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Case 5:05-cv-00334-RMW
Document 3124
Weil, Gotshal
&
Filed 01/19/2009
Page 1 of 3
Manges llp
AUSTIN BEIJING
201 REDWOOD SHORES PARKWAY REDWOOD SHORES, CA
BOSTON
94065
BUDAPEST
(650) 802-3000 FAX:
(650) 802-3100
DALLAS FRANKFURT HONG KONG HOUSTON LONDON MIAMI MUNICH NEW YORK
D I R E C T LI N E
650-802-3126
PARIS
[email protected]
January 19, 2009
PRAGUE PROVIDENCE SHANGHAI WARSAW WASHINGTON, D.C.
VIA E-FILING AND E-MAIL Hon. Ronald M. Whyte United States District Court 280 So. 1st Street San Jose, CA 95113 Re:
Rambus Inc. v. Hynix Semiconductor Inc., et al. C 05-00334 RMW Rambus Inc. v. Micron Technology, Inc., et al. C 06-00244 RMW Rambus Inc. v. Samsung Electronics Co., Ltd., et al., C 05-002298
Your Honor: This letter is submitted on behalf of Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., and Samsung Austin Semiconductor, L.P. (“Samsung”) to address the proper procedure in the event that the Court does not give preclusive effect to the Delaware Court’s ruling or otherwise does not dismiss Rambus’s patent claims as a result of it or the September trial. Samsung submits that the most efficient path for the judicial system and the parties is quite clear – a host of difficult, pivotal issues ripe for appeal must be resolved before multiple patent trials are held. Specifically, after the Court resolves the Manufacturers’ dispositive motions, it should stay the two or three multi-party patent trials presently contemplated and then invoke the appropriate procedures to enable the Federal Circuit to review and decide: (a) whether Rambus’s patent claims are barred based on unlawful spoliation and unclean hands (including by virtue of collateral
SV1:\305216\01\6J$801!.DOC\71868.0036
Case 5:05-cv-00334-RMW
Document 3124
Filed 01/19/2009
Page 2 of 3
Weil, Gotshal & Manges LLP
Hon. Ronald M. Whyte January 19, 2009 Page 2
estoppel); (b) whether the Court’s claim construction is correct; (c) any appealable issues that may arise from the Court’s decision in the September trial of Samsung’s contract counterclaims and equitable defenses; (d) other appealable issues from the Hynix I trial (to which Samsung obviously is not a party); and (e) appeals from the January conduct trial. This course of action is the proper one for a number of reasons. First, the outcome of the appeal will either moot the trials, ensure that they will not need to be repeated or facilitate a consensual resolution of the dispute between Rambus and the Manufacturers. For example, if Samsung prevails on its unclean hands defense, then there is nothing left for trial, Rambus’s patent-infringement claims will be dismissed and all matters that the Court has decided as to the dispute between Rambus and Samsung can then be appealed by Rambus. In contrast, if Samsung does not prevail on the unclean hands/spoliation issue, then it would be wasteful, inefficient and prejudicial to proceed without pausing for appeal to try the remaining two patent trials. The conflict with respect to the spoliation issue between this Court and two other United States District Courts demands a speedy resolution before further trials are held with their attendant costs in the several millions of dollars. Indeed, Samsung respectfully submits that there is a meaningful possibility that a finding by this Court against Samsung on the spoliation/unclean hands issue will be reversed by the Federal Circuit based on the law of collateral estoppel or the appropriate standard to determine when documents must be preserved in the spoliation context. Thus, interests of judicial economy would not be furthered by proceeding with trial on all issues now regardless of how the Court resolves the pending collateral estoppel motions. Indeed, if the Court is reversed, then the trials will be unnecessary. If the Court is not reversed on the unclean hands/spoliation issue, then the resolution of other key issues such as claim construction will ensure that the trials will not be held in vain. Second, a stay and immediate appeal not only will avoid a significant cost to the judicial system and the parties, but it also will eliminate or minimize the potential for inconsistent outcomes that may well be unwarranted. This is so because an immediate appeal makes it possible to coordinate a multiparty, and potentially a crossjurisdictional (i.e., the Delaware case), appeal to the Federal Circuit of the same or similar issues. Likewise, any differences in the outcome of the unclean hands/spoliation issue, coupled with a decision not to stay the patent trials pending appeal, could impose dramatically different costs on certain manufacturers that must incur trial and appellate costs in this extraordinary economic climate to await vindication and equal treatment. Third, if the patent trials proceed before appeal, and even if Rambus were to prevail, Rambus would be entitled only to monetary damages and no injunction would
