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Parties Listed On Signature Page

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UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

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RAMBUS INC., Plaintiff,

v. HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA INC., SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P., NANYA TECHNOLOGY CORPORATION, NANYA TECHNOLOGY CORPORATION U.S.A., Defendants RAMBUS INC., Plaintiff, v. SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P., Defendants RAMBUS INC., Plaintiff, v. MICRON TECHNOLOGY, INC. and MICRON SEMICONDUCTOR PRODUCTS, INC., Defendants

Case No. C 05-00334 RMW MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES PUBLIC VERSION Date: Time: Ctrm: Judge:

December 11, 2008 2:00 p.m. 6 Hon. Ronald M. Whyte

Case No. C 05-02298 RMW

Case No. C 06-00244 RMW

28 MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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TABLE OF CONTENTS

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Page

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I.

INTRODUCTION ...........................................................................................................................1

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II.

FACTUAL BACKGROUND .........................................................................................................2

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A.

The Design and Operation of DRAM Memory Systems ....................................................2

6

B.

Rambus’s Controller Licenses.............................................................................................3

7

1.

The Rambus-Intel Patent License Agreement .........................................................3

8

2.

The Rambus-AMD Patent License Agreement .......................................................4

9

III.

RAMBUS’S PATENTS ARE EXHAUSTED AS TO ALL ACCUSED DRAMS USED WITH INTEL OR AMD MEMORY CONTROLLERS. .....................................5

10 A. 11

Rambus’s Claimed Memory Devices, Memory Controllers, Methods, and Memory Systems Each Substantially Embody The Claimed Rambus Inventions. .............................................................................................................5

12 1.

The Operations of a Memory Controller Are Necessarily Required For an Accused DRAM To Infringe the Method Claims of the Rambus Patents-in-Suit.....................................................................7

2.

The Features of a Memory Controller Are Necessarily Required For an Accused DRAM To Infringe the Device Claims of the Rambus Patents-in-Suit.....................................................................7

13 14 15 16 B.

Rambus’s Method Claims Are Exhausted As To All Memory Systems based on Licensed Memory Controllers..............................................................................9

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C.

Rambus’s Apparatus Claims Are Similarly Exhausted.....................................................10

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D.

Rambus Misconstrues Both the Supreme Court Decision in Quanta and The Manufacturers’ Exhaustion Defense ...................................................................12

E.

Rambus Cannot “Patent Around” Patent Exhaustion........................................................13

17

20 21 IV.

CONCLUSION .............................................................................................................................14

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TABLE OF AUTHORITIES

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Page

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Cases

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Accord Adams v. Burke, 17 Wall. 453, 21 L.Ed. 700 (1873), aff’d 42 F.3d 1411 (Fed. Cir. 1994) (unpublished)..................................................................................................................................... 12

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Anton/Bauer, Inc. v. PAG, Ltd., 329 F.3d 1343 (Fed. Cir. 2003) ......................................................................................................... 10

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Cyrix Corp. v. Intel Corp., 846 F. Supp. 522 (E.D. Tex. 1994) aff’d 42 F.3d 1411 (Fed. Cir. 1994) (unpublished)......................................................................................................................... 10, 11, 12

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Dolly, Inc. v. Spalding & Evenflo Cos., 16 F.3d 394 (Fed. Cir. 1994) ............................................................................................................... 9 Everpure, Inc. v. Cuno, Inc., 875 F.2d 300 (Fed. Cir. 1989) ........................................................................................................... 10

12 13 14

Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. ___, 128 S.Ct. 2109 (2008) .......................................................................... 1, 10, 11, 12, 14 RF Delaware, Inc. v. Pac Keystone Techs., Inc., 326 F.3d 1255 (Fed. Cir. 2003) ....................................................................................................... 7, 9

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INTRODUCTION In this motion, Rambus takes issue with none of the basic facts underlying the Manufacturers’

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exhaustion defenses. In fact, Rambus instructs the court to assume that the ultimate factual

4

conclusions material to this motion are true.1 In particular, Rambus agrees that the memory

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controllers sold by Intel and AMD under unrestricted licenses from Rambus have no use other than in

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combination with the Manufacturers’ Accused DRAMs. Rambus agrees that the Manufacturers’

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Accused DRAMs have no use other than in combination with memory controllers such as those sold

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by Intel and AMD in their chipsets or microprocessors. Rambus’s sole arguments that exhaustion

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does not apply are that controllers and DRAMs are separate components sold (initially) in the same

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“tier” of commerce, and that it has patents covering these individual components above. To the contrary, controllers and DRAMs, as well as Rambus’s patents and claims are highly

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interdependent. The Accused DRAMs cannot allegedly infringe the asserted claims without the

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presence and/or operation of the licensed memory controllers. Rambus’s position would eviscerate

