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Case 5:06-mc-80024-JW
Document 9
Filed 03/07/2006
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IRELL & MANELLA LLP Alexander F. Wiles (73596) 2 Ellisen S. Turner (224842) Trevor V. Stockinger (226359) 3 1800 Avenue of the Stars, Suite 900 Los Angeles, California 90067-4276 4 Telephone: (310)277-1010 tstockinger@irell . com 5 ATTORNEYS FOR PLAINTIFF 6 TESSERA, INC.
7 8
UNITED STATES ]
9
NORTHERN DISTRI
10
SAN JOSE
11 TESSERA, INC.,
Case No. CV 06-80024-MISC-JW (PVT)
12
[Civil Action No. 2-05cv-94, E.D. Tex .]
13 14 15 16 17 18 19
) ) Plaintiff, ) ) vs. ) ) MICRON TECHNOLOGY, INC., a Delaware ) corporation, MICRON SEMICONDUCTOR ) PRODUCTS, INC., an Idaho corporation, ) INFINEON TECHNOLOGIES AG, a German ) corporation, INFINEON TECHNOLOGIES ) RICHMOND, LP, a Delaware corporation, and ) INFINEON TECHNOLOGIES NORTH ) AMERICA CORP., a Delaware corporation, ) .) Defendants. ) )
TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC. Date: March 21,2006 Time: 10:00 am Ctrm: Five Honorable Patricia V. Trumbull
20 21 22 23 24 25 26 27 28 1RELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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INTRODUCTION
Tessera seeks an order compelling Hynix to produce documents that fall within three
2
3 specific categories of documents - categories that have been further narrowed during the parties' 4 meet and confer discussions. Tessera demonstrated in its moving papers that it is entitled to the 5 order it seeks. Nothing in Hynix's opposition undercuts that showing.
6
The three categories request relevant documents, are narrowly drawn, and do not impose
7 an undue burden on Hynix. First, Tessera requested documents that Hynix already produced in
8 the three litigations specifically referenced in its subpoena. Hynix maintains these documents in 9 an electronic database and has presumably already reviewed them for privilege and confidentiality 10 concerns. (See Stockinger Declaration in Support Tessera's Motion to Compel, Exhibit ("Mot. 11 Ex.") 7 at 2.) It would have been no burden whatsoever simply for Hynix to copy the databases to 12 a hard drive and produce them. Nonetheless, Hynix refused to do so. Instead, Hynix proposed to 13 produce a subset of these documents based on a list of search terms. In an attempt to 14 accommodate this request, Tessera proposed a list of terms to Hynix. (Mot. Ex. 6.) Hynix 15 rejected this list. (Mot. Ex. 7.) Then, without securing Tessera's agreement to any set of search 16 terms, Hynix collected documents based on its own unilateral limitation of search terms, and 17 apparently took upon itself to re-review those documents to further limit the production.
