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I. NEEL CHATTERJEE (STATE BAR NO. 173985) [email protected] DEBORAH E. FISHMAN (STATE BAR NO. 197584) [email protected] ROBERT W. RICKETSON (STATE BAR NO. 148481) [email protected] ORRICK, HERRINGTON & SUTCLIFFE LLP 1000 Marsh Road Menlo Park, CA 94025 Telephone: +1-650-614-7400 Facsimile: +1-650-614-7401 Attorneys for Defendant NVIDIA Corporation

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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RAMBUS, INC., Plaintiff,

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Case No. C-08-03343 SI NVIDIA’S REPLY IN SUPPORT OF MOTION TO STAY

v. NVIDIA CORPORATION,

Date: Time: Judge:

Submitted Without Hearing The Hon. Susan Illston

Defendant.

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TABLE OF CONTENTS

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Page I.

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II. III.

A DISCRETIONARY STAY IS WARRANTED .............................................................. 1 A. The Case Law Supports a Stay ............................................................................... 2 1. NVIDIA Has Met its Burden ...................................................................... 2 2. Rambus’s Legal Citations are Inapposite and Do Not Support Proceeding with its Farmwald Patent Infringement Claims ....................... 3 3. Courts Routinely Issue Discretionary Stays in Analogous Circumstances ............................................................................................. 4 B. The Relevant Factors to be Considered All Weigh in Favor of a Stay ................... 5 1. A Stay Will Not Unduly Prejudice Rambus ............................................... 6 2. NVIDIA Would Be Unduly Prejudiced Were a Stay Not Imposed............ 8 3. A Stay Serves the Interests of Justice and Judicial Efficiency.................... 8 THE PENDENCY OF THE ANTITRUST CASE DOES NOT WARRANT A DIFFERENT RESULT ..................................................................................................... 10 CONCLUSION ................................................................................................................. 12

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TABLE OF AUTHORITIES

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Page

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CMAX, Inc. v. Hall, 300 F.2d 265 (9th Cir. 1962)..................................................................................................... 7

4 5 6

Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059 (9th Cir. 2007)................................................................................................... 2 Hydranautics v. FilmTec Corp., 70 F.3d 533 (9th Cir. 1995)............................................................................................... 10, 11

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Mercoid v. Mid-Continent Investment Co., 320 U.S. 661 (1944) ................................................................................................................ 10 Organon Teknika Corp. v. Hoffmann La Roche, Inc., No. 1:95-CV-865, 1997 U.S. Dist. LEXIS 3798 (M.D.N.C. Feb. 19, 1997)............................ 3

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SanDisk Corp. v. Phison Electronics Corp., 538 F. Supp. 2d 1060 (W.D. Wis. 2008) .................................................................. 2, 5, 7, 8, 9 United States v. Grinnell Corp., 384 U.S. 563 (1966) ................................................................................................................ 11

13 STATE CASES 14 15 16

06-7159 JSW, 2008 WL. 361128 (N.D. Cal. 2008)...................................................................... 3, 5, 6, 7, 8, 9 Alloc, Inc. v. Unilin Decor N.V., 2003 WL. 21640372 (D. Del. July 11, 2003) ........................................................................... 4

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American Honda Motor Co. v. Coast Distrib. Sys., No. CV-06-04752-JSW, 2007 WL. 672521 (N.D. Cal. Feb. 26, 2007).................................... 3 Broadcom Corp. v. Qualcomm Inc., No. 05-468-JVS, 2005 WL. 5925585 (C.D. Cal. Sept. 26, 2005) ........................................ 3, 4

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Flexsys Americas, LP, v. Kumho Tire, U.S.A., Inc., No. 5:05CV156, 2005 WL. 1126750 (N.D. Ohio 2005) .......................................................... 5 Micron Tech., Inc. v. Mosel Vitelic Corp., No. 98-0293-LMB, 1999 WL. 458168 (D. Idaho Mar. 31, 1999) ............................................ 4

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DOCKETED CASES Hynix v.Rambus, No. 00-20905 ............................................................................................................................ 7