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the doctrine of patent exhaustion and allow a patentee to collect multiple rewards for a single set of

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(alleged) inventions on each type of component necessarily used to implement these (alleged)

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inventions. The fact that Rambus has prosecuted patents directed to the individual components of

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memory systems (as well as the overall memory system itself and methods of operating the system) is,

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and should be similarly irrelevant to the application of the principles of exhaustion, recently explained

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by the Supreme Court in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. ___, 128 S.Ct. 2109

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(2008).). Because the Rambus patents at issue here are substantially embodied in the licensed

21

controllers, and the licensed controllers have no reasonable use other than in combination with

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See Rambus’s Memorandum of Points and Authorities in support of Motion for Partial Summary Judgment re Manufacturers’ Exhaustion Affirmative Defenses (“Rambus Mem.”), page 4 and the Declaration of Peter A. Detre in Support (“Detre Decl.”) and the exhibits thereto. This opposition is also supported by the accompanying Declaration of Theodore G. Brown, III (“Brown Decl.”), and the exhibits thereto. Initially, Rambus sought partial summary judgment only as against Hynix, Micron, and Samsung. In its Supplemental Brief Regarding Motion for Partial Summary Judgment, filed November 10, 2008, Rambus has expanded its Motion to seek summary judgment as against Nanya as well. This opposition to Rambus’s Motion is submitted on behalf of all of the Manufacturers.

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complementary DRAMs, Rambus’s asserted patents claiming methods of operating the DRAMs in a

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memory system, and its patents claiming memory devices, are each exhausted to the extent those

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DRAMs are incorporated in memory systems operated by a licensed controller.

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Rambus’s motion should be denied. II.

FACTUAL BACKGROUND

6

A.

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Modern DRAM memory systems have two fundamental components: the DRAMs, which

The Design and Operation of DRAM Memory Systems

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store information, and a memory controller, which communicates with and controls the operations of

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the DRAMs. All command and other control information and all addresses originate with the

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controller and are sent to the DRAMs, and data is transferred between the memory controller and the

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DRAMs. (Detre Decl., Exh. 12 (Allan Report) p. 5) The memory controller is typically included

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either in a “chipset” where it is connected to the microprocessor or directly on the microprocessor

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itself. (Id. at p. 7-8) In all Intel microprocessor-based computers since at least the mid-1990s, the

14

memory controller has been included in the chipset. (Id.) Over the same time frame, many computers

15

based on AMD microprocessors have also included the memory controller on a chipset interfaced to

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the microprocessor. For the last several years, however, many of AMD’s microprocessors have

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include the memory control integrated on the CPU itself. (Id. at p. 8)2 Graphics processors (typically

18

found on a separate “graphics card” in a computer) such as those manufactured and sold by ATI, now

19

a part of AMD, similarly include an embedded memory controller directly interfacing to particular

20

graphics DRAMs, such as the accused GDDR3 and GDDR3 SDRAM (Id. at p. 8)

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DRAMs and memory controllers each have a specific, standardized interface. (Id. p. 7) In

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order for DRAMs and memory controllers to operate with each other, the interfaces of these parts

23

must be complementary. (Id.) As DRAM interfaces have evolved and changed in each succeeding

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generation, the interfaces of memory controllers have been redesigned to complement and interoperate

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In still other systems (particularly smaller memory systems such as those included in consumer electronics), the memory controller is a block of circuitry included on the main control chip, whether it is itself a microprocessor, microcontroller, or other “SOC” (“system on a chip”) device. (Detre Decl., Exh. 12 at p. 9) In these systems, the memory controller circuitry block can be either designed by the SOC manufacturer or acquired pre-designed from a third party “IP” provider, such as Rambus. MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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with each new generation of DRAMs. (Id., p. 6-7) Memory controllers are specifically designed and

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configured to operate with particular DRAMs. (Id., p. 9) For DRAMs that comply with a certain

3

JEDEC standard, the corresponding memory controller is specifically designed to operate with that

4

particular type of JEDEC standard-compliant DRAM. (Id.) Accordingly, the only significant use for

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memory controllers is incorporation into a memory system with the requisite quantity of a particular

6

type of DRAM. (Id.) DRAMs are useless without a memory controller that is specifically designed to

7

operate with that that type of DRAM; similarly, memory controllers serve no function without

8

DRAMs having complementary interfaces. (Id.)

9

Rambus does not dispute any of the above, see Rambus Mem. at 5; indeed, Rambus’s position

10

is that the Court should assume both that “(3) The Manufacturers’ Accused Products are DRAM

11

memory devices that are “specially adapted for use” with the Licensee’s [Intel and AMD] memory

12

controllers” and that “(4) The Manufacturers’ Accused Products cannot be utilized without the

13

Licensees’ memory controllers, and vice versa.” (emphasis added) Id.

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B.