18 (Slenkovich Declaration in Support of Hynix's Opposition to Tessera's Motion to Compel 19 ("Slenkovich Decl."), Ex. F.) In its opposition, Hynix claims that this self-imposed and totally 20 unnecessary process is so burdensome that the Court should accept Hynix's limited production. 21 The Court should reject Hynix's argument. If the process of culling the previously produced 22 documents is burdensome, then the Court should simply order Hynix to do what the subpoena 23 requests - produce all documents that Hynix previously produced in the three named litigations. Hynix's complaints as to the second and third categories - requesting documents relating
24
25 to Tessera and Tessera technology, and communications and presentations relating to packaging 26 technology used in DRAM - are also not well-taken. Tessera explained to Hynix during the meet 27 and confer process that, as to the second category, it is only seeking documents reflecting
28 communications with third parties relating to Tessera or Tessera technology. (See Stockinger IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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Declaration in Support of Reply In Support of Tessera's Motion to Compel ("Stockinger Decl.") at
2 f2; Tessera's Motion to Compel ("Mot.") at 8:7-12.) Tessera even clarified the term "Tessera 3 technology" for Hynix, a term it should understand fully considering that it is a licensee of 4 Tessera's technology. (Mot. Ex. 6.) And, the third category should not need narrowing. It seeks 5 documents directly relevant to this case. Tessera claims that the defendants and other DRAM 6 manufacturers, including Hynix, conspired to boycott Tessera's packaging technology for use in 7 DRAM. Communications and presentations relating to packaging technology used in or 8 considered for use in DRAM will provide evidence of Hynix's and other DRAM manufacturers' 9 packaging plans, evidence at the heart of Tessera's claims. 10
In addition, Hynix should not be allowed to withhold documents in the possession of its
11 Korean parent. It has already admitted that its American subsidiary has control over the parent's 12 documents for litigation purposes and the case law, which Hynix agrees applies, supports a finding 13 of control. Hynix's opposition is meritless, and Tessera's motion to compel should be granted. 14
Finally, this Court should deny Hynix's request for reimbursement of $70,000 in costs -
15 which appear to be mainly attorneys' fees. These fees were incurred because of Hynix's unilateral 16 decision to unnecessarily re-review documents previously produced in prior litigations in an effort 17 to limit documents it would provide to Tessera. Tessera did not request this; it was willing to take 18 on the burden of reviewing all the prior litigation documents itself. 19 II.
ARGUMENT
20
A.
21
Each of Tessera's document requests at issue is narrowly tailored, clear and not
Tessera's Document Requests Are Narrowly Tailored And Not Burdensome
22 burdensome. Tessera's first request for documents Hynix produced in specific previous litigations 23 is not burdensome at all. Hynix could simply copy the documents it has stored on electronic 24 databases onto hard drives or DVD-ROMS and provide those hard drives or DVD-ROMs to 25 Tessera. Tessera's second request for documents relating to Tessera and Tessera technology has 26 been narrowed through meet and confer sessions to include only communications with third 27 parties. Further, Hynix, a licensee of Tessera's technology, should understand the term, "Tessera 28 technology." Finally, Tessera's third request for presentations and communications relating to IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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packaging used in DRAM goes to the heart of Tessera's claims that defendants and other DRAM
2 manufacturers attempted to boycott Tessera and its technology in order to destroy Tessera's ability 3 to act as a licensor to manufacturers of synchronous DRAM chips.
1.
4 5
Hynix Faces No Burden in Responding to the First Request
There is no burden on Hynix to provide to Tessera documents previously produced in other
6 legal proceedings. Hynix stores these documents in electronic databases, and has already
7 produced them in previous actions. (See generally Mot. Ex. 7.) To comply with the subpoena, 8 Hynix simply needed to copy these databases to DVD-ROMs or hard drives and send them to 9 Tessera. Instead, Hynix took upon itself a far more burdensome process. It unilaterally elected to 10 search for only those documents containing certain terms of its own choosing, apparently re11 reviewed the documents before producing them, and now seeks to make Tessera pay for a process 12 to which Tessera never agreed. (Slenkovich Decl. at ^flO & Ex. F.) 13
Even Hynix's justification for rejecting the terms Tessera proposed is senseless. For
14 instance, it claims that terms like the defendants' names, Micron and Infineon, would have 15 resulted in the production of documents "having nothing to do with ... the issues involved in 16 Tessera's actions."1 (Opp. at 3.) Hynix cannot avoid discovery by claiming a burden it has placed 17 on itself, particularly when the sole aim of Hynix's efforts appears to have been to improperly 18 limit the production to Tessera. Hynix does not get to pick and choose what it will produce in 19 response to a valid subpoena. 20