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Rambus v. Hynix, No. 05-00334 .......................................................................................................................... 10

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TABLE OF AUTHORITIES (continued) Page

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FEDERAL STATUTES

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28 U.S.C. § 1659 ............................................................................................................................. 1

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19 U.S.C. § 1337 (“Section 337”)................................................................................................... 2

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Fed. R. Civ. P. 13 .......................................................................................................................... 10

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MISCELLANEOUS

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FormFactor, Inc. v. Micronics Japan Co., Ltd., CV-06-7159........................................................ 3

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This motion seeks to stay this patent infringement action brought by plaintiff Rambus, Inc.

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against defendant NVIDIA Corporation until the ITC investigation is concluded or suspended.

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Both parties agree that the Court should stay proceedings on the nine Barth/Ware patents in light

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of Rambus’s concurrent ITC action against NVIDIA. The only issue remaining in dispute is

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whether that stay should extend to all of the patents-in-suit, or only to those that Rambus elected

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to litigate before the ITC. Rambus cannot claim prejudice from its own strategic elections.

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Rather than responding to the issues of prejudice, harm, and inefficiency that would arise

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from litigating two separate but related patent infringement actions against NVIDIA, Rambus

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relies instead on the existence of NVIDIA’s separate antitrust lawsuit to claim prejudice related to

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the patents it chose not to assert in the ITC.1 Rambus’s argument is a non sequitur. NVIDIA’s

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antitrust claims will not likely share issues of infringement, invalidity, and inequitable conduct

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with the patents not asserted in the ITC. Rather, NVIDIA’s antitrust case challenges the very

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essence of Rambus’s business model.

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By contrast, NVIDIA has identified a number of ways in which Rambus’s two patent

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infringement actions on technically related patents will involve related legal issues and both

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related and duplicative discovery. Contrary to Rambus’s protests, the case law supports a stay.

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Because NVIDIA has demonstrated that a stay would promote judicial efficiency, would avoid

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harm to NVIDIA, and will not unduly prejudice Rambus, a stay of the entire patent infringement

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action is warranted.

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I.

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A DISCRETIONARY STAY IS WARRANTED Rambus agrees that the mandatory stay proscribed by 28 U.S.C. § 1659 applies to its

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infringement claims for the Barth/Ware patents. Accordingly, a stay as to those claims should

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issue.

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Rambus also acknowledges that the Court has discretionary power to stay the remainder of its infringement claims, upon a consideration of the same three factors cited in NVIDIA’s

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Rambus incorrectly argues that NVIDIA concedes that its antitrust case is “related” to this patent infringement action. Not so. NVIDIA merely informed the Court that it would not oppose Rambus’s administrative request to relate the two cases. -1-

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opening brief. See Opposition at 5:22-25; Opening Brief at 6:22-7:4. The dispute between the

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parties then is whether, under a proper application of those factors, the Court should impose a

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stay of the patents Rambus chose not to assert in the ITC (i.e., the Farmwald patents).

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A.

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The Case Law Supports a Stay 1.

NVIDIA Has Met its Burden

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As set forth in NVIDIA's opening brief, NVIDIA has met its burden to obtain a stay of the

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entirety of the Rambus patent infringement lawsuit. Rambus incorrectly asserts that NVIDIA has

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a particularly “heavy burden” in seeking a stay on the patents not asserted in the ITC. Rejecting

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the very argument set forth by Rambus, the SanDisk Court observed that no special showing of

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hardship is required under circumstances such as these:

11 [T]he “hardship” requirement laid out by Landis does not apply so broadly. First, the relevant quote, in context, suggests the hardship requirement was aimed at stays that would harm parties to the stayed suit or others who are not parties to a parallel proceeding . . . .[W]hen a parallel proceeding serves as the basis for a stay and the only potential “damage worked” is to parties to both proceedings, there is no need for a party requesting a stay to make a special showing of hardship under Landis. 2

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Rambus next asserts that NVIDIA is seeking an “indefinite” stay, and cites Dependable

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Highway Exp., Inc. v. Navigators Ins. Co., 498 F. 3d 1059 (9th Cir. 2007) for the proposition that

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indefinite stays are to be avoided. In Dependable, a stay had been granted pending completion of

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arbitration proceedings in a foreign country, but even after nearly two years had elapsed, there

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was no indication those proceedings had even commenced, “let alone concluded.” 478 F. 3d at

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1067. Dependable is inapplicable here. NVIDIA is not seeking a stay of indefinite length.