15

The facts relating to the Rambus licenses granted to (most importantly) Intel and AMD are

16 17 18 19

Rambus’s Controller Licenses

similarly undisputed. Rambus Mem at 4; (1) and (2). 1.

The Rambus-Intel Patent License Agreement

In September, 2001, Rambus entered into a patent license agreement with Intel. Under this agreement (the “Intel Agreement”), Rambus granted Intel a

REDACTED

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(Brown Decl., Exh. A at p. 6, §3) REDACTED

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REDACTED

(Id. at p. 4, §1.21)

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(Id. at p. 3, §1.21) REDACTED (Id. p. 4, §1.11)

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REDACTED

(Id. at p. 5, §2.1(a)).

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(Id. at p.12, §12). Importantly,

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under this agreement, all Intel chipsets were and are licensed under all of Rambus’s relevant patents

4

including the patents-in-suit. (See Brown Decl., Exh. A, § 1.21; Exh. C, p 44)

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2.

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The Rambus-AMD Patent License Agreement

On December 30, 2005, Rambus entered into a patent license agreement with AMD (the “AMD Agreement”). (Brown Decl., Exh. B) The AMD Agreement provides: REDACTED

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(Id. at p. 6, §3.1)

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REDACTED

Under the AMD Agreement,

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REDACTED

(Id. at pp. 2-3, §§1.3 and 1.4), (Brown Decl., Exh. C at p. 43)

REDACTED

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REDACTED

(Brown Decl., Exh. B at p. 4, §1.13)

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(Id. at p. 4, §§ 1.12, 1.14) REDACTED

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(Id. at p. 5, §2.1(a))

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(Id. at p. 10, §4.1) REDACTED

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REDACTED

(Id. at p. 12, §5.1) //// MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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RAMBUS’S PATENTS ARE EXHAUSTED AS TO ALL ACCUSED DRAMS USED WITH INTEL OR AMD MEMORY CONTROLLERS.

2 A. 3

Rambus’s Claimed Memory Devices, Memory Controllers, Methods, and Memory Systems Each Substantially Embody The Claimed Rambus Inventions.

4

The Accused DRAM products, by themselves, perform no function. Their usefulness is

5

realized only when they are combined with controllers in memory systems. Further, the memories and

6

the controllers must be constructed so that they can successfully communicate and transfer addresses,

7

control information, and data necessary for successful operation. The parameters of the operation of

8

the DRAM must be known to and understood by the controller, and vice versa. Further, a particular

9

type of accused DRAM, whether DDR2, DDR3, GDDR3, or GDDR4 SDRAM, can only successfully

10

operate with a controller having an interface specific to that type of DRAM, and both of these

11

components must “know” the CAS latency, the write latency, the burst length, and the timing and

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frequency of data transfer, as well as numerous other parameters. Much like a lock and a key, the

13

memory controller and the DRAM represent, for purposes of Rambus’s claims, two sides of the same

14

coin; one is useless without the other, and the functionality of each is dictated by the functionality of

15

the other. In other words, the claimed Rambus inventions are each “substantially embodied” both in

16

the individual components and in their normal operation in memory systems. Rambus admits as much

17

when it agrees that the only substantial use for memory controllers is in combination with DRAMs

18

with a corresponding memory interface, and vice versa. Each of the claims to be tried in this case is inextricably tied to the features and operation of a

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memory controller that is required to actually use DRAMs with the claimed features for one or more

21

of the following reasons: •

22

Certain steps of the method claims require a memory controller in the system (see

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Claim 14 of U.S. Patent No. 6,182,184; claim 16 of US patent No., 6,266,285; Claim

24

34 of US Patent No. 6,584,037; and Claim 14 of US Patent No. 6,452,863);3

25 3

26 27 28

Each of the Rambus patents with one or more claims Rambus has designated for trial is attached to the Detre Declaration accompanying Rambus’s Motion. For convenience, since all of the patents share the same specification, a copy of the text of currently asserted claims (taken from Exhibit B to the Expert report of Robert Murphy) is attached as Brown Decl., Exh. F to the For ease of reference, the patents attached to the Detre Declaration have the following Exhibits numbers; the order in the list Continued on the next page MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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•

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Several of the device claims recite elements relating to the operation of the DRAM that

2

require the use of a corresponding controller, even where a controller is not explicitly

3

mentioned in the claim (see Claim 1 of U.S. Patent No. 6,751,696; Claim 3 of U.S.

4

Patent No. 6,546,446; Claim 33 of U.S. Patent No. 6,324,120; Claim 30 of U.S. Patent

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No. 6,378,020; and Claim 28 of U.S. Patent No. 6,426,916);

6

•

Several of the device claims recite features (e.g., “operation code,” “block size

7

information,” “delay time,” “external clock”) that are generated by the memory

8

controller in all memory systems that include JEDEC standard synchronous DRAMs

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(see Claims 27 and 34 of U.S. Patent No. 6,314,051; Claim 4 of U.S. Patent No.