All documents Hynix produced in previous antitrust-related proceedings are relevant - not
21 just a subset of Hynix's choosing. Tessera's complaint cites directly from the publicly released 22 documents from the FTC investigation. The documents produced in the DOJ investigation are 23 also relevant. Hynix asserts that these documents are not relevant because its plea agreement 24 excluded RDRAM. (Opp. at 4.) Regardless of the specifics of Hynix's plea, however, the DOJ's 25 26
Further, Hynix makes much of the fact that Tessera has not taken its Motion off calendar, even though Hynix has not produced documents according the original compromise Tessera offered 27 (see Ex. 6), and further refused to run additional searches in order to potentially remedy the fact that Hynix cannot electronically search documents produced in the FTC investigation. (Mot. Ex. 7 28 at 2; Stockinger Decl. at |3.) 1RELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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price-fixing investigation did not exclude RDRAM, and includes the same conspirators involved
2 in the conspiracy against Tessera over the same time frame. 3
And, Tessera's request for documents produced in previous legal actions is appropriately
4 limited to relevant proceedings. (See Opp. at 6.) Tessera only requests documents from "antitrust5 related" legal proceedings. The request goes on to specifically list cases of which Tessera is aware 6 relating to Hynix's anticompetitive conduct - the FTC investigation entitled In re Rambus 7 Incorporated, the DOJ investigation of Hynix's anticompetitive conduct in the DRAM industry, 8 and the state and federal class actions spawned by the DOJ investigation. Hynix has not revealed 9 additional cases in which it is involved, and Tessera has not sought, during the meet and confer 10 process, documents from any other litigations. Moreover, contrary to Hynix's assertion, Tessera 11 explained to Hynix that it is only seeking documents produced by Hynix itself m previous legal 12 proceedings. (See Opp. at 5-6; Stockinger Decl. at ^2; Mot. Ex. 9.) 13
2.
14
Hynix Understands the Clear Terms in the Second Request
The second of Tessera's requests, which simply asks for documents concerning Tessera
15 and Tessera technology, is clear. Hynix baselessly objects, claiming it cannot understand the term 16 "Tessera technology." (Opp. at 6-7.) As Hynix is well-aware, however, Tessera's technology is 17 commonly known by its trademark, uBGA or microBGA. Hynix has licensed Tessera technology 18 and presumably knows in detail what it licensed. In fact, pursuant to that license, several of 19 Hynix's employees were trained in implementing that technology and received confidential 20 information relating to it. Moreover, through the meet and confer process, Tessera further clarified 21 the meaning of Tessera technology by providing Hynix's counsel with a list of terms it could use 22 to search for documents responsive to this request. (Mot. Ex. 6.) 23
hi addition, Hynix has sought to narrow the request to eliminate responsive documents if
24 those documents were not produced by Hynix in other antitrust litigations. The request is not so 25 limited. Contrary to its representation in its opposition that Hynix offered to produce documents 26 concerning Tessera (Opp. at 7), Hynix has never agreed to produce any documents outside of 27 those already produced in previous legal proceedings. Even if documents responsive to Tessera's 28 IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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second request were not produced to the FTC or DOJ, they are relevant to the lawsuit and should
2 be produced. 3
3.
4
Tessera's Third Request Is Narrowly Tailored and Proper
Tessera's third request seeks Hynix presentations and communications relating to
5 packaging technology used in DRAM. Such a request is relevant and appropriately limited.
6 Hynix's assertion otherwise is baseless. (See Opp. at 7.) 7
First, the request does limit the type of documents sought to communications and
8 presentations, thereby excluding, for example, internal technical and engineering documents
9 regarding packaging technology. Further, the request limits the subject matter of these documents 10 to packaging technology used in DRAM, as opposed to that used in other kinds of computer chips 11 like FLASH chips or microprocessors. 12
These limitations are narrowly tailored to specifically address the issues central to
13 Tessera's claims. Tessera alleges that Micron and Infineon conspired with other DRAM 14 manufacturers, like Hynix, to boycott Tessera's packaging technology. (See, e.g., Mot. Ex. 16 at ][ 15 4.) Communications and presentations relating to the packaging technology Hynix considered for 16 use in DRAM chips are likely to contain evidence of Hynix's (and potentially other DRAM 17 manufacturers') packaging plans, their preferences for various packaging technology, and their 18 reasons for using one type of technology over another. In short, these documents go to the central 19 issue in this case: whether DRAM manufacturers had legitimate or anticompetitive reasons for not 20 choosing Tessera technology. 21
B.
