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Case 5:05-cv-00334-RMW
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Document 2112
Filed 08/29/2008
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Attorney list on signature page
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IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA – SAN JOSE DIVISION
6 7
RAMBUS, INC.,
8 9 10 11
Plaintiff, v. HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA INC.,
12 13 14
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P.,
15 16
NANYA TECHNOLOGY CORPORATION, NANYA TECHNOLOGY CORPORATION U.S.A.,
Case No. C 05-00334 RMW SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL PENDING RESOLUTION OF THE HYNIX I APPEAL AND THE RE-EXAMINATIONS Hearing Date: Time: Courtroom: Judge:
September 5, 2008 9:00 am Courtroom 6 Hon. Ronald M. Whyte
17 18
Defendants.
19 20
RAMBUS, INC.,
21
Plaintiff,
22
v.
23
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P.,
Case No. C 05-02298 RMW 24 25 26 27 28
Defendants.
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TABLE OF CONTENTS
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Table of Authorities ........................................................................................................................ ii Argument ........................................................................................................................................ 1 I.
6
Rambus’s Patent Infringement Claims Against Samsung Should Be Tried Separately............................................................................................................................ 1
7
A.
Consolidation Is Permitted Only When a Consolidated Trial Would Be Fair and Not Prejudice the Parties .................................................................................. 1
B.
Consolidation Will Prejudice Samsung .................................................................. 2
8 9 1. 10 11
2.
12 3. 13 14 15 16
C. II.
19 20 21
Separate Trials Would Not Unfairly Prejudice Rambus ......................................... 5
The Patent Infringement Claims Against Samsung Should Be Stayed............................... 6 A.
A Stay of Rambus’s Patent Infringement Claims Against Samsung Pending the Hynix I Appeal and the Re-Examinations Would Serve Judicial Economy and Further Efficient Resolution of the Relevant Issues ....................... 6
B.
Proceeding to Trial Prior to Resolution of the Hynix I Appeal and the ReExaminations Would Prejudice Samsung, But a Stay Would Not Irreparably Harm Rambus....................................................................................... 9
17 18
Limiting Instructions Will Not Cure the Unfair Prejudice of Evidence Being Presented That Is Not Admissible Against All the Manufacturers ............................................................................................. 2 A Consolidated Trial Would Confuse the Jury and Prejudice Samsung ...................................................................................................... 3 Rambus Fails to Explain Away the Unfair Prejudice to Samsung from the Combined Presence of the Manufacturers.................................... 5
Conclusion .................................................................................................................................... 10
22 23 24 25 26 27 28
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TABLE OF AUTHORITIES
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
ASCII Corp. v. STD Entm’t USA, Inc., 844 F.Supp. 1378 (N.D. Cal. 1994) .................................................................................... 8 Angelo v. Armstrong World Indus., Inc., 11 F.3d 957 (10th Cir. 1993)............................................................................................... 3 Astec Am., Inc. v. Power-One, Inc., No. 6:07-cv-464, 2008 U.S. Dist. LEXIS 55100 (E.D. Tex. July 15, 2008) ...................... 9 Barr Labs., Inc. v. Abbott Labs, 978 F.2d 98 (3d Cir. 1992).................................................................................................. 5 City of Harper Woods Employees Ret. Sys. v. AXT, Inc., No. C 04-04362 MJJ, 2005 WL 318813 (N.D. Cal. Feb. 7, 2005) ........................................................................ 1 Colt Defense LLC v. Heckler & Koch Defense, Inc., No. 2:04 cv 258, 2004 U.S. Dist. LEXIS 28690 (E.D. Va. Oct. 22, 2004) ........................ 4 In re Cygnus Telecomms. Tech., LLC, Patent, Litig., 385 F.Supp.2d 1022 (N.D. Cal. 2005) ................................................................................ 9 Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983)..................................................................................... 8, 10 Henderson v. Prado, Nos. C-05-0234 VRW, C-05-4220 VRW, 2007 WL 1229330 (N.D. Cal. Apr. 24, 2007) ................................................................................................................................... 1 Ind. State Dist. Council of Laborers and Hod Carriers Pension Fund v. Gecht, Nos. C-06-7274 EMC, C-06-7453 EMC, C-07-0698 EMC, 2007 WL 902554 (N.D. Cal. Mar. 22, 2007) ................................................................................................... 2 Jinro Am. Inc. v. Secure Invs., Inc., 266 F.3d 993 (9th Cir. 2001)............................................................................................... 7 Kos Pharm., Inc. v. Barr Labs., Inc., 218 F.R.D. 387 (S.D.N.Y. 2003) ........................................................................................ 6 Lentek Int’l, Inc. v. Sharper Image Corp., 169 F.Supp.2d 1360 (M.D. Fla. 2001) .............................................................................. 10 L. A. Mem. Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197 (9th Cir. 1980)............................................................................................. 9 Malcolm v. Nat’l Gypsum Co., 995 F.2d 346 (2d Cir. 1993)................................................................................................ 1 MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556 (E.D. Va. 2007).................................................................................... 8 SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
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Quintanilla v. City of Downey, 84 F.3d 353 (9th Cir. 1996)................................................................................................. 3
2 3 4
In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995)............................................................................................... 2 Single Chip Sys. Corp. v. Intermec IP Corp., 495 F.Supp.2d 1052 (S.D. Cal. 2007) ................................................................................. 2
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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ARGUMENT
1 2
Rambus’s patent claims against Samsung must be tried separately under Federal Rule of
3
Civil Procedure 42(b). Rambus fails to show that consolidation would not unfairly prejudice
4
Samsung and lead to likely jury confusion, and any efficiencies identified by Rambus cannot
5
overcome the prejudice to Samsung and permit an aggregated trial.
6
patent infringement claims separately.
The Court should try the
7
The Court should also issue a stay pending resolution of the Hynix I appeal because a stay
8
will further efficiencies and judicial economy in resolving Rambus’s patent infringement claims
9
against Samsung. If the Federal Circuit decides in favor of Hynix on its claim construction or
10
written description challenges, a patent trial would likely be unnecessary; moreover, regardless of
11
the outcome, the Federal Circuit decision will impact subsequent proceedings in this litigation.
12
And a stay pending the inter partes re-examination and ex parte re-examination of Rambus’s
13
patents is warranted because the re-examinations could likewise entirely moot aspects of the
14
case—the office actions have rejected all claims subject to re-examination in seven of the patents-
15
in-suit—and at a minimum, will provide substantial and efficiency-enabling guidance for
16
resolution of issues in the case against Samsung.
17
I.
18 19 20
RAMBUS’S PATENT INFRINGEMENT CLAIMS AGAINST SAMSUNG SHOULD BE TRIED SEPARATELY. A.
Consolidation Is Permitted Only When a Consolidated Trial Would Be Fair and Not Prejudice the Parties.
Rambus wrongly asserts that the “touchstone of the [consolidation] analysis is efficiency.”
21
Opp. 4.