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6,751,696; Claims 3 and 4 of U.S. Patent No. 6,546,446; Claim 33 of U.S. Patent No.

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6,324,120; Claim 36 of U.S. Patent No. 6,378,020; and Claim 28 of U.S. Patent No.

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6,426,916 ); and/or

13

•

Several of the device claims recites features (i.e., “delay locked loop,” “clock

14

alignment circuit”) that are used in JEDEC-compliant DDR, DDR2, and DDR3

15

SDRAM to ensure the reliable exchange of signals and data between the memory

16

controller and the DRAM (see Claim 4 of U.S. Patent No. 6,546,446; and Claim 36 of

17

U.S. Patent No. 6,378,020).

18 19 20 21 22 23 24 25 26 27 28

Continued from the previous page

below is the same order in which the claims appear in Exhibit F. US Pat. No.

Detre Decl.

6,182,184 6,266,285 6,314,051 6,584,037 6,751,696 6,546,446 6,324,120 6,378,020 6,426,916 6,452,863

Exh. 1 Exh. 2 Exh. 3 Exh. 9 Exh. 10 Exh. 8 Exh. 4 Exh. 5 Exh. 6 Exh. 7

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The Operations of a Memory Controller Are Necessarily Required For an Accused DRAM To Infringe the Method Claims of the Rambus Patents-inSuit

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Claim 14 of U.S. Patent No. 6,182,184; claim 16 of US patent No., 6,266,285; Claim 34 of US

4

Patent No. 6,584,037; and Claim 14 of US Patent No. 6,452,863 are all method claims directed to a

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method of operation of a memory device. (Detre Decl., Exh. 12, pp. 11-14; Brown Decl. Exh. F)

6

These method claims include operations such as “receiving block size information,” “sampling an

7

operation code,” and “outputting data.” (Id.) These operations, however, are only performed in a

8

memory system having a memory controller and appropriate DRAMs. (Detre Decl. Exh. 12, pp.11-

9

14 ) Also, claim 13 of the ‘184 patent, claim 14 of the ‘863 patent; and claims 24 and 33 of the ‘918

10

patent (by their dependence upon claim 13 and 18, respectively) explicitly recite operations that are

11

performed by the memory controller: (1) receiving “block size information” and a “write request”

12

from a master (controller) and (2) “receiving an operation code” from a controller. (Id.) Other

13

method claims recite receipt of values and control information (“request for write operation”, “data”,

14

“set register request”, “a value representative of the programmable number of clock cycles”,

15

“operation code”, “precharge information”, etc.) that must be generated and transmitted by a

16

controller.

17

For all of these method claims, a memory controller must be present to perform of each and

18

every step of the claimed method. Without a memory controller, an Accused DRAM does not, and

19

cannot, infringe Rambus’s method claims. RF Delaware, Inc. v. Pac Keystone Techs., Inc., 326 F.3d

20

1255, 1267 (Fed. Cir. 2003) (only the practice of each and every step of a claimed method constitutes

21

direct infringement).

22 23 24

2.

The Features of a Memory Controller Are Necessarily Required For an Accused DRAM To Infringe the Device Claims of the Rambus Patents-inSuit

Claims 4 of the ‘446 patent and 36 of the ‘020 patent recite a “delay lock loop” and “clock

25

alignment circuit,” both of which are timing circuits. (See Brown Decl., Exh. F) The JEDEC

26

standards for DDR SDRAM, DDR2 SDRAM, DDR3 SDRAM, GDDR3 SDRAM, and GDDR4

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SDRAM specify a timing circuit to maintain the proper timing between the memory controller and the

28

DRAM. (Detre Decl., Exh. 12, pp. 12, 13) In memory systems based on JEDEC-compliant DRAMs, MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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timing circuit are used in DRAMs to maintain the timing of signals and data sent between the DRAM

2

and the memory controller. (Id.) The use of a timing circuit in the DRAM enables the memory

3

controller to reliably predict when data will be sent from the DRAM and then “catch” it. (Id.) Timing

4

circuits are only necessary because of the signals and data sent between the memory controller and the

5

DRAM; without the memory controller, there would be no need for the DRAM to maintain a

6

consistent timing scheme.

7

Other asserted device claims recite receipt by the memory of parameters that are generated

8

only by the controller, including “precharge information” (claims 34 of the ‘037 patent, 34 of the ‘446

9

patent, and 33 of the ‘120 patent); “block size information” (claims 14 of the ‘184 patent and 14 of the

10

‘863 patent); operation codes (claims 27 and 34 of the ‘051 patent, 4 of the ‘696 patent, 3 and 4 of the

11

‘446 patent, 33 of the ‘120 patent, 36 of the ‘020 patent and 28 of the ‘916 patent), etc. All of these

12

signals are determined and sent by the memory controller to the DRAM. (Detre Decl., Exh. 12,

13

pp. 9-114) There is no source for these signals other than the memory controller, and there is no

14

recipient of these signals other than the DRAM.