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Rather, NVIDIA seeks only a discretionary stay of the Farmwald patents until the conclusion or

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suspension of the ITC proceedings. Unlike Dependable, the proceedings in the ITC and any

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subsequent appellate proceedings will proceed within the normal rules and typical time frames of

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the ITC and our federal appellate judiciary. The mandate of the ITC is to conclude the

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proceedings expeditiously.3

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2

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SanDisk Corp. v. Phison Electronics Corp., 538 F. Supp. 2d 1060, 1065-66 (W.D. Wis. 2008) (emphasis added). 3 See 19 U.S.C. § 1337 (“Section 337”) -2-

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Rambus’s Legal Citations are Inapposite and Do Not Support Proceeding with its Farmwald Patent Infringement Claims

2 Rambus relies upon four cases that deny requests for stays. Opposition at 6-19: 7-5. As

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explained in the moving papers, none of the four cases Rambus cites would support allowing

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Rambus to proceed with its infringement claims under the Farmwald patents while it is pursuing

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infringement of the Barth/Ware patents in the ITC. Rather, the relevant legal authority supports a

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stay.

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Rambus relies heavily on American Honda Motor Co. v. Coast Distrib. Sys., No. CV-06-

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04752-JSW, 2007 WL 672521 (N.D. Cal. Feb. 26, 2007), but there the party seeking a stay was

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not a party to the pending ITC proceeding. On that basis, the court concluded that section 1659

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“does not apply in this case.” Id. at * 1. Thus, the moving party in American Honda, was not in

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the same position as NVIDIA is here, being forced to defend patent infringement allegations as a

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party in two fora simultaneously based upon the election of the patent holder.

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Notably, the same judge who decided American Honda (Judge Jeffrey White) reached a

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different conclusion in FormFactor, Inc. v. Micronics Japan Co., Ltd., CV-06-7159 JSW, 2008

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WL 361128 (N.D. Cal. 2008), one of the main cases relied upon by NVIDIA. In that case, Judge

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White concluded that a discretionary stay was warranted, where the party seeking the stay was

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faced with simultaneously defending infringement claims in the ITC and in district court, as is the

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case here.

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The second case cited by Rambus, Organon Teknika Corp. v. Hoffmann La Roche, Inc.,

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No. 1:95-CV-865, 1997 U.S. Dist. LEXIS 3798 (M.D.N.C. Feb. 19, 1997), is also inapplicable.

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In Organon Teknika, the parties seeking a discretionary stay were not respondents in the ITC

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proceeding, but rather the patent holders. The patent holders were not facing the burden of

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defending infringement actions in two fora at the same time. The fact that they had voluntarily

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elected to pursue an affirmative claim on another patent in the ITC was held not to justify a

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discretionary stay of the declaratory relief claims against them in the district court.

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Next, Rambus cites Broadcom Corp. v. Qualcomm Inc., No. 05-468-JVS, 2005 WL 5925585 (C.D. Cal. Sept. 26, 2005), contending it also shows that courts will decline to stay -3-

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“issues not before the ITC.” In Broadcom, however, the court actually stayed the entire patent

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action pending completion of the ITC proceeding. In fact, the only issue before the court was

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whether the existence of that stay precluded the court from hearing and deciding a motion to

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enjoin the plaintiff from proceeding with certain other litigation in state court in violation of a

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forum selection clause governing disputes between the parties. Id. at *1. The Broadcom court

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did not address or decide whether to stay litigation on patent infringement issues related to those

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pending in an ITC proceeding. Rather, the court merely concluded it had “jurisdiction to

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maintain its own jurisdiction” to address the forum selection issue. Id.