22
Malcolm v. Nat’l Gypsum Co., 995 F.2d 346, 350 (2d Cir. 1993) (“The benefits of efficiency can
23
never be purchased at the cost of fairness.”). This Court has explained that “[c]onsiderations of
24
convenience and economy must yield to a paramount concern for a fair and impartial trial.”
25
Henderson v. Prado, Nos. C-05-0234 VRW, C-05-4220 VRW 2007 WL 1229330, at *1 (N.D.
26
Cal. Apr. 24, 2007) (quotation marks and citation omitted); see also City of Harper Woods
27
Employees Ret. Sys. v. AXT, Inc., No. C 04-04362 MJJ, 2005 WL 318813, at *1 (N.D. Cal.
28
In fact, the overriding determinant is achieving a fair and impartial trial. See, e.g.,
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Feb. 7, 2005) (“a court cannot permit the benefits of convenience and judicial economy to
2
outweigh the concern for a fair and impartial trial.”).
3
Rambus erroneously claims that the manufacturers have the burden to prove that the cases
4
should be tried separately, citing cases involving motions to bifurcate and cases with multiple
5
parties, not decisions in which only discovery for distinct cases has been consolidated, e.g., Opp.
6
4, 13 (citing In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1302-03 (7th Cir. 1995)
7
(bifurcation), and suggests that Samsung thus has a higher threshold for demonstrating the
8
prejudice represented by consolidation.
9
will not prejudice Samsung before consolidation may be ordered. See, e.g., Single Chip Sys.
10
Corp. v. Intermec IP Corp., 495 F.Supp.2d 1052, 1057 (S.D. Cal. 2007) (movant bears “burden of
11
establishing that the judicial economy and convenience benefits of consolidation outweigh any
12
prejudice”); Ind. State Dist. Council of Laborers and Hod Carriers Pension Fund v. Gecht, Nos.
13
C-06-7274 EMC, C-06-7453 EMC, C-07-0698 EMC, 2007 WL 902554, at *1 (N.D. Cal.
14
Mar. 22, 2007) (noting same).
15
no relevance if Rambus fails to show that consolidation for a patent infringement trial would not
16
prejudice the manufacturers. Rambus has failed to do so.
In fact, Rambus must demonstrate that consolidation
Rambus’s focus on purportedly common issues, Opp. 5-12, is of
17
B.
18
Consolidating Rambus’s patent infringement claims for trial would substantially prejudice
19 20 21
Consolidation Will Prejudice Samsung.
Samsung. 1.
Limiting Instructions Will Not Cure the Unfair Prejudice of Evidence Being Presented That Is Not Admissible Against All the Manufacturers.
22 Rambus counters Samsung’s assertion of prejudice resulting from the presentation of 23 evidence that is admissible and pertains to one manufacturer, but not as to Samsung, by 24 suggesting that any prejudice can be cured by a limiting instruction, and also, that the evidence is 25 in fact admissible against all the manufacturers.
Opp. 18, 21.
The matter of admissibility
26 would be resolved in a different procedural setting, but even assuming that, for instance, the 27 Hynix verdict is admissible against Samsung with regard to willfulness, Opp. 17, the efficacy of 28
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any instruction limiting the jury’s consideration of that evidence to willfulness and disallowing
2
consideration in relation to infringement or validity would be diminished by the complicated
3
context of multiple defendants and the significantly varied and wide-ranging products.
4
likelihood is that the jury would be unable to maintain the limits on the consideration of such
5
evidence.
6
consideration to certain manufacturers stand a great chance of being dismissed given the complex
7
matters being presented to the jury in the context of four different manufacturers and their
8
products. A jury cannot be realistically expected to compartmentalize such a multiplicity of
9
evidence and consider it only in a limited manner, despite instructions.
10
The
And the further likelihood is that instructions limiting certain evidence’s
Separate trials are needed to avoid the possibility that evidence admissible only on a
11
certain issue may prejudice Samsung on other issues.
12
84 F.3d 353, 356 (9th Cir. 1996) (ordering separate trials because evidence admissible against
13
only one defendant was potentially prejudicial to another defendant and confusing to the jury);
14
Angelo v. Armstrong World Indus., Inc., 11 F.3d 957, 965 (10th Cir. 1993) (ordering separate
15
initial trial of certain claims to avoid introduction of evidence that would be prejudicial to those
16
claims but necessary for the other claims).
17
2.
18
See, e.g., Quintanilla v. City of Downey,
A Consolidated Trial Would Confuse the Jury and Prejudice Samsung.
19
Rambus erroneously contends that despite the large number of accused products and the
20
substantial number of asserted patent claims, scattered among four different manufacturers, “the
21
common features” of the accused products will prevent prejudicial jury confusion on the issue of
22
infringement.
23
extremely difficult and confusing to maintain distinctions between the manufacturers’ products,
24
track which claims each product allegedly infringes, and be clear which features are at issue.
25
Consolidation would unnecessarily create the prejudicial risk that the jury will consider evidence
26
of alleged infringement by one manufacturer’s product in relation to another manufacturer’s
27
entirely different product.
28
Opp. 12; see also Opp. 14 n.4. The reality, however, is that a jury will find it
The inclusion of these myriad products in a consolidated trial would
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be unduly prejudicial to Samsung. See, e.g., Colt Defense LLC v. Heckler & Koch Defense, Inc.,
2
No. 2:04 cv 258, 2004 U.S. Dist. LEXIS 28690, at *15 (E.D. Va. Oct. 22, 2004) (severing
3
trademark infringement claims against two unrelated defendants when the same trademarks were
4
at issue and different products alleged to have infringed because the court “perceive[d] a risk of
5
prejudice to the defendants . . . [and] the possibility of jury confusion over the evidence required
6
to prove these claims.”)
7
Separate trials are also warranted because the variety of historical factors in relation to
8
each manufacturer make prejudicial jury confusion on the issue of damages inevitable.
9
concedes that the timing of the hypothetical license negotiation for Samsung is, in its view, at a
10
four-year variance from the other manufacturers, Opp. at 14, and this significant fact can easily be
11
overlooked by a jury, to Samsung’s great detriment, in considering damages evidence in relation
12
to the four different manufacturers. The likelihood of confusion in possibly assessing damages
13
is exacerbated by the variations in the accused products among the manufacturers.
14
incorrectly contends the fact that “features” may be formally accused eliminates the confusion
15
generated by the variations in the accused products and among the manufacturers. Opp. 14 n.4.
16
That fact, however, will not diminish the confusing effect of the variations among the accused
17
products, the differences between the originating manufacturers, the distinct generations of
18
products are at issue, and Samsung’s unique licensing relationship with Rambus.
19
facts will compound prejudicial jury confusion.
Rambus
Rambus
All of these
20
Further, Rambus fails to deny the significant effect of the potential jury confusion that will
21
be caused by the evidence of Samsung’s most favored licensee provisions, particularly in the
22
context of four different manufacturers, which will be used to demonstrate how the hypothetical
23
negotiation would be resolved. See, e.g., Order Denying Rambus’s Mot. for Summ. J. on
24
Samsung’s Counterclaims I, II, and III (July 9, 2008), at 2-4, 7-8 (noting that “the MFL in Section
25
3.8 is difficult to interpret”); Samsung’s Opp. to Rambus’s Mot. for Summ. J. on Counts I-III of
26
Samsung’s Counterclaims (June 9, 2008), at 12-14, 18-24 (reviewing most favored licensee
27
provision and renewal provisions).