15

Further, claim 1 of the ‘696 patent, claim 3 of the ‘446 patent, claim 33 of the ‘120 patent,

16

claim 30 of the ‘020 patent, and claim 28 of the ‘916 patent are device claims that explicitly recite

17

actions that can only be met in an operating memory system having both an operating controller and

18

operating DRAMs:

19

•

“the memory device stores the value in the programmable register in response to the

20

first operation code” and “the output driver circuitry outputs a first portion of the

21

data . . .” (see claim 1 of the ‘696 patent, on which asserted claim 4 depends)

22

•

23 24

patent, on which asserted claim 36 depends) •

25 26

“the input receiver circuitry samples the first operation code” (see claim 29 of the ‘120 patent, from which asserted claim 33 depends)

•

27 28

“the output driver circuitry outputs a first portion of data ” (see claim 30 of the ‘020

“memory device outputs the first amount of data” (see claim 26 of the ‘916 patent, from which claims 28 and 40 depend)

•

“the value is stored in the register” (see claim 28 of the ‘916 patent)

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(See Detre Decl., Exh. 12, pp. 11-14 and Brown Decl. Exh. F.) In all memory systems based on

2

JEDEC-compliant DRAMs, a memory controller is required to perform these actions and for the

3

memory system to operate properly. (Detre Decl., Exh. 12, p. 15) All of these actions are either

4

initiated by the memory controller and/or required for the memory controller to properly read data

5

from the DRAMs. (Id.) Without a memory controller, the memory system would not operate

6

properly because the DRAMs could not be properly or reliably accessed. (Id.)

7

For all of the device claims, a memory controller is necessary to provide certain recited

8

elements of the claims. Without a memory controller, the Accused DRAMS do not meet each every

9

limitation of Rambus’s device claims. Dolly, Inc. v. Spalding & Evenflo Cos., 16 F.3d 394, 397 (Fed.

10

Cir. 1994) (“[t]o show infringement, the plaintiff must establish that the accused device includes every

11

limitation of the claim or an equivalent of each limitation.”).

12

B.

13 14

Rambus’s Method Claims Are Exhausted As To All Memory Systems based on Licensed Memory Controllers.

To directly infringe Rambus’s method claims, Rambus must show that each manufacturer

15

practices each and every step of the claimed method. RF Delaware, Inc. v. Pac Keystone Techs., Inc.,

16

326 F.3d 1255, 1267 (Fed. Cir. 2003). However, any practice of the method by the Manufacturers in

17

this country is either de minimis or non-existent, and Rambus has shown none.4 Rather, the methods,

18

to the extent they are performed at all, are performed by the end users of completed computer systems

19

– the very downstream users the Rambus contends that the doctrine of patent exhaustion was intended

20

to protect.

21

In these completed systems, the memory controllers are licensed, and as such, Rambus’s patent

22

rights as to those memory controllers are exhausted. Because of the requisite interoperation of the

23

licensed memory controllers with DRAMs, the licensed operation of the memory controllers includes

24

the operation of any corresponding DRAMs. Accordingly, there is no direct infringement of the

25 4

26 27

See, e.g., Nanya Technology Corporation’s and Nanya Technology Corporation USA’s Notice of Motion and Motion for Summary Judgment of Noninfringement of Method Claims (MSJ #3) Case No. 04-cv-00334-RMW Docket 2455; Samsung’s Motion for Summary Judgment of NonInfringement of Method Claims (MSJ No. 12), Case No. 04-cv-00334-RMW Docket 2420.

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method claims by the end-users in such systems based on licensed memory controllers. Without any

2

underlying direct infringement, there can be no indirect infringement by any of the Manufacturers.

3

E.g., Anton/Bauer, Inc. v. PAG, Ltd., 329 F.3d 1343, 1349 (Fed. Cir. 2003); Everpure, Inc. v. Cuno,

4

Inc., 875 F.2d 300, 304 (Fed. Cir. 1989) (“without direct infringement there can be no contributory or

5

induced infringement”); Quanta, 553 U.S. at ___, 128 S.Ct. at 2118 (sales of licensed memory

6

controllers exhaust claims to method of operation of controllers with other component required by

7

claims); Cyrix Corp. v. Intel Corp., 846 F. Supp. 522, 540 (E.D. Tex. 1994) (“neither Cyrix nor its

8

customers can infringes claims 2 and 6 of the ‘338 patent either directly, or by actively inducing others

9

to infringe.”) aff’d 42 F.3d 1411 (Fed. Cir. 1994) (unpublished).