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Finally, Rambus relies on Micron Tech., Inc. v. Mosel Vitelic Corp., No. 98-0293-LMB,

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1999 WL 458168 (D. Idaho Mar. 31, 1999). But even in Micron, where the court declined to

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enter a complete discretionary stay, it did not allow substantive proceedings on the non-

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overlapping patent claims until completion of the ITC action. 3.

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Courts Routinely Issue Discretionary Stays in Analogous Circumstances

14 NVIDIA’s cited cases demonstrate that courts routinely exercise their discretionary power

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to stay related patents, including under the circumstances presented here. Rambus incorrectly

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claims that the fact that the Farmwald and Barth/Ware patents do not stem from a common patent

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application militates against a stay. Courts, however, consider a variety of factors in assessing the

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propriety of a discretionary stay, including the relatedness of accused products, the relatedness of

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prior art, and the relatedness of the technology.

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Rambus’s attempt to distinguish the authorities cited by NVIDIA falls short. First,

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Rambus asserts that Alloc, Inc. v. Unilin Decor N.V., 2003 WL 21640372 (D. Del. July 11, 2003)

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“had nothing to do with the ITC, or with § 1659.” Opposition at 7:9-11. Rambus is wrong. The

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Alloc court granted a discretionary stay with respect to patents-in-suit that were not the subject of

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an ITC proceeding based in part on the pendency of an appeal of an ITC decision on three related

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patents.4

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Although the stay was sought and granted on the additional basis that a re-examination proceeding on yet another related patent was pending before the PTO, the court made clear that its decision to issue the stay was also grounded in the existence of the appeal of the ITC -4-

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Next, Rambus tries to distinguish FormFactor, SanDisk, and Flexsys Americas, LP, v.

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Kumho Tire, U.S.A., Inc., No. 5:05CV156, 2005 WL 1126750 (N.D. Ohio 2005), based solely on

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the fact that the Farmwald patents are not in the same “family” as the Barth/Ware patents. While

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it is true that courts have pointed to commonalities in specifications and named inventors as

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factors that weigh in favor of a stay, that issue is not the sole fact that courts consider and does

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not dispose of whether the patents are sufficiently related to warrant a stay.

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For example, the SanDisk court pointed to shared prior art among the patents as evidence

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of the relatedness of the issues in dispute. 538 F. Supp. 2d at 1066. Here, Rambus does not

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dispute that the Farmwald patents are prior art to the Barth/Ware patents, and the prior art cited in

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each of the patents overlaps to a high degree.

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Likewise, the FormFactor court observed that a stay was warranted “because of the

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similar technology and products asserted in the patents in both the ITC proceeding and the present

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proceeding.” See 2008 WL 361128 at *2. The SanDisk court also noted that overlap in the

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identity of accused products was a factor that favored stay. 538 F. Supp. 2d at 1066. While

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Rambus may contend that less than 100% of the myriad products charged with infringement here

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are at issue in the ITC, it cannot dispute that the products at issue here and in the ITC are largely

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the same.

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Thus, the close relationship in the nature and technology of the patents involved here, the

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relatedness of the prior art, and the largely overlapping identity of accused products raise all of

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the concerns of efficiency and fairness that have led courts to conclude discretionary stays are

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warranted.

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B.

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The parties agree that the relevant factors in assessing whether to enter a stay are: (1)

The Relevant Factors to be Considered All Weigh in Favor of a Stay

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possible damage which may result from the granting of a stay; (2) the hardship or inequity which

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a party may suffer in being required to go forward, and; (3) the orderly course of justice measured

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proceeding. See Id. at *2 (listing the advantages of waiting for the PTO and noting that, “[s]imilar benefits will likewise flow from the Federal Circuit’s analysis” of the patents involved in the ITC proceeding). Furthermore, the fact that reexamination proceedings involving related patents here as well, makes Alloc all the more applicable.

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in terms of the simplifying or complicating of issues, proof, and questions of law which could be

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expected to result from a stay. FormFactor, 2008 WL 361128 at *1 (quoting CMAX, Inc. v. Hall,

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300 F. 2d 265, 268 (9th Cir. 1962)).