28
Indeed, in the context of three manufacturers who lack a
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license and will not be presenting evidence and argument regarding the effect of license
2
provisions, it is very possible that the jury will ignore the confusing impact of that complicated
3
evidence in considering damages evidence. Moreover, jury confusion that develops from the
4
consideration of the Samsung and Rambus’s licensing relationship and license rights evidence
5
could adversely impact Samsung in relation to willfulness.
6
Given the complex nature of the case and the many products at issue for each
7
manufacturer, it would be unnecessarily difficult for the jury to appropriately apply the various
8
economic, market, historical, and licensing factors for the hypothetical license negotiations of
9
each manufacturer. See, e.g., Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 115 (3d Cir. 1992)
10
(separate trial of the issue of relevant product market enhanced juror comprehension of complex
11
issue).
The risk of prejudice to Samsung is too great to permit consolidation.
12
3.
13
Rambus Fails to Explain Away the Unfair Prejudice to Samsung from the Combined Presence of the Manufacturers.
14
Rambus misses the point in responding to Samsung’s complaint that being required to
15
defend its case together with all four manufacturers detrimentally permits Rambus to create the
16
perception of the manufacturers as a collective Goliath. Rambus suggests that the manufacturers
17
can argue the evidence on this topic, Opp. 23, but Samsung’s contention is not an evidence-based
18
concern about prejudice.
19
manufacturers and Rambus’s ability to exploit the size of the manufacturers and their combined
20
presence while presenting itself as a small victim. Samsung should not be prejudiced with the
21
exaggerated, damaging appearances that result from consolidation.
22
manufacturers in this case supports a false and prejudicial appearance of a “bullied” Rambus.
23
Separate trials would avoid distortion of the jury’s relative perception of the parties.
Instead, the prejudice results from the forced group presence of the
Aggregating the
24
C.
25
Rambus asserts without support that separate trials would be unfairly prejudicial, but the
Separate Trials Would Not Unfairly Prejudice Rambus.
26
only real harm it identifies is additional litigation costs. Opp. 15.
27
constitute the type of unfair prejudice to a party’s right to a fair trial that is recognized by Rule
28
SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
That alleged harm does not
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42.
2
Kos Pharm., Inc. v. Barr Labs., Inc., 218 F.R.D. 387, 393 (S.D.N.Y. 2003)).
3
suggests that separate trials could produce inconsistent results that could be used against Rambus,
4
but any possible inconsistencies would derive from the very differences that the manufacturers
5
have identified in their opposition to consolidation.
6
could justify consolidation.
7
II.
Indeed, Rambus cites only an inapposite bifurcation case to justify its assertion. Id. (citing Rambus also
Rambus fails to identify any prejudice that
THE PATENT INFRINGEMENT CLAIMS AGAINST SAMSUNG SHOULD BE STAYED.
8
A stay of the proceedings against Samsung pending resolution of the expected appeal of
9
Hynix I and the re-examinations would promote judicial and litigant economy, simplify and
10
clarify the issues, avoid the hardship to Samsung represented by trial of patent infringement
11
claims before the Federal Circuit resolves many of the relevant issues and the PTO can complete
12
the re-examinations, and leave Rambus unharmed in any cognizable way.
13
A.
14 15
A Stay of Rambus’s Patent Infringement Claims Against Samsung Pending the Hynix I Appeal and the Re-Examinations Would Serve Judicial Economy and Further Efficient Resolution of the Relevant Issues.
16
Rambus opposes a stay pending the Hynix appeal primarily based on the contention that
17
since this Court rejected Hynix’s arguments, a stay would simply enable a “rehash[ing]” of the
18
arguments.
19
regular business of the Federal Circuit and a judgment winner’s self-serving assertions that
20
nothing will be gained by an appeal cannot legitimately demonstrate that the appeal does not offer
21
significant benefits and efficiencies for other litigation.
Opp. 31.
Certainly, consideration of challenges to trial-court judgments is the
22
Rambus does not deny the substantial overlap in the issues of this litigation and Hynix I.
23
The issuance of a stay pending the Federal Circuit’s decision in the Hynix I appeal could greatly
24
simplify the issues in this litigation and even potentially eliminate the need for a patent trial.
25
Issues presented in the Hynix I appeal may lead the Federal Circuit to revisit its claim
26
construction in Infineon and reverse this Court’s claim construction rulings.
27
were resolved in Rambus’s favor, the Federal Circuit’s rulings on claim construction, written
28
SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
Even if the appeal
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description, and obviousness would certainly influence proceedings and arguments in this
2
litigation. The decision in Hynix I will clearly simplify the issues before the Court and the jury,
3
further judicial economy, and avoid unnecessarily duplicative litigation. See, e.g., Jinro Am.
4
Inc. v. Secure Invs., Inc., 266 F.3d 993, 998 (9th Cir. 2001) (explaining that separate trials would
5
permit resolution of potentially dispositive issues and defer costly and possibly unnecessary
6
proceedings).
7
A stay pending the re-examinations would likewise economize judicial resources and
8
make decision-making more efficient by giving the Court the benefit of the PTO’s guidance and
9
potentially narrowing the issues for trial.
Rambus attempts to avoid the obvious efficiencies
10
represented by the resolution of the re-examinations with the bald and unsubstantiated assertion
11
that a stay could “introduce inefficiency and needlessly complicate issues, proof and questions of
12
law,” Opp. at 36, and by hypothesizing a “potentially long delay” with the PTO, Opp. at 35. In
13
fact, the re-examinations have proceeded to an advanced stage and it is likely that all or at least
14
some of the pending claims will not survive the re-examination process, or at least in their present
15
form, a fact that Rambus leaves wholly unaddressed. As Samsung explained in its motion,
16
detailed office action had been received rejecting all claims of five of the patents-in-suit; other re-
17
examination proceedings have found substantial new questions of patentability. See Samsung’s
18
Mot. at 13 (citing Decl. of Melanie Sarwal in Supp. of Samsung’s Mot. for Separate Patent Trials
19
and to Stay the Patent Trial Pending Resolution of the Hynix I Appeal and the Re-Examination,
20
and Mem. in Supp., Ex. 8 [office action on the ‘020 patent] (rejecting all claims); Sarwal Decl.,
21
Ex. 9 [office action on the ‘120 patent] (rejecting all claims); Sarwal Decl., Ex. 10 [office action
22
on the ‘863 patent (rejecting all claims); Sarwal Decl., Ex. 11 [office action on the ‘184 patent
23
(rejecting all claims); Sarwal Decl., Ex. 12 [office action on the ‘916 patent (rejecting all claims)).
24
And now two additional office actions have issued.