22
Contrary to Hynix's assertion (Mot. at 8), Tessera need not show that "Hynix has control
Hynix Must Produce HSI Documents In Its Control
23 over HSI," Hynix's Korean Parent, in order for this Court to find that Hynix has control over the 24 documents in HSI's possession. GerlingInt'lInsur. Co. v. IRS, 839 F.2d 131, 141 (3rd Cir. 1988) 25 ("[w]here the relationship is such that the agent-subsidiary can secure documents of the principal26 parent to meet its own business needs ..., the courts will not permit the agent subsidiary to deny 27 control for purposes of discovery.") (See Mot. at 11-13.) 28 1RELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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There is no serious dispute that Hynix has control over the requested HSI documents -
2 Hynix has admitted as much: "Nevertheless, as a compromise on this issue, we would be willing 3 to produce to Tessera documents originating from HSI which have already been produced, 4 whether in response to discovery or through other agreements, within the litigation referenced in 5 your letter." (Mot. Ex. 7 at 1; see Mot. at 11.)
6
Moreover, Hynix agrees that the case at bar is "most similar" to a case Tessera cited in
7 support of its position, Choice-Intersil Microsystems, Inc. v. Agere Sys., Inc., 224 F.R.D. 471 8 (N.D. Cal. 2004). (Opp. at 8; see Mot. at 8.) Hynix concedes that the Court in Choice-Intersil
9 "found that the subsidiary had the ability to obtain a limited amount of documents relating to the 10 marketing and technical development of a specific product and ordered that limited production." 11 (Opp. at 8.) Hynix ignores the broader holding in that case, however. 12
The Court in that case found that Infineon NA, a wholly-owned subsidiary of Infineon AG,
13 a German corporation, was able to obtain, upon demand, high-level marketing documents from 14 and shared document databases with Infineon AG. Choice-Intersil, 224 F.R.D. at 472-73. Based 15 on this finding, the Court held that, because Infineon NA had control over one type of document 16 relating to a specific product, it also had control over other types of documents relating to that 17 product. 18
[SJince Infineon NA had the apparent ability to obtain high level documents relating to the marketing of the product, it could also obtain documents relating to the technical development of the product if it chose to request them from Infineon AG.
19 20 Id. 21
This holding governs here. HSI owns 96.7 percent of HSA. Hynix's website confirms that
22 HSA provides "sales, marketing and distribution" of Hynix's semiconductor products, including 23 DRAM, and is further involved in research and development of these products - including, 24 significantly, packaging technology. (Mot. at 12.) HSA therefore must be able to obtain 25 documents on these subjects from Hynix upon demand. Tessera requests documents relating 26 directly to these issues - DRAM and packaging technology. Since HSA has control of these HSI 27 documents for business purposes, it should not be permitted to deny that control for discovery 28 purposes. IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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C.