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1.

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A Stay Will Not Unduly Prejudice Rambus

Rambus contends that it will suffer harm from a stay because any delay: (1) may affect the

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availability of evidence and harm its goodwill; and (2) may reduce the availability of injunctive

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relief to Rambus on the Farmwald patents.5 Rambus’s arguments ignore its own decision not to

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enforce its Farmwald patents in its concurrent ITC proceeding as well as Rambus’s own

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significant delay in filing suit.

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First, Rambus argues that any delay in prosecuting its patent infringement action on the

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Farmwald patents may result in the loss of evidence or witnesses and, additionally, that

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NVIDIA’s continued alleged infringement will harm Rambus’s reputation and goodwill. Opp. at

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8. Rambus could have avoided each of these supposed harms had it simply elected to proceed

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with all of its asserted patents (including the Farmwald patents) before the ITC.

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Moreover, any delay arising from a stay of the Farmwald patents would be only

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marginally incremental to the far longer delay that Rambus created by waiting so long to enforce

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any of the Farmwald patents against NVIDIA. The six asserted Farmwald patents, which purport

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to claim an original application date in 1990, issued beginning in 2001. Rambus waited to file a

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patent infringement lawsuit against NVIDIA until July of 2008. While Rambus argues that it

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should not be “penalized” for prelitigation efforts to negotiate a settlement with NVIDIA, it has

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yet to explain why, by its own account, it waited more than six years to file suit. Given

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Rambus’s significant delay in filing suit, it is not reasonable to presume that any degradation in

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the availability of evidence or witness memory will flow from the relatively short period of a stay,

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rather than from the years that passed before Rambus filed suit or even from Rambus’s own

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Rambus also argues that it will suffer prejudice from defending against NVIDIA’s antitrust claims and not being able to simultaneously press its Farmwald patent infringement claims. Opp. at 10. As discussed in Section II below, Rambus’s argument relies on the false premise that these actions are duplicative and ignores the fact that Rambus is proceeding on patent infringement claims before the ITC, but chose not to assert the Farmwald patents there. -6-

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adjudicated destruction of evidence.6 Further, Rambus fails to explain how evidence related to

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the Farmwald patents differs from the evidence it will obtain through the ITC action, where

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discovery is already proceeding.

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Second, Rambus asserts that its goodwill and reputation will suffer from a stay, that the

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royalty rates it can charge others will be depressed, and that it will suffer other similar intangible

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harm. Rambus cannot credibly claim to be in such a position here. Rambus’s vigorous assertion

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of its purported rights is a hallmark of its reputation, and it has supported that reputation by filing

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this action, albeit after long delay. The fact that the action may be stayed does nothing to

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undermine Rambus’s position in that regard. Notably, Rambus has offered no evidence to

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support its contentions of potential harm to goodwill or reputation.

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Third, Rambus contends it will lose the right to obtain meaningful injunctive relief on the

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Farmwald patents if a stay is granted. Rambus’s argument is fundamentally flawed because if

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Rambus wanted injunctive relief on the Farmwald patents, it could have included those patents in

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its ITC proceeding, where a form of such relief would be available much sooner and during the

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life of those patents.7 As Rambus freely admits, the Farmwald patents expire in 2010 and 2011

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and will therefore expire before or soon after any judgment in this action would likely be entered,

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even without a stay.8 Having delayed so long in bringing suit, Rambus cannot be heard to

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complain that the unavailability of injunctive relief caused by any stay constitutes prejudice to

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Rambus. In fact, precisely this argument was considered and rejected by the SanDisk court under

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very similar circumstances:

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Plaintiff is correct that the stay will effectively foreclose any chance of obtaining permanent injunctive relief. However, plaintiff’s chances at meaningful injunctive

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See Hynix v.Rambus, No. 00-20905 RMW, Findings of Fact and Conclusions of Law, Dkt. No. 1577, Finding Nos. 78-81, 103-110. 7

See FormFactor, 2008 WL 361128 at *2 (similarly observing that the patentee had the option of obtaining injunctive relief by including the patents in the ITC proceeding). Moreover, any delay in adjudicating Rambus’s entitlement to damages is insufficient to avoid a stay See CMAX, Inc. v. Hall, 300 F. 2d 265, 269-70 (9th Cir. 1962) (possibility of delayed monetary damages was not sufficient irreparable harm to overturn the stay entered by the district court).