25
Office Actions in the re-examination proceedings for U.S. Patent No. 6,697,295 (“‘295 patent”)
26
and U.S. Patent No. 6,038,195 (“‘195 patent”) (ex parte reexamination), and rejected all claims
27
requested for re-examination, including those claims asserted by Rambus. See Decl. of Melanie
28
SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
On August 25, 2008, the PTO issued its first
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Sarwal in Supp. of Samsung’s Reply, Ex. A [office action on the ‘295 patent] (rejecting all
2
claims); Sarwal Decl., Ex. B [office action on the ‘195 patent] (rejecting all claims).
3
to a patent infringement trial when multiple PTO actions suggest that the claims will not likely
4
survive at all, especially in their current form and scope, would be undeniably inefficient and
5
unfair. See, e.g., MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556, 563 (E.D. Va. 2007)
6
(explaining that a stay pending re-examination permits a district court to “avoid inconsistent
7
results, narrow the issues, obtain guidance from the PTO, or . . . avoid the needless waste of
8
judicial resources, especially if the evidence suggests that the patents-in-suit will not survive
9
reexamination.”)
10
Proceeding
(citing, inter alia, Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed.
Cir. 1983)).
11
Any delay represented by completion of the re-examination proceedings, Rambus’s other
12
primary objection to a stay, has been routinely rejected as a reason to deny a stay. Indeed, this
13
Court has recognized the “liberal policy in favor of granting motions to stay proceedings pending
14
the outcome of USPTO reexamination or reissuance proceedings.” ASCII Corp. v. STD Entm’t
15
USA, Inc., 844 F.Supp. 1378, 1381 (N.D. Cal. 1994); see also MercExchange, 500 F.Supp.2d at
16
563-64 (“[a] review of relevant caselaw indicates that district courts routinely grant pre-trial stays
17
when PTO reexaminations are underway and evidence suggests that the patents-in-suit may not
18
survive reexamination.”) (citing cases).
19
proceedings suffer from any unusual delays. Indeed, only one pending re-examination has not
20
received an office action. And since the newest office actions track the five earlier office
21
actions, it is reasonable to anticipate that the remaining pending re-examination will likely also
22
reject the claims on the same basis.
Moreover, Rambus does not suggest that these
23
A stay until the resolution of the anticipated Hynix I appeal and the multiple pending inter
24
partes and ex parte re-examination requests would conserve the resources that the Court and the
25
parties will expend—potentially needlessly—in litigating and resolving substantial issues
26
regarding alleged patent infringement and the various defenses to those claims.
27 28
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B.
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Proceeding to Trial Prior to Resolution of the Hynix I Appeal and the Re-Examinations Would Prejudice Samsung, But a Stay Would Not Irreparably Harm Rambus.
3
Rambus erroneously contends that a stay would cause it irreparable harm by possibly
4
causing reputational injury and having indirect negative financial effects on the company.
Opp.
5
at 29-30. These types of indefinite and ancillary harms, however, do not constitute the type of
6
irreparable harm that can preclude a stay of litigation.
7
Rambus—delay of a potential money damages award—does not constitute a recognizable
8
irreparable harm in the stay equation. See, e.g., L. A. Mem. Coliseum Comm’n v. Nat’l Football
9
League, 634 F.2d 1197, 1202 (9th Cir. 1980). Moreover, a stay pending the re-examinations
10
does not represent any “clear tactical disadvantage” to Rambus that could be regarded as
11
prejudicial.
12
1023 (N.D. Cal. 2005). The delay involved in postponing trial proceedings until the conclusion
13
of the re-examination process is acceptable and “not unduly prejudicial in light of the clarity
14
reexamination of the patents-in-suit may bring to the litigation.” Id. at 1024. And the time
15
required for the Hynix appeal, likely about a year—not “many years” as asserted by Rambus,
16
Opp. at 29—is certainly a reasonable amount of time to wait when the benefits and efficiencies
17
represented by a Federal Circuit decision are considered. Rambus’s fear that Hynix may seek a
18
further stay later in time depending on how events unfold is irrelevant to the Court’s decision to
19
grant this stay. Opp. at 29-30. Certainly the Court has the discretion to fashion this stay as it
20
sees fit and to grant or deny any future stay request; no indefinite stay is sought.
Even the more direct harm alleged by
In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.Supp.2d 1022,
21
Rambus misrepresents Samsung’s asserted harm, suggesting that Samsung has identified
22
merely having to defend the lawsuits as the prejudice warranting a stay. Opp. 30. In fact,
23
Samsung’s hardship is the investment in preparing for and litigating a patent trial before the
24
Federal Circuit decides dispositive issues in the case and the re-examinations resolve what claims
25
are even at issue.
26
being considered in an appeal, the absence of a stay threatens irreparable harm. See, e.g., Astec
27
Am., Inc. v. Power-One, Inc., No. 6:07-cv-464, 2008 U.S. Dist. LEXIS 55100, at *6, *13 (E.D.
28
Indeed, courts have recognized that when disputed patent claim terms are
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1
Tex. July 15, 2008) (granting stay based on appeal in earlier case challenging claim construction
2
and other rulings on same patents when the movant argued that “a stay would ensure the parties
3
avoid the unnecessary risks of proceeding through discovery and trial only to have these rulings
4
altered by the Federal Circuit, thereby potentially forcing the parties to start over in both cases”).
5
And the denial of a stay pending re-examination imposes the irreparable harm of defending
6
against patent infringement claims without the benefit of the resolution provided by the re-
7
examination proceedings. See Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir.
8
1983) (“One purpose of the reexamination procedure is to eliminate trial of that issue (when the
9
claim is canceled) or to facilitate trial of that issue by providing the district court with the expert
10
view of the PTO (when a claim survives the reexamination proceeding).”) (emphasis added); see
11
also Lentek Int’l, Inc. v. Sharper Image Corp., 169 F.Supp.2d 1360, 1362 (M.D. Fla. 2001) (“As
12
several courts [including the Federal Circuit] have noted, the sponsors of the patent reexamination
13
legislation clearly favored the liberal grant of stays by the district courts when patents are
14
submitted for reexamination as a mechanism for settling disputes quickly and less expensively
15
and for providing the district courts with the expertise of the patent office.”) (emphasis added).
16 17 18 19 20
A balancing of the parties’ relative hardships supports the granting of a stay. CONCLUSION For these reasons and those presented in Samsung’s motion, the Court should (1) try Rambus’s patent infringement claims against Samsung in a separate trial; and (2) stay the patent trial until the resolution of the Hynix I appeal and the re-examinations.
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Dated:
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August 29, 2008 WEIL, GOTSHAL & MANGES, LLP
3 4 5
By: _/s/ David J. Healey David J. Healey
6 7 8 9 10 11 12 13 14 15 16 17 18 19
MATTHEW D. POWERS (Bar No. 104795) Email: [email protected] EDWARD R. REINES (Bar No. 135930) Email: [email protected] WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 Telephone: (650) 802-3000 Facsimile: (650) 802-3100 DAVID J. HEALEY (admitted pro hac vice) Email: [email protected] ANITA E. KADALA (admitted pro hac vice) Email: [email protected] WEIL, GOTSHAL & MANGES LLP 700 Louisiana, Suite 1600 Houston, TX 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 Attorneys for Defendants SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., and SAMSUNG AUSTIN SEMICONDUCTOR, L.P.