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This Court Should Deny Hynix's Request For Unnecessarily Incurred Fees And Costs
3
Hynix has no basis for seeking $70,000 in fees and costs from Tessera. In purported
4 support for reimbursement, Hynix cites to a single case for the proposition that a nonparty "should 5 not be forced to subsidize an unreasonable share of the costs of litigation to which they are not a
6 party." United States v. Columbia Broadcasting Sys., Inc., 666 F.2d 364, 371 (9th Cir. 1982). 7 Tessera did not require Hynix to incur $70,000 in fees and costs. Hynix apparently instructed its
8 counsel to re-read documents that already had been produced in prior actions before producing 9 them to Tessera. That was Hynix's choice. Tessera should not have to pay for this choice - it was 10 unnecessary for Hynix to do so to comply with the subpoena. Any "unreasonable" costs borne by 11 Hynix were the direct result of its converting a simple task into a burdensome one. 12
Tessera requested production of all documents that Hynix previously produced in three
13 specific antitrust-related proceedings. Hynix admittedly keeps these documents in electronic 14 databases. (See Mot. Ex. 7.) It could have simply copied these databases onto DVD-ROMs or 15 hard drives and produced them, thereby fully complying with the first document request. Instead, 16 in order to avoid full compliance, Hynix sought to limit the production through electronic searches 17 for documents containing certain terms - terms to which Tessera never agreed. (Mot. Ex. 7 & 8; 18 Slenkovich Decl., Ex. F.) It then re-reviewed documents that had previously been produced in 19 other matters and that presumably had already been reviewed for privilege and confidentiality 20 issues. (Slenkovich Decl. at ^| 10.) Hynix unilaterally converted a simple re-production into a 21 massive endeavor - and now it unreasonably wants Tessera to pay for it. See Zubulake v. UBS 22 Warburg LLC, 217 F.R.D. 309, 317 (S.D.N.Y. 2003) ("The Supreme Court has instructed that the 23 presumption is that the responding party must bear the expense of complying with discovery 24 requests. Any principled approach to electronic evidence must respect this presumption." (internal 25 quotation and alteration omitted)).
Moreover, judging from Hynix's counsel's explanation that Hynix incurred "costs of over
26
27 $70,000 in fees related to this effort" (Slenkovich Decl. at T}10), it appears Hynix is really seeking 28 reimbursement for attorneys' fees. Yet, the District Court on remand from the very case Hynix IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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cites in alleged support of its position clearly held: "The Nonparty Witnesses will not be allowed
2 to recover the costs incurred in retaining outside counsel. The 'American Rule' on attorneys' fees 3 is that each party must bear the burden of his own attorneys' fees." United States v. CBS, Inc., 4 103 F.R.D. 365, 374 (C.D. Cal. 1984). Tessera will agree to pay the cost of copying the electronic 5 documents onto DVD-ROMs produced to Tessera. That is the only cost Tessera should be
6 required to bear. 7 III.
CONCLUSION
8
This Court should grant Tessera's motion to compel and deny Hynix's request for
9 reimbursement. 10 11 12 13
Respectfully submitted,
14 Dated: March 7, 2006
IRELL & MANELLA LLP
15 16
By:
EHip€n S. Turner
17
/
18
^Attorneys for Plaintiff Tessera, Inc.
19 20 21 22 23 24 25 26 27 28 IRELL & MANELLA LLP A Registered Limited Liability Law Partnership including Professional Corporations
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PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is 1800 Avenue of the Stars, Suite 900, Los Angeles, California 90067-4276. On March 7, 2006,1 served the foregoing document described as: TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC. DECLARATION OF TREVOR V. STOCKINGER IN SUPPORT OF REPLY IN SUPPORT OF MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC. on each interested party, as follows: 10 Keith Slenkovich Thelen Reid & Priest LLP 11 225 West Santa Clara Street, Suite 1200 San Jose, CA 95113 12 [email protected]
Alexis Gorton Kirkland & Ellis LLP 153 East 53rd Street New York, NY 10022-4611 [email protected]
13 Arthur P. Licygiewicz Jones Day 14 North Point 901 Lakeside Avenue 15 Cleveland, OH 44114 [email protected] 16 " 17
(BY OVERNIGHT DELIVERY SERVICE) I served the foregoing document by FedEx, an express service carrier which provides overnight delivery, as follows. I placed a true copy of the foregoing document in sealed envelopes or packages designated by the express service carrier, addressed, as set forth above, with fees for overnight delivery paid or provided for.
18 19 20
(BOX DEPOSIT) I deposited such envelopes or packages in a box or other facility regularly maintained by the express service carrier.