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SanDisk, 538 F. Supp. 2d at 1067. Thus, Rambus has failed to rebut NVIDIA’s showing that a stay will not cause damage or

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relief are already slim because plaintiff waited to file suit until 18 months before expiration of its 1989 patents. Even given the relative speed of this court, if no stay were imposed, plaintiff would probably not receive an injunction for more than one or two months, and then only if nothing delays the proceedings . . . . Even if plaintiff had legitimate business reasons for its delay, neither the court nor the defendants have a duty to accommodate plaintiff’s desire to squeeze what little injunctive value remains from its patents.

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undue prejudice to Rambus. 2.

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NVIDIA Would Be Unduly Prejudiced Were a Stay Not Imposed

Rambus incorrectly argues that the prejudice to a defendant arising from facing

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simultaneous infringement claims on related patents and involving the same products in two fora

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is not a “recognized harm” for purposes of assessing the propriety of a stay. Opposition at 11:5-6.

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As set forth in NVIDIA’s opening brief, district courts confronting the issue of discretionary stay

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have rejected Rambus’s contention.9 As the FormFactor court recognized, while defending one

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lawsuit is not a cognizable hardship or prejudice, defending two lawsuits with overlapping issues

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and discovery is a recognized inequity to be avoided through imposition of a stay. Id.

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Additionally, as shown by SanDisk, where third party rights are not involved, the

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prejudice question reduces to which of the two parties will suffer more. Here, NVIDIA’s interest

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in not being forced to defend against overlapping infringement cases in two places at once

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outweighs any interest Rambus may have in proceeding immediately, when it chose to wait until

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earlier this year bring this action, and then chose to split its claims between two proceedings. 3.

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A Stay Serves the Interests of Justice and Judicial Efficiency

Rambus makes several additional assertions that also fail. First, Rambus contends that

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this Court cannot expect to learn anything from what transpires in the ITC proceeding simply

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because none of the Farmwald patents are being litigated there and the ITC’s decision will not be

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binding in any event, such that this Court will have to examine the issues “anew.” Similar

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arguments have been rejected by the courts. See SanDisk, 538 F. Supp. 2d at 1067 (“It is true that

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9

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See Opening Brief at 6:12-16; see SanDisk, 538 F. Supp. 2d at 1066 (“The proceeding before the commission will address infringement of the same products against the same defendants.”); FormFactor, 2008 WL 361128 at *2-3. -8-

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any decision reached by the International Trade Commission will have no preclusive effect on the

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district court . . . However, the record developed in the proceeding before the commission may be

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used to ‘expedite proceedings and provide useful information to the court.’” ); FormFactor, 2008

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WL 361128 at *3 (“[T]he claims remaining in this action relate to the patents before the ITC

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because they are related to the same device . . . . As a result, the ITC’s interpretation of the

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overlapping patents and the additional patents before it could inform this Court about the claims

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relating to the non-overlapping patents and also narrow the issues in this matter.”).

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Rambus argues that this Court does not stand to benefit from the proceedings now

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pending before Judge Whyte. While it is true only one of the patents that will be tried in January

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of 2009 is identical to the patents asserted here, all of the Farmwald patents in that proceeding

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before Judge Whyte are related to each of the patents asserted here and all share a common parent

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application.10 Thus, the findings and rulings made with respect to invalidity and inequitable

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conduct in that action may significantly narrow the issues in dispute here. In particular, the

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defendants there have asserted inequitable conduct as a defense against each of the Farmwald

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patents at issue in that case and, if successful, the unenforceability of those patents may effect the

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enforceability of the patents at issue here, since all derive from a common parent application.