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1
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Attorney list on signature page
2 3 4 5
IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA – SAN JOSE DIVISION
6 7
RAMBUS, INC.,
8 9 10 11
Plaintiff, v. HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA INC.,
12 13 14
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P.,
15 16
NANYA TECHNOLOGY CORPORATION, NANYA TECHNOLOGY CORPORATION U.S.A.,
Case No. C 05-00334 RMW SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL PENDING RESOLUTION OF THE HYNIX I APPEAL AND THE RE-EXAMINATIONS Hearing Date: Time: Courtroom: Judge:
September 5, 2008 9:00 am Courtroom 6 Hon. Ronald M. Whyte
17 18
Defendants.
19 20
RAMBUS, INC.,
21
Plaintiff,
22
v.
23
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P.,
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Defendants.
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TABLE OF CONTENTS
1 2 3 4 5
Table of Authorities ........................................................................................................................ ii Argument ........................................................................................................................................ 1 I.
6
Rambus’s Patent Infringement Claims Against Samsung Should Be Tried Separately............................................................................................................................ 1
7
A.
Consolidation Is Permitted Only When a Consolidated Trial Would Be Fair and Not Prejudice the Parties .................................................................................. 1
B.
Consolidation Will Prejudice Samsung .................................................................. 2
8 9 1. 10 11
2.
12 3. 13 14 15 16
C. II.
19 20 21
Separate Trials Would Not Unfairly Prejudice Rambus ......................................... 5
The Patent Infringement Claims Against Samsung Should Be Stayed............................... 6 A.
A Stay of Rambus’s Patent Infringement Claims Against Samsung Pending the Hynix I Appeal and the Re-Examinations Would Serve Judicial Economy and Further Efficient Resolution of the Relevant Issues ....................... 6
B.
Proceeding to Trial Prior to Resolution of the Hynix I Appeal and the ReExaminations Would Prejudice Samsung, But a Stay Would Not Irreparably Harm Rambus....................................................................................... 9
17 18
Limiting Instructions Will Not Cure the Unfair Prejudice of Evidence Being Presented That Is Not Admissible Against All the Manufacturers ............................................................................................. 2 A Consolidated Trial Would Confuse the Jury and Prejudice Samsung ...................................................................................................... 3 Rambus Fails to Explain Away the Unfair Prejudice to Samsung from the Combined Presence of the Manufacturers.................................... 5
Conclusion .................................................................................................................................... 10
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TABLE OF AUTHORITIES
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
ASCII Corp. v. STD Entm’t USA, Inc., 844 F.Supp. 1378 (N.D. Cal. 1994) .................................................................................... 8 Angelo v. Armstrong World Indus., Inc., 11 F.3d 957 (10th Cir. 1993)............................................................................................... 3 Astec Am., Inc. v. Power-One, Inc., No. 6:07-cv-464, 2008 U.S. Dist. LEXIS 55100 (E.D. Tex. July 15, 2008) ...................... 9 Barr Labs., Inc. v. Abbott Labs, 978 F.2d 98 (3d Cir. 1992).................................................................................................. 5 City of Harper Woods Employees Ret. Sys. v. AXT, Inc., No. C 04-04362 MJJ, 2005 WL 318813 (N.D. Cal. Feb. 7, 2005) ........................................................................ 1 Colt Defense LLC v. Heckler & Koch Defense, Inc., No. 2:04 cv 258, 2004 U.S. Dist. LEXIS 28690 (E.D. Va. Oct. 22, 2004) ........................ 4 In re Cygnus Telecomms. Tech., LLC, Patent, Litig., 385 F.Supp.2d 1022 (N.D. Cal. 2005) ................................................................................ 9 Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983)..................................................................................... 8, 10 Henderson v. Prado, Nos. C-05-0234 VRW, C-05-4220 VRW, 2007 WL 1229330 (N.D. Cal. Apr. 24, 2007) ................................................................................................................................... 1 Ind. State Dist. Council of Laborers and Hod Carriers Pension Fund v. Gecht, Nos. C-06-7274 EMC, C-06-7453 EMC, C-07-0698 EMC, 2007 WL 902554 (N.D. Cal. Mar. 22, 2007) ................................................................................................... 2 Jinro Am. Inc. v. Secure Invs., Inc., 266 F.3d 993 (9th Cir. 2001)............................................................................................... 7 Kos Pharm., Inc. v. Barr Labs., Inc., 218 F.R.D. 387 (S.D.N.Y. 2003) ........................................................................................ 6 Lentek Int’l, Inc. v. Sharper Image Corp., 169 F.Supp.2d 1360 (M.D. Fla. 2001) .............................................................................. 10 L. A. Mem. Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197 (9th Cir. 1980)............................................................................................. 9 Malcolm v. Nat’l Gypsum Co., 995 F.2d 346 (2d Cir. 1993)................................................................................................ 1 MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556 (E.D. Va. 2007).................................................................................... 8 SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
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Quintanilla v. City of Downey, 84 F.3d 353 (9th Cir. 1996)................................................................................................. 3
2 3 4
In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995)............................................................................................... 2 Single Chip Sys. Corp. v. Intermec IP Corp., 495 F.Supp.2d 1052 (S.D. Cal. 2007) ................................................................................. 2
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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ARGUMENT
1 2
Rambus’s patent claims against Samsung must be tried separately under Federal Rule of
3
Civil Procedure 42(b). Rambus fails to show that consolidation would not unfairly prejudice
4
Samsung and lead to likely jury confusion, and any efficiencies identified by Rambus cannot
5
overcome the prejudice to Samsung and permit an aggregated trial.
6
patent infringement claims separately.
The Court should try the
7
The Court should also issue a stay pending resolution of the Hynix I appeal because a stay
8
will further efficiencies and judicial economy in resolving Rambus’s patent infringement claims
9
against Samsung. If the Federal Circuit decides in favor of Hynix on its claim construction or
10
written description challenges, a patent trial would likely be unnecessary; moreover, regardless of
11
the outcome, the Federal Circuit decision will impact subsequent proceedings in this litigation.
12
And a stay pending the inter partes re-examination and ex parte re-examination of Rambus’s
13
patents is warranted because the re-examinations could likewise entirely moot aspects of the
14
case—the office actions have rejected all claims subject to re-examination in seven of the patents-
15
in-suit—and at a minimum, will provide substantial and efficiency-enabling guidance for
16
resolution of issues in the case against Samsung.
17
I.
18 19 20
RAMBUS’S PATENT INFRINGEMENT CLAIMS AGAINST SAMSUNG SHOULD BE TRIED SEPARATELY. A.
Consolidation Is Permitted Only When a Consolidated Trial Would Be Fair and Not Prejudice the Parties.
Rambus wrongly asserts that the “touchstone of the [consolidation] analysis is efficiency.”
21
Opp. 4.
