhanced damages because of continued sales after the jury’s verdict. The injunction states ‘[a]s used herein, Infringing Products shall mean the following Cooler Master products: Seidon 120M, Seidon 120XL, Seidon 240M, Seidon 120V, Seidon 120V Plus, Nepton 140XL, [Nepton 280L], Glacer 240L, and products not more than colorably different from them.’

“Asetek’s attorneys have recently sent cease and desist letters to Gigabyte, demanding that it cease selling Giga-Byte’s GEFORCE GTX 980 Water Force (sold under at least model number GV-N980WAOC-4GD) because it contains the Seidon 120M found by the court to infringe Asetek’s patents.

Asetek’s attorneys have also written a cease and desist letter to AMD, demanding that it stop selling its Radeon R9 Fury X product, because it infringes Asetek’s patents. Our attorneys have had some difficulty obtaining a Gigabyte GV-N98TXTREME W-6GD, but we expect to receive and analyze one very soon for infringement.”

AMD's statement and reply as sent to GamersNexus:

“We are aware that Asetek has sued Cooler Master. While we defer to Cooler Master regarding the details of the litigation, we understand that the jury in that case did not find that the Cooler Master heat sink currently used with the Radeon Fury X infringed any of Asetek’s patents.”

Why was AMD Involved at All?

AMD makes and sells the R9 Fury X without board partner cooler input, meaning that AMD acts as the manufacturer not only for the GPU itself (the silicon and memory), but for the entire card. This is then sold to AIBs for retail under brand names on retailers (Sapphire, XFX, Gigabyte, et al.).

Cooler Master makes the CLC that is being targeted by Asetek. AMD, through a series of bulk purchases, bought the CLC from Cooler Master. Even still, Asetek's C&D went to AMD, following separate legal victories over Cooler Master USA against other CLC products (and CMI USA's failure to pay on royalties imposed by the court).

Asetek was originally rumored to supply the AMD Fury X CLC, a rumor reinforced by Asetek's own press release which stated a “design win with an undisclosed OEM customer for a graphics liquid cooling product.” That's already limiting choices to either nVidia and AMD and, at the time, everyone knew it was the Fury X.

Additional import documents also detail early import of Asetek CLCs for use in the Fury X. The first record of related product import seems to be dated for November 7, 2014, marking “Printed Circuit Board Assembly (Video Graphic Card) C880 Fiji XT P/N. 102-C88001-00” as the shipment. A bit later, February 12, 2015, import logs indicate “AMD C880 Printed Circuit Board Assembly (Video Graphic Card) With Cooler Master Heatsink P/N.102-C88001-00 (FOC)” as coming to port. AMD had these ordered to Canada, likely going to the old ATI HQ in Ontario. We see a record entry for June 8, 2015 (just before launch) for the C880 “with Asetek Heatsink.” Both companies were taken into consideration during the production of the Fury X. Though our limited access to documents does have Cooler Master listed first, the documentation is by no means a complete list of all product imported for pre-production analysis. We are unsure of which supplier truly was “first” to work with AMD on the Fury X, but can surmise with near certainty that Asetek was in the running for the Fury X. It would also be reasonable to assume that Asetek would make its patent holdings known to AMD during these early negotiations. In past endeavors, Asetek supplied AMD its CLC for the 295X2 GPU, so the companies do have a history together.

If Cooler Master replaced Asetek as the OEM for the retail Fury X, it'd likely be because Cooler Master came in at a lower price than its competitor.

Who is Asetek (and a History of its Legal Battles)

Asetek is a closed-loop liquid cooling manufacturer that acts as an OEM for known manufacturers and brands, to include Corsair, NZXT, Scythe, Thermaltake, Intel, and previously AMD. You can read more about which OEMs the “known” manufacturers use in our “Who Really Makes Your Liquid Cooler?” article. You can find an excerpt from that article below, in the form of a table detailing some CLC OEMs:

Table of CLC Suppliers & Existing Coolers

The above chart excludes several products and manufacturers. This is just a look at some of the most prominent offerings.

Asetek has an easily followed legal trail that has developed over the past few years, alongside the company's financial success. Some of the below is pulled directly from our above video's script:

Back in 2003, Asetek Founder and CEO Andrew Eriksen first began documenting the engineering that would become patents 362, 764, and 768. A few years later, Asetek became the first liquid-cooling manufacturer to sell an all-in-one liquid cooling product for PCs, which it named Low Cost Liquid-Cooling, or LCLC. This was the first product of its kind on the enthusiast PC market, shortly seeing direct competition from CoolIT.

Shortly later, in 2006, Asetek applied for international patents at the US Patent and Trademark Office. During this time, both Asetek and competing CLC manufacturer CoolIT gained popularity in the enthusiast and enterprise markets, selling some of the most accessible liquid-cooling products short of assembling an open loop.

2007 sees CoolIT's invention of the Fluid Heat Exchanger that provides a split-flow for liquid cooling devices.

Above: What would eventually become CoolIT patent '330.