21 22 23
(BY ELECTRONIC MAIL) I caused the foregoing document to be served electronically by electronically mailing a true and correct copy through Irell & Manella LLP's electronic mail system to the e-mail address(es), as set forth above, and the transmission was reported as complete and no error was reported.
„
24
Executed on March 7, 2006, at Los Angeles, California.
25
I declare under penalty of perjury that the foregoing js true and correct.
26
Lisa M. Siegel ([email protected]) (Type or print name) 28
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1
IRELL & MANELLA LLP Alexander F. Wiles (73596) 2 Ellisen S. Turner (224842) Trevor V. Stockinger (226359) 3 1800 Avenue of the Stars, Suite 900 Los Angeles, California 90067-4276 4 Telephone: (310)277-1010 tstockinger@irell . com 5 ATTORNEYS FOR PLAINTIFF 6 TESSERA, INC.
7 8
UNITED STATES ]
9
NORTHERN DISTRI
10
SAN JOSE
11 TESSERA, INC.,
Case No. CV 06-80024-MISC-JW (PVT)
12
[Civil Action No. 2-05cv-94, E.D. Tex .]
13 14 15 16 17 18 19
) ) Plaintiff, ) ) vs. ) ) MICRON TECHNOLOGY, INC., a Delaware ) corporation, MICRON SEMICONDUCTOR ) PRODUCTS, INC., an Idaho corporation, ) INFINEON TECHNOLOGIES AG, a German ) corporation, INFINEON TECHNOLOGIES ) RICHMOND, LP, a Delaware corporation, and ) INFINEON TECHNOLOGIES NORTH ) AMERICA CORP., a Delaware corporation, ) .) Defendants. ) )
TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC. Date: March 21,2006 Time: 10:00 am Ctrm: Five Honorable Patricia V. Trumbull
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INTRODUCTION
Tessera seeks an order compelling Hynix to produce documents that fall within three
2
3 specific categories of documents - categories that have been further narrowed during the parties' 4 meet and confer discussions. Tessera demonstrated in its moving papers that it is entitled to the 5 order it seeks. Nothing in Hynix's opposition undercuts that showing.
6
The three categories request relevant documents, are narrowly drawn, and do not impose
7 an undue burden on Hynix. First, Tessera requested documents that Hynix already produced in
8 the three litigations specifically referenced in its subpoena. Hynix maintains these documents in 9 an electronic database and has presumably already reviewed them for privilege and confidentiality 10 concerns. (See Stockinger Declaration in Support Tessera's Motion to Compel, Exhibit ("Mot. 11 Ex.") 7 at 2.) It would have been no burden whatsoever simply for Hynix to copy the databases to 12 a hard drive and produce them. Nonetheless, Hynix refused to do so. Instead, Hynix proposed to 13 produce a subset of these documents based on a list of search terms. In an attempt to 14 accommodate this request, Tessera proposed a list of terms to Hynix. (Mot. Ex. 6.) Hynix 15 rejected this list. (Mot. Ex. 7.) Then, without securing Tessera's agreement to any set of search 16 terms, Hynix collected documents based on its own unilateral limitation of search terms, and 17 apparently took upon itself to re-review those documents to further limit the production.