22
Malcolm v. Nat’l Gypsum Co., 995 F.2d 346, 350 (2d Cir. 1993) (“The benefits of efficiency can
23
never be purchased at the cost of fairness.”). This Court has explained that “[c]onsiderations of
24
convenience and economy must yield to a paramount concern for a fair and impartial trial.”
25
Henderson v. Prado, Nos. C-05-0234 VRW, C-05-4220 VRW 2007 WL 1229330, at *1 (N.D.
26
Cal. Apr. 24, 2007) (quotation marks and citation omitted); see also City of Harper Woods
27
Employees Ret. Sys. v. AXT, Inc., No. C 04-04362 MJJ, 2005 WL 318813, at *1 (N.D. Cal.
28
In fact, the overriding determinant is achieving a fair and impartial trial. See, e.g.,
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Feb. 7, 2005) (“a court cannot permit the benefits of convenience and judicial economy to
2
outweigh the concern for a fair and impartial trial.”).
3
Rambus erroneously claims that the manufacturers have the burden to prove that the cases
4
should be tried separately, citing cases involving motions to bifurcate and cases with multiple
5
parties, not decisions in which only discovery for distinct cases has been consolidated, e.g., Opp.
6
4, 13 (citing In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1302-03 (7th Cir. 1995)
7
(bifurcation), and suggests that Samsung thus has a higher threshold for demonstrating the
8
prejudice represented by consolidation.
9
will not prejudice Samsung before consolidation may be ordered. See, e.g., Single Chip Sys.
10
Corp. v. Intermec IP Corp., 495 F.Supp.2d 1052, 1057 (S.D. Cal. 2007) (movant bears “burden of
11
establishing that the judicial economy and convenience benefits of consolidation outweigh any
12
prejudice”); Ind. State Dist. Council of Laborers and Hod Carriers Pension Fund v. Gecht, Nos.
13
C-06-7274 EMC, C-06-7453 EMC, C-07-0698 EMC, 2007 WL 902554, at *1 (N.D. Cal.
14
Mar. 22, 2007) (noting same).
15
no relevance if Rambus fails to show that consolidation for a patent infringement trial would not
16
prejudice the manufacturers. Rambus has failed to do so.
In fact, Rambus must demonstrate that consolidation
Rambus’s focus on purportedly common issues, Opp. 5-12, is of
17
B.
18
Consolidating Rambus’s patent infringement claims for trial would substantially prejudice
19 20 21
Consolidation Will Prejudice Samsung.
Samsung. 1.
Limiting Instructions Will Not Cure the Unfair Prejudice of Evidence Being Presented That Is Not Admissible Against All the Manufacturers.
22 Rambus counters Samsung’s assertion of prejudice resulting from the presentation of 23 evidence that is admissible and pertains to one manufacturer, but not as to Samsung, by 24 suggesting that any prejudice can be cured by a limiting instruction, and also, that the evidence is 25 in fact admissible against all the manufacturers.
Opp. 18, 21.
The matter of admissibility
26 would be resolved in a different procedural setting, but even assuming that, for instance, the 27 Hynix verdict is admissible against Samsung with regard to willfulness, Opp. 17, the efficacy of 28
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any instruction limiting the jury’s consideration of that evidence to willfulness and disallowing
2
consideration in relation to infringement or validity would be diminished by the complicated
3
context of multiple defendants and the significantly varied and wide-ranging products.
4
likelihood is that the jury would be unable to maintain the limits on the consideration of such
5
evidence.
6
consideration to certain manufacturers stand a great chance of being dismissed given the complex
7
matters being presented to the jury in the context of four different manufacturers and their
8
products. A jury cannot be realistically expected to compartmentalize such a multiplicity of
9
evidence and consider it only in a limited manner, despite instructions.
10
The
And the further likelihood is that instructions limiting certain evidence’s
Separate trials are needed to avoid the possibility that evidence admissible only on a
11
certain issue may prejudice Samsung on other issues.
12
84 F.3d 353, 356 (9th Cir. 1996) (ordering separate trials because evidence admissible against
13
only one defendant was potentially prejudicial to another defendant and confusing to the jury);
14
Angelo v. Armstrong World Indus., Inc., 11 F.3d 957, 965 (10th Cir. 1993) (ordering separate
15
initial trial of certain claims to avoid introduction of evidence that would be prejudicial to those
16
claims but necessary for the other claims).
17
2.
18
See, e.g., Quintanilla v. City of Downey,
A Consolidated Trial Would Confuse the Jury and Prejudice Samsung.
19
Rambus erroneously contends that despite the large number of accused products and the
20
substantial number of asserted patent claims, scattered among four different manufacturers, “the
21
common features” of the accused products will prevent prejudicial jury confusion on the issue of
22
infringement.
23
extremely difficult and confusing to maintain distinctions between the manufacturers’ products,
24
track which claims each product allegedly infringes, and be clear which features are at issue.
25
Consolidation would unnecessarily create the prejudicial risk that the jury will consider evidence
26
of alleged infringement by one manufacturer’s product in relation to another manufacturer’s
27
entirely different product.
28
Opp. 12; see also Opp. 14 n.4. The reality, however, is that a jury will find it
The inclusion of these myriad products in a consolidated trial would
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be unduly prejudicial to Samsung. See, e.g., Colt Defense LLC v. Heckler & Koch Defense, Inc.,
2
No. 2:04 cv 258, 2004 U.S. Dist. LEXIS 28690, at *15 (E.D. Va. Oct. 22, 2004) (severing
3
trademark infringement claims against two unrelated defendants when the same trademarks were
4
at issue and different products alleged to have infringed because the court “perceive[d] a risk of
5
prejudice to the defendants . . . [and] the possibility of jury confusion over the evidence required
6
to prove these claims.”)
7
Separate trials are also warranted because the variety of historical factors in relation to
8
each manufacturer make prejudicial jury confusion on the issue of damages inevitable.
9
concedes that the timing of the hypothetical license negotiation for Samsung is, in its view, at a
10
four-year variance from the other manufacturers, Opp. at 14, and this significant fact can easily be
11
overlooked by a jury, to Samsung’s great detriment, in considering damages evidence in relation
12
to the four different manufacturers. The likelihood of confusion in possibly assessing damages
13
is exacerbated by the variations in the accused products among the manufacturers.
14
incorrectly contends the fact that “features” may be formally accused eliminates the confusion
15
generated by the variations in the accused products and among the manufacturers. Opp. 14 n.4.
16
That fact, however, will not diminish the confusing effect of the variations among the accused
17
products, the differences between the originating manufacturers, the distinct generations of
18
products are at issue, and Samsung’s unique licensing relationship with Rambus.
19
facts will compound prejudicial jury confusion.
Rambus
Rambus
All of these
20
Further, Rambus fails to deny the significant effect of the potential jury confusion that will
21
be caused by the evidence of Samsung’s most favored licensee provisions, particularly in the
22
context of four different manufacturers, which will be used to demonstrate how the hypothetical
23
negotiation would be resolved. See, e.g., Order Denying Rambus’s Mot. for Summ. J. on
24
Samsung’s Counterclaims I, II, and III (July 9, 2008), at 2-4, 7-8 (noting that “the MFL in Section
25
3.8 is difficult to interpret”); Samsung’s Opp. to Rambus’s Mot. for Summ. J. on Counts I-III of
26
Samsung’s Counterclaims (June 9, 2008), at 12-14, 18-24 (reviewing most favored licensee
27
provision and renewal provisions).