In August, 2012, Asetek was granted the patents it requested in 2006, the three patents came to bear numbers 362 and 764; these would catalyze the next three years of legal action. Almost immediately following the receipt of its patents, Asetek filed a lawsuit against CLC OEM CoolIT for alleged infringement on its design. The root of this infringement accusation can be drawn to the pump's orientation atop the coldplate, something Asetek did first. Both companies have a history working with System Integrators like Dell and Alienware, but have also created – and continue to create – Corsair products that face consumers.

On January 31, 2013, Asetek launched a patent infringement case against the significantly larger Cooler Master USA, or CMI USA, who had ventured into CLC territory with all-in-one coolers. Cooler Master's Seidon, Nepton, and later, its Glacer series would become targets of these infringement allegations.

On June 7, 2013, Swiftech received a Cease & Desist letter from Asetek's lawyers. Asetek alleged that the H220 all-in-one liquid-cooler infringed upon patent 362 and patent 764, demanding that Swiftech halt sales and import of its H220 in US markets immediately. Swiftech, on July 19, 2013, complied with this request and pulled its H220 from the market. The company apologized to its US customers for the unavailability of its popular CLC, but continued sale of the H220 in other global markets.

In October of 2013, just months after Swiftech received the C&D, Cooler Master USA announced its Glacer series all-in-one liquid coolers. Under a new name, these coolers were actually introduced as rebadges of the Swiftech H220, supplied to Cooler Master by Swiftech. Our informed speculation is that Cooler Master granted indemnity to Swiftech for the supply of its H220, thus allowing the cooler to be again sold in the US under a new brand and name.

CoolIT issued its own lawsuit retaliating against Asetek in June, 2014, alleging Asetek's guilt of infringing upon a split-flow fluid heat exchanger, a device for which CoolIT had been granted a patent earlier in 2014.

Two months later, in August, 2014, Asetek published an eager press release indicating a – quote – “design win with an undisclosed OEM customer for a graphics liquid cooling product.” This was clearly AMD, as nVidia had no known liquid products at this time – and never officially made any – and became the R9 Fury X.

In September 12, 2014, rumors and leaked photos of initial Radeon faceplates for a future GPU revealed CLC mounting brackets.

Come December of 2014, a jury found Cooler Master guilty on several counts of patent infringement against Asetek. Judge Tigar imposed a 14.5% royalty on Cooler Master's to-date sales of affected CLCs, totaling more than $400,000 in damages. This marks the first major, public victory for Asetek, a company several times smaller than Cooler Master – not to speak little of Asetek's $10 million in quarterly revenue.

Shortly thereafter, Asetek levied a lawsuit against CoolIT, a CLC OEM best-known to gamers for its work with Corsair's H60, H80i, H100i, and H110i GT (the other Corsair CLCs are Asetek-made). Asetek and CoolIT ultimately agreed to settle, with CoolIT paying an undisclosed settlement amount to Asetek. This was in February, 2015. In another GamersNexus exclusive, CoolIT reached-out to our site with the below comment:

"I read your article and thought I'd add some clarity. I wanted to let you know that there will be no disruption in our supply of cooling systems to Corsair or any of our other customers as a result of our settlement with Asetek. In actual fact, it has not been decided if there will even be any damages due to Asetek at all since there is still no indication of infringement. The fact is, the settlement will have no impact on our business at all, aside from our management team no longer having to waste time, energy, and money on this silly lawsuit."

On October 20, 2015, CoolIT had completed its delivery of $1.9 million to Asetek for its part of the settlement.

In April, a California federal judge denied CMI USA's attempt to invalidate Asetek's cooling patents for obviousness.

Moving forward rapidly now, September 23 of 2015 sees another Asetek victory over Cooler Master. Asetek was granted an injunction against CMI USA following CMI's failure to pay on the royalties owed, increasing the royalty fee from 14.5% to 25.375% from January 1 and forward. CMI was also barred from sale of its infringing CLCs in US markets. CMI USA is appealing this decision.

AMD launched its Fury X in June, but was found to be using a Cooler Master CLC for its thermal dissipation. We discuss the engineering of the cooling solution in our Fury X review in more detail, for the curious. No Asetek coolers were found on Fury X cards.

We're caught-up to the last few months, at this point. On December 5, 2015, we at GamersNexus received a direct statement from Asetek that the company had issued Cease & Desist orders to Gigabyte, for its GTX 980 WaterForce card, and AMD, for its R9 Fury X card. Asetek demanded that AMD cease sales of the Fury X immediately, alleging that the Fury X infringes upon the same patents that Cooler Master lost to.

AMD contacted GamersNexus with a statement about the C&D, which we've reproduced on the screen here. The statement reads: “We are aware that Asetek has sued Cooler Master. While we defer to Cooler Master regarding the details of the litigation, we understand that the jury in that case did not find that the Cooler Master heat sink currently used with the Radeon Fury X infringed any of Asetek’s patents.”

Cooler Master's response is the origin of this article, all above.

That brings us to where we are now. As we've done, we'll remain on top of this story for further noteworthy developments.

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- Steve "Lelldorianx" Burke.