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Rambus also argues that no weight should be given to the fact that many of the Farmwald

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patents are in re-examination proceedings before the PTO because, it says, it is unclear that any

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claims asserted in this action are the subject of those proceedings and because Judge Whyte

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denied stay requests based on the pendency of the re-exams. But, in fact, two of the patents

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asserted here (the ’696 and ’5,020 patents) are involved in re-examination proceedings before the

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PTO. In the ’5,020 case, where an office action has issued, all of the pending claims of the

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overlapping patent have been rejected.11 Likewise, rejections have issued in many of the 13 other

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Rambus is asserting twelve claims from ten patents at trial in the action before Judge Whyte. See Rambus Inc.’s Election of Patent Claims for Trial (Sept. 4, 2008). All of the asserted patents are descended from abandoned U.S. Patent Application No. 07/510, 898, filed on April 18, 1990.” See Rambus Inc.’s Notice of Motion and Motion for Summary Judgment of No Inequitable Conduct, Rambus v. Hynix, No. 05-00334 RMW, Dkt. No 2437 at 2.

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Fishman Reply Decl.¶ 2, Ex. A. -9-

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pending re-examinations on related Farmwald patents.12 Thus, while Rambus has yet to disclose

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the claims it intends to assert herein, some significant overlap or narrowing of issues in dispute is

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probable. Moreover, Rambus ignores the fact that Judge Whyte denied the stays in the

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consolidated case based on the advanced stage of the proceedings before him at the time the stays

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were sought – more than two years after proceedings commenced, at the close of fact discovery,

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and with less than six months left before trial. Indeed, Rambus argued in its opposition to the

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stay there that “progress of the case is a key factor” in deciding whether to grant a stay.13 By that

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argument, a stay should be granted here, where the case is in its incipiency.

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II.

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THE PENDENCY OF THE ANTITRUST CASE DOES NOT WARRANT A DIFFERENT RESULT Having made the strategic decision to pursue an action in the ITC against NVIDIA and 14

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of its customers, Rambus now claims prejudice for having to defend the antitrust case without

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contemporaneously being able to assert the claims it chose not to raise in the ITC. Rambus’s

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attempt to use the antitrust lawsuit to continue its patent infringement case is without merit for

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two reasons: (1) the patent claims that are the subject of this motion are not a mirror image of

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NVIDIA's antitrust lawsuit and (2) allowing the antitrust case to proceed while staying the patent

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case will allow for greater efficiencies.14

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Antitrust and patent infringement cases are not mirror images. The discovery and proof

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required for the two kinds of claims have substantial differences. As the Ninth Circuit has

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explained, those differences are so significant that Congress established different appellate paths

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for appeals from patent infringement and antitrust cases:

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The evidence for patent infringement and antitrust damages may 12

Fishman Reply Decl.¶ 3.

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Rambus v. Hynix, No. 05-00334 RMW, Rambus’s Consolidated Opp. to Motions for a Stay, Dkt. No. 2077 at 35:6-7.

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14

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Rambus calls NVIDIA’s antitrust claims “counterclaims.” NVIDIA’s antitrust claims are a separate lawsuit and are not brought as compulsory or permissive counterclaims in this action. See Fed. R. Civ. P. 13; Hydranautics v. FilmTec Corp., 70 F. 3d 533, 536 (9th Cir. 1995); Mercoid v. Mid-Continent Investment Co., 320 U.S. 661, 669-71 (1944). - 10 -

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differ considerably, depending on the particulars of the case . . . .

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The distinctiveness between the facts giving rise to the patent and those giving rise to the antitrust claims is suggested by the different appellate paths Congress has provided for those two kinds of claims. Appeals from patent infringement decisions now go to the Federal Circuit, but appeals from antitrust decisions go to the regional circuit in which the district court sits . . . .If the antitrust counterclaim were treated as compulsory, then any appeal of the antitrust decision would go to the Federal Circuit, not the regional circuit. This may generate a difference between the antitrust law generally applicable within each regional circuit, and antitrust law in predatory patent infringement cases. That Congress has provided for regional courts of appeals to decide antitrust appeals, and for the federal circuit to decide patent appeals, suggests that Congress perceived a distinction between the kinds of facts giving rise to one or the other.