18 (Slenkovich Declaration in Support of Hynix's Opposition to Tessera's Motion to Compel 19 ("Slenkovich Decl."), Ex. F.) In its opposition, Hynix claims that this self-imposed and totally 20 unnecessary process is so burdensome that the Court should accept Hynix's limited production. 21 The Court should reject Hynix's argument. If the process of culling the previously produced 22 documents is burdensome, then the Court should simply order Hynix to do what the subpoena 23 requests - produce all documents that Hynix previously produced in the three named litigations. Hynix's complaints as to the second and third categories - requesting documents relating
24
25 to Tessera and Tessera technology, and communications and presentations relating to packaging 26 technology used in DRAM - are also not well-taken. Tessera explained to Hynix during the meet 27 and confer process that, as to the second category, it is only seeking documents reflecting
28 communications with third parties relating to Tessera or Tessera technology. (See Stockinger IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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Declaration in Support of Reply In Support of Tessera's Motion to Compel ("Stockinger Decl.") at
2 f2; Tessera's Motion to Compel ("Mot.") at 8:7-12.) Tessera even clarified the term "Tessera 3 technology" for Hynix, a term it should understand fully considering that it is a licensee of 4 Tessera's technology. (Mot. Ex. 6.) And, the third category should not need narrowing. It seeks 5 documents directly relevant to this case. Tessera claims that the defendants and other DRAM 6 manufacturers, including Hynix, conspired to boycott Tessera's packaging technology for use in 7 DRAM. Communications and presentations relating to packaging technology used in or 8 considered for use in DRAM will provide evidence of Hynix's and other DRAM manufacturers' 9 packaging plans, evidence at the heart of Tessera's claims. 10
In addition, Hynix should not be allowed to withhold documents in the possession of its
11 Korean parent. It has already admitted that its American subsidiary has control over the parent's 12 documents for litigation purposes and the case law, which Hynix agrees applies, supports a finding 13 of control. Hynix's opposition is meritless, and Tessera's motion to compel should be granted. 14
Finally, this Court should deny Hynix's request for reimbursement of $70,000 in costs -
15 which appear to be mainly attorneys' fees. These fees were incurred because of Hynix's unilateral 16 decision to unnecessarily re-review documents previously produced in prior litigations in an effort 17 to limit documents it would provide to Tessera. Tessera did not request this; it was willing to take 18 on the burden of reviewing all the prior litigation documents itself. 19 II.
ARGUMENT
20
A.
21
Each of Tessera's document requests at issue is narrowly tailored, clear and not
Tessera's Document Requests Are Narrowly Tailored And Not Burdensome
22 burdensome. Tessera's first request for documents Hynix produced in specific previous litigations 23 is not burdensome at all. Hynix could simply copy the documents it has stored on electronic 24 databases onto hard drives or DVD-ROMS and provide those hard drives or DVD-ROMs to 25 Tessera. Tessera's second request for documents relating to Tessera and Tessera technology has 26 been narrowed through meet and confer sessions to include only communications with third 27 parties. Further, Hynix, a licensee of Tessera's technology, should understand the term, "Tessera 28 technology." Finally, Tessera's third request for presentations and communications relating to IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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packaging used in DRAM goes to the heart of Tessera's claims that defendants and other DRAM
2 manufacturers attempted to boycott Tessera and its technology in order to destroy Tessera's ability 3 to act as a licensor to manufacturers of synchronous DRAM chips.
1.
4 5
Hynix Faces No Burden in Responding to the First Request
There is no burden on Hynix to provide to Tessera documents previously produced in other
6 legal proceedings. Hynix stores these documents in electronic databases, and has already
7 produced them in previous actions. (See generally Mot. Ex. 7.) To comply with the subpoena, 8 Hynix simply needed to copy these databases to DVD-ROMs or hard drives and send them to 9 Tessera. Instead, Hynix took upon itself a far more burdensome process. It unilaterally elected to 10 search for only those documents containing certain terms of its own choosing, apparently re11 reviewed the documents before producing them, and now seeks to make Tessera pay for a process 12 to which Tessera never agreed. (Slenkovich Decl. at ^flO & Ex. F.) 13
Even Hynix's justification for rejecting the terms Tessera proposed is senseless. For