SV1:\305216\01\6J$801!.DOC\71868.0036
Case 5:05-cv-00334-RMW
Document 3124
Filed 01/19/2009
Page 3 of 3
Weil, Gotshal & Manges LLP
Hon. Ronald M. Whyte January 19, 2009 Page 3
be appropriate. Even in the very unlikely event of an injunction, it should certainly be stayed pending appeal in light of, among other things, the Court’s comments regarding the closeness of the invalidity issues, the pending reexaminations, the different outcomes in different courts on the spoliation issue, and other prudential considerations. Accordingly, as discussed at the January 14 hearing, an efficient pause in the proceedings at the trial court level occasioned by an immediate appeal will not prejudice Rambus as it can be adequately compensated. Finally, although for the reasons stated Samsung strongly believes that the option described above is the correct one, if the Court decides to stay the litigation as to Micron (which was referred to as “option b”), then the same result should obtain for Samsung. Samsung, like Micron, is a defendant in this action and has invoked collateral estoppel defensively against Rambus’s patent infringement claims. Samsung, like Micron, was a party to an action with Rambus (i.e., in the Eastern District of Virginia), in which Samsung and Rambus litigated the unclean hands/spoliation issue – and Samsung prevailed. Samsung’s case for a stay is even more compelling because Rambus terminated consensual negotiations and Samsung’s license, and initiated this costly and unnecessary litigation, in an overt (and successful) exercise in blatant forum shopping. The precise mechanism to achieve the result recommended above will depend on how the Court resolves the expected Micron, Hynix, and Nanya motions, and what transpires next in Delaware, and Samsung believes that it may be premature to specify the precise mechanism at this time. For example, a motion pursuant to Fed. R. Civ. Pro. 54(b) or 28 U.S.C. 1292(b) may be appropriate. Samsung believes that the proper procedural mechanism should probably be determined after this Court rules on the pending motions and after it is determined how Micron and Rambus will proceed in Delaware. Samsung, of course, will be prepared to further discuss these issues and how best to proceed following the Court’s ruling on the pending spoliation motions at the January 30 hearing. Respectfully submitted /s/ Steven Cherensky Steven Cherensky
SV1:\305216\01\6J$801!.DOC\71868.0036
Document 3124
Weil, Gotshal
&
Filed 01/19/2009
Page 1 of 3
Manges llp
AUSTIN BEIJING
201 REDWOOD SHORES PARKWAY REDWOOD SHORES, CA
BOSTON
94065
BUDAPEST
(650) 802-3000 FAX:
(650) 802-3100
DALLAS FRANKFURT HONG KONG HOUSTON LONDON MIAMI MUNICH NEW YORK
D I R E C T LI N E
650-802-3126
PARIS
[email protected]
January 19, 2009
PRAGUE PROVIDENCE SHANGHAI WARSAW WASHINGTON, D.C.
VIA E-FILING AND E-MAIL Hon. Ronald M. Whyte United States District Court 280 So. 1st Street San Jose, CA 95113 Re:
Rambus Inc. v. Hynix Semiconductor Inc., et al. C 05-00334 RMW Rambus Inc. v. Micron Technology, Inc., et al. C 06-00244 RMW Rambus Inc. v. Samsung Electronics Co., Ltd., et al., C 05-002298
Your Honor: This letter is submitted on behalf of Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., and Samsung Austin Semiconductor, L.P. (“Samsung”) to address the proper procedure in the event that the Court does not give preclusive effect to the Delaware Court’s ruling or otherwise does not dismiss Rambus’s patent claims as a result of it or the September trial. Samsung submits that the most efficient path for the judicial system and the parties is quite clear – a host of difficult, pivotal issues ripe for appeal must be resolved before multiple patent trials are held. Specifically, after the Court resolves the Manufacturers’ dispositive motions, it should stay the two or three multi-party patent trials presently contemplated and then invoke the appropriate procedures to enable the Federal Circuit to review and decide: (a) whether Rambus’s patent claims are barred based on unlawful spoliation and unclean hands (including by virtue of collateral
SV1:\305216\01\6J$801!.DOC\71868.0036
Case 5:05-cv-00334-RMW
Document 3124
Filed 01/19/2009
Page 2 of 3
Weil, Gotshal & Manges LLP
Hon. Ronald M. Whyte January 19, 2009 Page 2