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Hydranautics, 70 F. 3d at 536. The facts of this case support the sound analysis of the Ninth Circuit. Rambus’s patent

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infringement claims focus on the technologies NVIDIA uses in its products. NVIDIA’s antitrust

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claims do not. NVIDIA’s antitrust claims focus on Rambus’s business licensing and patent

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prosecution practices before, during, and after its participation in JEDEC. NVIDIA asserts that

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Rambus, an adjudicated monopolist, violated the antitrust laws in obtaining and failing to disclose

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its portfolio of DRAM patents and has abused its monopoly power associated with those patents

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to the detriment of NVIDIA and others. NVIDIA’s antitrust claims are directed at the ways by

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which Rambus obtained and has used its extensive patent portfolio—which includes, but is not

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limited to, the patents-in-suit—to obtain and maintain its market power, not “as a consequence of

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a superior product, business acumen or historical accident,” United States v. Grinnell Corp., 384

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U.S. 563, 571(1966), but rather through unlawful and deceitful conduct.

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As set forth in greater detail in NVIDIA’s First Amended Complaint for antitrust

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violations, Rambus has engaged in a carefully crafted scheme of misappropriation and deception

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to develop a patent portfolio that has provided it with monopoly power with respect to aspects of

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standards-based DRAM technology. It has engaged in coercive licensing practices to exploit and

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grow its monopoly power. Indeed, before Rambus ever filed its patent infringement action

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against NVIDIA, it demanded that NVIDIA either (a) take a worldwide, package license to all of

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Rambus’s patents – whether needed or not – at an excessive rate based upon worldwide sales or - 11 -

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(b) take a worldwide, package license to all of Rambus’s patents at a less excessive rate but

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abandon JEDEC standards-compliance and agree to adopt Rambus’s failed proprietary RDRAM

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interface technology.

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Rambus ignores the fact that a large amount of the groundwork for NVIDIA’s antitrust

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claims already exists. In addition to the FTC’s action against Rambus (see In the Matter of

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Rambus Incorporated, Federal Trade Commission Docket No. 9302), Rambus has faced antitrust

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claims in numerous other cases raising related, but different, forms of exclusionary conduct. The

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cases have established that Rambus is a monopolist in certain technology markets. An enormous

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amount of discovery and trial materials already exist that will streamline and simplify the

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litigation over NVIDIA’s antitrust claims. Rambus presumably has all of those materials. Once a

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Protective Order is in place Rambus can produce those materials electronically and the parties can

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expeditiously litigate the antitrust case.

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The same cannot be said of the patent case—and in particular the Farmwald patents—and

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Rambus does not argue otherwise. No previous lawsuit has placed NVIDIA products at issue.

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None of the discovery from NVIDIA related to the operation of its devices have been discovered,

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and no similar history exists.

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Accordingly, Rambus’s attempt to interlink the antitrust case to the question of whether its

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patent infringement case should go forward in two separate pieces in this Court should be

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rejected. A stay of the infringement case in full should be granted, and does not turn on

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NVIDIA’s antitrust claims.

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III.

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CONCLUSION Rambus elected to split its infringement claims between two fora. It chose to abandon this

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Court and seek relief at the ITC in a piecemeal fashion. The fact that it chose not to assert the

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Farmwald patents and must defend against NVIDIA’s antitrust claims here (after successfully

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///

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moving to transfer) is not a reason to require NVIDIA to defend to related assertions of patent

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infringement in two separate fora. Rambus’s attempt to turn NVIDIA’s antitrust action into a free

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pass to litigate its infringement claims in an inefficient, piecemeal fashion should be denied.

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Dated: December 22, 2008

ORRICK, HERRINGTON & SUTCLIFFE LLP

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/s/ Deborah E. Fishman /s/ DEBORAH E. FISHMAN Attorneys for Defendant NVIDIA CORPORATION

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OHS West:260571024.3

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