10

C.

11

As discussed above, the functionality of the memory controller is necessarily required (but not

12

sufficient)5 for an Accused DRAM to infringe the device claims of the asserted Rambus patent claims.

13

Rambus argues that the authorized sale of one article cannot exhaust Rambus’s patent rights in the

14

Accused Products because they are sold in the same “tier” of commerce. That is, Rambus’s position is

15

that because the Manufacturers do not purchase licensed controllers and combine them with DRAM to

16

form memory systems, the unrestricted, licensed sales of Intel and AMD memory controllers and

17

microprocessors do not exhaust Rambus’s patents with claims drawn to memory devices or their

18

operation. Rambus offers no legal authority for this proposition beyond repeated recitations of the

19

precise factual situation considered in Quanta, where the issue was whether licensed, unrestricted

20

sales of memory controllers exhausted LG’s patent rights in claims practiced, if at all, by a

21

downstream user of Intel’s chipsets. Rambus ignores the fact that DRAMs, such as those accused of

22

infringement in this suit, are in fact sold and resold in multiple tiers of commerce. In particular,

23

Rambus omits the fact that DRAMs are also sold by Dell (and other OEMs), albeit as part of memory

24

systems computers or as memory upgrades to owners of Dell computers. Under Rambus’s reasoning,

Rambus’s Apparatus Claims Are Similarly Exhausted

25 26 27

5

Like Rambus’s Motion, this opposition assumes, solely for the purposes of this motion, that the Rambus claims cover the Accused DRAMs; the Manufacturers do not admit that the Accused DRAMs infringe any valid or enforceable claim of any Rambus patent.

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1

despite having licensed Intel and AMD to sell memory controllers, Rambus would be able to sue Dell

2

for its sale of DRAMs even though they are sold either already combined in memory systems with

3

licensed controllers or to upgrade a previously sold computer memory system also based on licensed

4

memory controller. Rambus’s reasoning, if accepted by the Court, would eviscerate the exhaustion

5

doctrine.

6

The clear import of Quanta, Cyrix, and other exhaustion decisions is that Dell, which

7

constructs memory systems based on fully licensed memory controllers, should be free of

8

infringement claims against the memory system in the products it sells, including claims of

9

infringement by the DRAMs per se. As discussed above, these licensed controllers have no

10

reasonable or substantial use except in combination with DRAMs having interfaces that are specially

11

and precisely adapted to work with, and only with, complementary interfaces on the controllers. It

12

follows that, if Rambus is barred by exhaustion from suing Dell for its use and sale of DRAMs, then

13

Rambus is also barred by exhaustion from suing the Manufacturers for supplying the Accused

14

DRAMs to Dell (and other OEMs) to the extent that the Accused Products are incorporated in memory

15

systems based on licensed controllers. Otherwise, the supply of the necessary DRAMs to Dell and

16

others who wish to build computer and other memory systems based on the licensed Intel and AMD

17

controllers would either be in jeopardy altogether or bear a second royalty that might be due from the

18

Manufacturers. Patent exhaustion was designed to prevent either of these possibilities.

19

Fundamentally, Rambus has already been rewarded for its inventions once, through the

20

substantial royalties negotiated and received from Intel and AMD. Under the circumstances relevant

21

here, with which Rambus has agreed, Rambus is not entitled to a second reward from the

22

Manufacturers at least to the extent the Accused Products are combined with licensed memory

23

controllers, including those in Intel and AMD chipsets, AMD microprocessors and AMD graphics

24

microprocessors. See Cyrix Corp. v. Intel Corp., 846 F. Supp. 522, 539 (E.D. Texas 1994) (“The

25

purpose of the patent exhaustion doctrine, e.g. preventing patentees from extracting double recoveries

26

for an invention, is defeated if the patent owner can ‘invent’ a noninfringing use by licensing

27

systems”.), aff’d 42 F.3d 1411 (Fed. Cir. 1994) (unpublished).

28

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D.

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Rambus Misconstrues Both the Supreme Court Decision in Quanta and The Manufacturers’ Exhaustion Defense

2 3

Exhaustion does not operate to protect only the licensed product sold from further claims of

4

infringement, as Rambus repeatedly suggests. (Rambus Mem. at, e.g., 10-11) Rather, as the Supreme

5

Court specifically held in Quanta,

6 7

the authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control postsale use of the article.

8

Quanta, 553 U.S. at ___, 128 S.Ct. at 2121 (emphasis added). Exhaustion is not limited to patents

9

covering the item sold, but extends also to any other patents that cover uses or combinations of the

10

item sold with other components, at least where the other patents are substantially embodied in the

11

items sold. That is, where the item sold has no reasonable uses other than in a combination covered

12

by another patent, that patent is similarly exhausted. Id. at 2119; Cyrix Corp. v. Intel Corp., 846 F.