estoppel); (b) whether the Court’s claim construction is correct; (c) any appealable issues that may arise from the Court’s decision in the September trial of Samsung’s contract counterclaims and equitable defenses; (d) other appealable issues from the Hynix I trial (to which Samsung obviously is not a party); and (e) appeals from the January conduct trial. This course of action is the proper one for a number of reasons. First, the outcome of the appeal will either moot the trials, ensure that they will not need to be repeated or facilitate a consensual resolution of the dispute between Rambus and the Manufacturers. For example, if Samsung prevails on its unclean hands defense, then there is nothing left for trial, Rambus’s patent-infringement claims will be dismissed and all matters that the Court has decided as to the dispute between Rambus and Samsung can then be appealed by Rambus. In contrast, if Samsung does not prevail on the unclean hands/spoliation issue, then it would be wasteful, inefficient and prejudicial to proceed without pausing for appeal to try the remaining two patent trials. The conflict with respect to the spoliation issue between this Court and two other United States District Courts demands a speedy resolution before further trials are held with their attendant costs in the several millions of dollars. Indeed, Samsung respectfully submits that there is a meaningful possibility that a finding by this Court against Samsung on the spoliation/unclean hands issue will be reversed by the Federal Circuit based on the law of collateral estoppel or the appropriate standard to determine when documents must be preserved in the spoliation context. Thus, interests of judicial economy would not be furthered by proceeding with trial on all issues now regardless of how the Court resolves the pending collateral estoppel motions. Indeed, if the Court is reversed, then the trials will be unnecessary. If the Court is not reversed on the unclean hands/spoliation issue, then the resolution of other key issues such as claim construction will ensure that the trials will not be held in vain. Second, a stay and immediate appeal not only will avoid a significant cost to the judicial system and the parties, but it also will eliminate or minimize the potential for inconsistent outcomes that may well be unwarranted. This is so because an immediate appeal makes it possible to coordinate a multiparty, and potentially a crossjurisdictional (i.e., the Delaware case), appeal to the Federal Circuit of the same or similar issues. Likewise, any differences in the outcome of the unclean hands/spoliation issue, coupled with a decision not to stay the patent trials pending appeal, could impose dramatically different costs on certain manufacturers that must incur trial and appellate costs in this extraordinary economic climate to await vindication and equal treatment. Third, if the patent trials proceed before appeal, and even if Rambus were to prevail, Rambus would be entitled only to monetary damages and no injunction would
SV1:\305216\01\6J$801!.DOC\71868.0036
Case 5:05-cv-00334-RMW
Document 3124
Filed 01/19/2009
Page 3 of 3
Weil, Gotshal & Manges LLP
Hon. Ronald M. Whyte January 19, 2009 Page 3
be appropriate. Even in the very unlikely event of an injunction, it should certainly be stayed pending appeal in light of, among other things, the Court’s comments regarding the closeness of the invalidity issues, the pending reexaminations, the different outcomes in different courts on the spoliation issue, and other prudential considerations. Accordingly, as discussed at the January 14 hearing, an efficient pause in the proceedings at the trial court level occasioned by an immediate appeal will not prejudice Rambus as it can be adequately compensated. Finally, although for the reasons stated Samsung strongly believes that the option described above is the correct one, if the Court decides to stay the litigation as to Micron (which was referred to as “option b”), then the same result should obtain for Samsung. Samsung, like Micron, is a defendant in this action and has invoked collateral estoppel defensively against Rambus’s patent infringement claims. Samsung, like Micron, was a party to an action with Rambus (i.e., in the Eastern District of Virginia), in which Samsung and Rambus litigated the unclean hands/spoliation issue – and Samsung prevailed. Samsung’s case for a stay is even more compelling because Rambus terminated consensual negotiations and Samsung’s license, and initiated this costly and unnecessary litigation, in an overt (and successful) exercise in blatant forum shopping. The precise mechanism to achieve the result recommended above will depend on how the Court resolves the expected Micron, Hynix, and Nanya motions, and what transpires next in Delaware, and Samsung believes that it may be premature to specify the precise mechanism at this time. For example, a motion pursuant to Fed. R. Civ. Pro. 54(b) or 28 U.S.C. 1292(b) may be appropriate. Samsung believes that the proper procedural mechanism should probably be determined after this Court rules on the pending motions and after it is determined how Micron and Rambus will proceed in Delaware. Samsung, of course, will be prepared to further discuss these issues and how best to proceed following the Court’s ruling on the pending spoliation motions at the January 30 hearing. Respectfully submitted /s/ Steven Cherensky Steven Cherensky
SV1:\305216\01\6J$801!.DOC\71868.0036