28
Indeed, in the context of three manufacturers who lack a
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license and will not be presenting evidence and argument regarding the effect of license
2
provisions, it is very possible that the jury will ignore the confusing impact of that complicated
3
evidence in considering damages evidence. Moreover, jury confusion that develops from the
4
consideration of the Samsung and Rambus’s licensing relationship and license rights evidence
5
could adversely impact Samsung in relation to willfulness.
6
Given the complex nature of the case and the many products at issue for each
7
manufacturer, it would be unnecessarily difficult for the jury to appropriately apply the various
8
economic, market, historical, and licensing factors for the hypothetical license negotiations of
9
each manufacturer. See, e.g., Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 115 (3d Cir. 1992)
10
(separate trial of the issue of relevant product market enhanced juror comprehension of complex
11
issue).
The risk of prejudice to Samsung is too great to permit consolidation.
12
3.
13
Rambus Fails to Explain Away the Unfair Prejudice to Samsung from the Combined Presence of the Manufacturers.
14
Rambus misses the point in responding to Samsung’s complaint that being required to
15
defend its case together with all four manufacturers detrimentally permits Rambus to create the
16
perception of the manufacturers as a collective Goliath. Rambus suggests that the manufacturers
17
can argue the evidence on this topic, Opp. 23, but Samsung’s contention is not an evidence-based
18
concern about prejudice.
19
manufacturers and Rambus’s ability to exploit the size of the manufacturers and their combined
20
presence while presenting itself as a small victim. Samsung should not be prejudiced with the
21
exaggerated, damaging appearances that result from consolidation.
22
manufacturers in this case supports a false and prejudicial appearance of a “bullied” Rambus.
23
Separate trials would avoid distortion of the jury’s relative perception of the parties.
Instead, the prejudice results from the forced group presence of the
Aggregating the
24
C.
25
Rambus asserts without support that separate trials would be unfairly prejudicial, but the
Separate Trials Would Not Unfairly Prejudice Rambus.
26
only real harm it identifies is additional litigation costs. Opp. 15.
27
constitute the type of unfair prejudice to a party’s right to a fair trial that is recognized by Rule
28
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42.
2
Kos Pharm., Inc. v. Barr Labs., Inc., 218 F.R.D. 387, 393 (S.D.N.Y. 2003)).
3
suggests that separate trials could produce inconsistent results that could be used against Rambus,
4
but any possible inconsistencies would derive from the very differences that the manufacturers
5
have identified in their opposition to consolidation.
6
could justify consolidation.
7
II.
Indeed, Rambus cites only an inapposite bifurcation case to justify its assertion. Id. (citing Rambus also
Rambus fails to identify any prejudice that
THE PATENT INFRINGEMENT CLAIMS AGAINST SAMSUNG SHOULD BE STAYED.
8
A stay of the proceedings against Samsung pending resolution of the expected appeal of
9
Hynix I and the re-examinations would promote judicial and litigant economy, simplify and
10
clarify the issues, avoid the hardship to Samsung represented by trial of patent infringement
11
claims before the Federal Circuit resolves many of the relevant issues and the PTO can complete
12
the re-examinations, and leave Rambus unharmed in any cognizable way.
13
A.
14 15
A Stay of Rambus’s Patent Infringement Claims Against Samsung Pending the Hynix I Appeal and the Re-Examinations Would Serve Judicial Economy and Further Efficient Resolution of the Relevant Issues.
16
Rambus opposes a stay pending the Hynix appeal primarily based on the contention that
17
since this Court rejected Hynix’s arguments, a stay would simply enable a “rehash[ing]” of the
18
arguments.
19
regular business of the Federal Circuit and a judgment winner’s self-serving assertions that
20
nothing will be gained by an appeal cannot legitimately demonstrate that the appeal does not offer
21
significant benefits and efficiencies for other litigation.
Opp. 31.
Certainly, consideration of challenges to trial-court judgments is the
22
Rambus does not deny the substantial overlap in the issues of this litigation and Hynix I.
23
The issuance of a stay pending the Federal Circuit’s decision in the Hynix I appeal could greatly
24
simplify the issues in this litigation and even potentially eliminate the need for a patent trial.
25
Issues presented in the Hynix I appeal may lead the Federal Circuit to revisit its claim
26
construction in Infineon and reverse this Court’s claim construction rulings.
27
were resolved in Rambus’s favor, the Federal Circuit’s rulings on claim construction, written
28
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description, and obviousness would certainly influence proceedings and arguments in this
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litigation. The decision in Hynix I will clearly simplify the issues before the Court and the jury,
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further judicial economy, and avoid unnecessarily duplicative litigation. See, e.g., Jinro Am.
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Inc. v. Secure Invs., Inc., 266 F.3d 993, 998 (9th Cir. 2001) (explaining that separate trials would
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permit resolution of potentially dispositive issues and defer costly and possibly unnecessary
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proceedings).
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A stay pending the re-examinations would likewise economize judicial resources and
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make decision-making more efficient by giving the Court the benefit of the PTO’s guidance and
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potentially narrowing the issues for trial.
Rambus attempts to avoid the obvious efficiencies
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represented by the resolution of the re-examinations with the bald and unsubstantiated assertion
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that a stay could “introduce inefficiency and needlessly complicate issues, proof and questions of
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law,” Opp. at 36, and by hypothesizing a “potentially long delay” with the PTO, Opp. at 35. In
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fact, the re-examinations have proceeded to an advanced stage and it is likely that all or at least
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some of the pending claims will not survive the re-examination process, or at least in their present
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form, a fact that Rambus leaves wholly unaddressed. As Samsung explained in its motion,
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detailed office action had been received rejecting all claims of five of the patents-in-suit; other re-
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examination proceedings have found substantial new questions of patentability. See Samsung’s
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Mot. at 13 (citing Decl. of Melanie Sarwal in Supp. of Samsung’s Mot. for Separate Patent Trials
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and to Stay the Patent Trial Pending Resolution of the Hynix I Appeal and the Re-Examination,
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and Mem. in Supp., Ex. 8 [office action on the ‘020 patent] (rejecting all claims); Sarwal Decl.,
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Ex. 9 [office action on the ‘120 patent] (rejecting all claims); Sarwal Decl., Ex. 10 [office action
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on the ‘863 patent (rejecting all claims); Sarwal Decl., Ex. 11 [office action on the ‘184 patent
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(rejecting all claims); Sarwal Decl., Ex. 12 [office action on the ‘916 patent (rejecting all claims)).
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And now two additional office actions have issued.