13

Supp. 522, 540-41 (E.D.Texas 1994), aff’d 42 F.3d 1411 (Fed. Cir. 1994) (unpublished). Otherwise,

14

Rambus would be permitted to restrict the use of licensed Intel and AMD controllers “lawfully made

15

and sold” pursuant to licenses with Rambus. Accord Adams v. Burke, 17 Wall. 453, 457, 21 L.Ed. 700

16

(1873) (once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of

17

the patentee), aff’d 42 F.3d 1411 (Fed. Cir. 1994) (unpublished).

18

Quanta does not directly address this precise situation, since the facts of that case were that the

19

components that were combined with the Intel controllers were themselves (as far as the opinion

20

reveals) unpatented staples of commerce. The Court was not faced with, and did not rule on, a

21

situation either where each of the components of the combination were the subject of different patents

22

or where each of the components was specially adapted to work with (and only with) the other. The

23

Manufacturers have not been able to locate a case that specifically addresses the factual scenario

24

before this Court, and Rambus has failed to cite to any authority to support their argument that

25

exhaustion is inapplicable in this case. Nevertheless, both the logic and the policy of Quanta dictate

26

that exhaustion applies here.

27 28

The Manufacturers do not claim that all of Rambus’s patents are exhausted as to all components of any computer or other system simply because it includes a licensed memory controller. MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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Rambus Mem. at 10. Rather, because the Rambus patents at issue here are substantially embodied in

2

the licensed controllers, and the licensed controllers have no reasonable use other than in combination

3

with complementary DRAMs, Rambus’s separate patents claiming methods of operating the DRAMs

4

in a memory system and its patents claiming memory devices per se are exhausted to the extent those

5

DRAMs are incorporated in memory systems operated by a licensed controller. Thus, Rambus’s

6

parade of horrors has no reality, and its stated concerns regarding the effect of denying Rambus’s

7

motion are simply inapplicable.

8

E.

9

One of Rambus’s main arguments seems to be that, because it has some patents with claims

10

drawn to a memory controller and other patents with claims drawn specifically to a memory device,

11

that it is entitled to enforce or charge a separate royalty for each, even when both types of components

12

are (and must be) combined in the same memory system. Rambus has sought, and been granted

13

numerous patents based on the patent application SN 510,898 filed in April, 1990, naming

14

Drs. Farmwald and Horowitz as inventors. Some of these patents claim memory devices; some claim

15

methods of operating memory devices. Examples of both of these are asserted in the current litigation.

16

(See Brown Decl., Exh. F)

17

Rambus Cannot “Patent Around” Patent Exhaustion

In addition, Rambus has obtained patents with claims to a controller per se (Brown Decl.,

18

Exh. D (‘5,020 patent)) and to memory systems (Brown Decl., Exh. E (‘592 patent)). All of these are

19

directed simply to different “pieces” or combinations of the same basic set of alleged inventions. The

20

particular mode in which Rambus has written its claims does not, and cannot control the application of

21

principles of exhaustion. In rejecting one of LG’s argument that its method claims were not

22

exhausted, the Supreme Court noted

23 24 25 26 27 28

By characterizing their claims as method instead of apparatus claims, or including a method claim for the machine's patented method of performing its task, a patent drafter could shield practically any patented item from exhaustion. This case illustrates the danger of allowing such an end-run around exhaustion. On LGE's theory, although Intel is authorized to sell a completed computer system that practices the LGE Patents, any downstream purchasers of the system could nonetheless be liable for patent infringement. Such a result would violate the longstanding principle that, when a patented item is “once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of the patentee.” Adams, 17 Wall., at 457, 21 L.Ed. 700. We therefore reject LGE's argument that method claims, as a category, are never exhaustible. MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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Quanta, 553 U.S. at ___, 128 S.Ct. at 2116. Analogously, Rambus cannot prevent the application of

2

exhaustion simply by drafting claims to a memory system, methods of using the memory system, or to

3

the individual, necessary components of the memory system and prosecuting separate patents directed

4

to different components or features of the same memory interface (as any reasonably skilled patent

5

drafter should be able to do, if the different pieces arguably meet the requirements of patentability).

6

Rambus cannot prevent the application of exhaustion where, as here the components have no

7

reasonable use except in the combination that form the system. Under Rambus’s reasoning, a patentee

8

would always be free to seek a separate royalty on each component of any system in which as here, no

9

component has any substantial use except in combination with the others. This cannot be the correct

10

result.

11

IV.