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Office Actions in the re-examination proceedings for U.S. Patent No. 6,697,295 (“‘295 patent”)
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and U.S. Patent No. 6,038,195 (“‘195 patent”) (ex parte reexamination), and rejected all claims
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requested for re-examination, including those claims asserted by Rambus. See Decl. of Melanie
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SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
On August 25, 2008, the PTO issued its first
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Case 5:05-cv-00334-RMW
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Sarwal in Supp. of Samsung’s Reply, Ex. A [office action on the ‘295 patent] (rejecting all
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claims); Sarwal Decl., Ex. B [office action on the ‘195 patent] (rejecting all claims).
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to a patent infringement trial when multiple PTO actions suggest that the claims will not likely
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survive at all, especially in their current form and scope, would be undeniably inefficient and
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unfair. See, e.g., MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556, 563 (E.D. Va. 2007)
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(explaining that a stay pending re-examination permits a district court to “avoid inconsistent
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results, narrow the issues, obtain guidance from the PTO, or . . . avoid the needless waste of
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judicial resources, especially if the evidence suggests that the patents-in-suit will not survive
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reexamination.”)
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Proceeding
(citing, inter alia, Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed.
Cir. 1983)).
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Any delay represented by completion of the re-examination proceedings, Rambus’s other
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primary objection to a stay, has been routinely rejected as a reason to deny a stay. Indeed, this
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Court has recognized the “liberal policy in favor of granting motions to stay proceedings pending
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the outcome of USPTO reexamination or reissuance proceedings.” ASCII Corp. v. STD Entm’t
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USA, Inc., 844 F.Supp. 1378, 1381 (N.D. Cal. 1994); see also MercExchange, 500 F.Supp.2d at
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563-64 (“[a] review of relevant caselaw indicates that district courts routinely grant pre-trial stays
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when PTO reexaminations are underway and evidence suggests that the patents-in-suit may not
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survive reexamination.”) (citing cases).
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proceedings suffer from any unusual delays. Indeed, only one pending re-examination has not
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received an office action. And since the newest office actions track the five earlier office
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actions, it is reasonable to anticipate that the remaining pending re-examination will likely also
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reject the claims on the same basis.
Moreover, Rambus does not suggest that these
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A stay until the resolution of the anticipated Hynix I appeal and the multiple pending inter
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partes and ex parte re-examination requests would conserve the resources that the Court and the
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parties will expend—potentially needlessly—in litigating and resolving substantial issues
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regarding alleged patent infringement and the various defenses to those claims.
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SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
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Case 5:05-cv-00334-RMW
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B.
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Proceeding to Trial Prior to Resolution of the Hynix I Appeal and the Re-Examinations Would Prejudice Samsung, But a Stay Would Not Irreparably Harm Rambus.
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Rambus erroneously contends that a stay would cause it irreparable harm by possibly
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causing reputational injury and having indirect negative financial effects on the company.
Opp.
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at 29-30. These types of indefinite and ancillary harms, however, do not constitute the type of
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irreparable harm that can preclude a stay of litigation.
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Rambus—delay of a potential money damages award—does not constitute a recognizable
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irreparable harm in the stay equation. See, e.g., L. A. Mem. Coliseum Comm’n v. Nat’l Football
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League, 634 F.2d 1197, 1202 (9th Cir. 1980). Moreover, a stay pending the re-examinations
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does not represent any “clear tactical disadvantage” to Rambus that could be regarded as
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prejudicial.
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1023 (N.D. Cal. 2005). The delay involved in postponing trial proceedings until the conclusion
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of the re-examination process is acceptable and “not unduly prejudicial in light of the clarity
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reexamination of the patents-in-suit may bring to the litigation.” Id. at 1024. And the time
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required for the Hynix appeal, likely about a year—not “many years” as asserted by Rambus,
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Opp. at 29—is certainly a reasonable amount of time to wait when the benefits and efficiencies
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represented by a Federal Circuit decision are considered. Rambus’s fear that Hynix may seek a
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further stay later in time depending on how events unfold is irrelevant to the Court’s decision to
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grant this stay. Opp. at 29-30. Certainly the Court has the discretion to fashion this stay as it
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sees fit and to grant or deny any future stay request; no indefinite stay is sought.
Even the more direct harm alleged by
In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.Supp.2d 1022,
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Rambus misrepresents Samsung’s asserted harm, suggesting that Samsung has identified
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merely having to defend the lawsuits as the prejudice warranting a stay. Opp. 30. In fact,
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Samsung’s hardship is the investment in preparing for and litigating a patent trial before the
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Federal Circuit decides dispositive issues in the case and the re-examinations resolve what claims
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are even at issue.
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being considered in an appeal, the absence of a stay threatens irreparable harm. See, e.g., Astec
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Am., Inc. v. Power-One, Inc., No. 6:07-cv-464, 2008 U.S. Dist. LEXIS 55100, at *6, *13 (E.D.
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Indeed, courts have recognized that when disputed patent claim terms are
SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
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Tex. July 15, 2008) (granting stay based on appeal in earlier case challenging claim construction
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and other rulings on same patents when the movant argued that “a stay would ensure the parties
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avoid the unnecessary risks of proceeding through discovery and trial only to have these rulings
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altered by the Federal Circuit, thereby potentially forcing the parties to start over in both cases”).
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And the denial of a stay pending re-examination imposes the irreparable harm of defending
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against patent infringement claims without the benefit of the resolution provided by the re-
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examination proceedings. See Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir.
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1983) (“One purpose of the reexamination procedure is to eliminate trial of that issue (when the
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claim is canceled) or to facilitate trial of that issue by providing the district court with the expert
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view of the PTO (when a claim survives the reexamination proceeding).”) (emphasis added); see
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also Lentek Int’l, Inc. v. Sharper Image Corp., 169 F.Supp.2d 1360, 1362 (M.D. Fla. 2001) (“As
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several courts [including the Federal Circuit] have noted, the sponsors of the patent reexamination
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legislation clearly favored the liberal grant of stays by the district courts when patents are
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submitted for reexamination as a mechanism for settling disputes quickly and less expensively
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and for providing the district courts with the expertise of the patent office.”) (emphasis added).
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A balancing of the parties’ relative hardships supports the granting of a stay. CONCLUSION For these reasons and those presented in Samsung’s motion, the Court should (1) try Rambus’s patent infringement claims against Samsung in a separate trial; and (2) stay the patent trial until the resolution of the Hynix I appeal and the re-examinations.
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Case 5:05-cv-00334-RMW
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Dated:
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August 29, 2008 WEIL, GOTSHAL & MANGES, LLP
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By: _/s/ David J. Healey David J. Healey
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MATTHEW D. POWERS (Bar No. 104795) Email: [email protected] EDWARD R. REINES (Bar No. 135930) Email: [email protected] WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 Telephone: (650) 802-3000 Facsimile: (650) 802-3100 DAVID J. HEALEY (admitted pro hac vice) Email: [email protected] ANITA E. KADALA (admitted pro hac vice) Email: [email protected] WEIL, GOTSHAL & MANGES LLP 700 Louisiana, Suite 1600 Houston, TX 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 Attorneys for Defendants SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., and SAMSUNG AUSTIN SEMICONDUCTOR, L.P.
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SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL
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