12

CONCLUSION At bottom, all of Rambus’s patents and claims at issue in this lawsuit relate to a memory

13

interface, the components that are part of that interface, and the operation of the interface. The fact

14

that Rambus has separate patents on different aspects of that interface does not change the application

15

of exhaustion. The accused memory devices have no function or utility apart from a suitable

16

controller. Likewise, the controller has no function or utility apart from a suitable memory. The

17

claimed methods of operation represent the operation of the suitable memory combined with a suitable

18

controller, and the claimed memory subsystems necessarily include both a memory controller and

19

memory communicating through the same interface. In short, to the extent it is used at all, the

20

Rambus invention is substantially embodied in each of the major components of the memory systems

21

in which they are used, the methods of their operation, and the memory system as a whole.

22

Intel and AMD both sell memory controllers, a fundamental part of computer memory

23

systems, under unrestricted licenses from Rambus.

24

////

25

////

26

////

27

////

28

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Under these facts, that Rambus accepts as correct, Rambus’s patents are exhausted as to all

2

Accused DRAM used with Intel or AMD chipsets and other memory controllers. Rambus’s motion

3

should be denied.

4 5

DATED: November 14, 2008

Respectfully submitted,

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

By:

/s/ Theodore G. Brown, III DANIEL J. FURNISS (Bar No. 73531) Email: [email protected] THEODORE G. BROWN, III (Bar No. 114672) Email: [email protected] JULIE H. HAN (Bar No. 215279) Email: [email protected] TOWNSEND and TOWNSEND and CREW LLP 379 Lytton Avenue Palo Alto, CA 94301 Telephone: (650) 326-2400 Facsimile: (650) 326-2422 KENNETH L NISSLY (Bar No. 77589) Email: [email protected] SUSAN van KEULEN (Bar No. 136060) Email: [email protected] O’MELVENY & MYERS LLP 2765 Sand Hill Road Menlo Park, CA 94025 Telephone: (650) 473-2600 Facsimile: (650) 473-2601 KENNETH R. O'ROURKE (Bar No. 120144) Email: [email protected] WALLACE A. ALLAN (Bar No. 102054) Email: [email protected] O’MELVENY & MYERS LLP 400 South Hope Street, Suite 1060 Los Angeles, CA 90071-2899 Telephone: (213) 430-6000 Facsimile: (213) 430-6407 Attorneys for HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA INC., HYNIX SEMICONDUCTOR U.K. LTD., and HYNIX SEMICONDUCTOR DEUTSCHLAND GmbH

28 MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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Document 2578

By:

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/s/ JARED BOBROW (Bar No. 133712) Email: [email protected] JOHN D. BEYNON (Bar No. 233581) Email: [email protected] WEIL, GOTSHAL & MANGES LLP Silicon Valley Office 201 Redwood Shores Parkway Redwood Shores, CA 94065 Telephone: (650) 802-3000 Facsimile: (650) 802-3100 Attorneys for Defendant MICRON TECHNOLOGY, INC., and MICRON SEMICONDUCTOR PRODUCTS, INC.

8 9 10

By:

11 12 13 14 15 16 17

/s/ ROBERT E. FREITAS (Bar No. 80948) Email: [email protected] VICKIE L. FEEMAN (Bar No. 177487) Email: [email protected] CRAIG R. KAUFMAN (Bar No. 159458) Email: [email protected] STACY B. MARGOLIES (Bar No. 202360) Email: [email protected] THERESA E. NORTON (Bar No. 193530) Email: [email protected] ORRICK, HERRINGTON & SUTCLIFFE LLP 1000 Marsh Road Menlo Park, CA 94025 Telephone: (650) 614-7400 Facsimile: (650) 614-7401

18 Attorneys for Defendants and Counterclaim Plaintiffs NANYA TECHNOLOGY CORPORATION and NANYA TECHNOLOGY CORPORATION U.S.A.

19 20 21 By: 22 23 24 25 26

/s/ MATTHEW D. POWERS (Bar No. 104795) Email: matthew.powers @weil.com STEVEN S. CHERENSKY (Bar No. 168275) Email: [email protected] WEIL GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 Telephone: (650) 802-3034 Facsimile: (650) 802-3100

27 28 MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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ROBERT S. BEREZIN (Admitted pro hac vice) Email: [email protected] MATTHEW J. ANTONELLI (Admitted pro hac vice) Email: [email protected] WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007

6 7 8

Attorneys for Defendants SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., and SAMSUNG AUSTIN SEMICONDUCTOR, L.P.

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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ATTESTATION CLAUSE REGARDING SIGNATURES

2

Pursuant to General Order No. 45, Section X(B) regarding signatures, I attest under

3

penalty of perjury that I have on file permission to sign for co-counsel indicated by a

4

“conformed” signature (/s/) within this efiled document.

5 /s/ Theodore G. Brown, III

6 7

61696173 v1

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MANUFACTURERS’ OPPOSITION TO RAMBUS INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT RE PATENT EXHAUSTION AFFIRMATIVE DEFENSES – CASE NO. C 05-00334 RMW

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