14 instance, it claims that terms like the defendants' names, Micron and Infineon, would have 15 resulted in the production of documents "having nothing to do with ... the issues involved in 16 Tessera's actions."1 (Opp. at 3.) Hynix cannot avoid discovery by claiming a burden it has placed 17 on itself, particularly when the sole aim of Hynix's efforts appears to have been to improperly 18 limit the production to Tessera. Hynix does not get to pick and choose what it will produce in 19 response to a valid subpoena. 20
All documents Hynix produced in previous antitrust-related proceedings are relevant - not
21 just a subset of Hynix's choosing. Tessera's complaint cites directly from the publicly released 22 documents from the FTC investigation. The documents produced in the DOJ investigation are 23 also relevant. Hynix asserts that these documents are not relevant because its plea agreement 24 excluded RDRAM. (Opp. at 4.) Regardless of the specifics of Hynix's plea, however, the DOJ's 25 26
Further, Hynix makes much of the fact that Tessera has not taken its Motion off calendar, even though Hynix has not produced documents according the original compromise Tessera offered 27 (see Ex. 6), and further refused to run additional searches in order to potentially remedy the fact that Hynix cannot electronically search documents produced in the FTC investigation. (Mot. Ex. 7 28 at 2; Stockinger Decl. at |3.) 1RELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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price-fixing investigation did not exclude RDRAM, and includes the same conspirators involved
2 in the conspiracy against Tessera over the same time frame. 3
And, Tessera's request for documents produced in previous legal actions is appropriately
4 limited to relevant proceedings. (See Opp. at 6.) Tessera only requests documents from "antitrust5 related" legal proceedings. The request goes on to specifically list cases of which Tessera is aware 6 relating to Hynix's anticompetitive conduct - the FTC investigation entitled In re Rambus 7 Incorporated, the DOJ investigation of Hynix's anticompetitive conduct in the DRAM industry, 8 and the state and federal class actions spawned by the DOJ investigation. Hynix has not revealed 9 additional cases in which it is involved, and Tessera has not sought, during the meet and confer 10 process, documents from any other litigations. Moreover, contrary to Hynix's assertion, Tessera 11 explained to Hynix that it is only seeking documents produced by Hynix itself m previous legal 12 proceedings. (See Opp. at 5-6; Stockinger Decl. at ^2; Mot. Ex. 9.) 13
2.
14
Hynix Understands the Clear Terms in the Second Request
The second of Tessera's requests, which simply asks for documents concerning Tessera
15 and Tessera technology, is clear. Hynix baselessly objects, claiming it cannot understand the term 16 "Tessera technology." (Opp. at 6-7.) As Hynix is well-aware, however, Tessera's technology is 17 commonly known by its trademark, uBGA or microBGA. Hynix has licensed Tessera technology 18 and presumably knows in detail what it licensed. In fact, pursuant to that license, several of 19 Hynix's employees were trained in implementing that technology and received confidential 20 information relating to it. Moreover, through the meet and confer process, Tessera further clarified 21 the meaning of Tessera technology by providing Hynix's counsel with a list of terms it could use 22 to search for documents responsive to this request. (Mot. Ex. 6.) 23
hi addition, Hynix has sought to narrow the request to eliminate responsive documents if
24 those documents were not produced by Hynix in other antitrust litigations. The request is not so 25 limited. Contrary to its representation in its opposition that Hynix offered to produce documents 26 concerning Tessera (Opp. at 7), Hynix has never agreed to produce any documents outside of 27 those already produced in previous legal proceedings. Even if documents responsive to Tessera's 28 IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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second request were not produced to the FTC or DOJ, they are relevant to the lawsuit and should
2 be produced. 3
3.
4
Tessera's Third Request Is Narrowly Tailored and Proper
Tessera's third request seeks Hynix presentations and communications relating to
5 packaging technology used in DRAM. Such a request is relevant and appropriately limited.
6 Hynix's assertion otherwise is baseless. (See Opp. at 7.) 7
First, the request does limit the type of documents sought to communications and
8 presentations, thereby excluding, for example, internal technical and engineering documents
9 regarding packaging technology. Further, the request limits the subject matter of these documents 10 to packaging technology used in DRAM, as opposed to that used in other kinds of computer chips 11 like FLASH chips or microprocessors. 12
These limitations are narrowly tailored to specifically address the issues central to
13 Tessera's claims. Tessera alleges that Micron and Infineon conspired with other DRAM 14 manufacturers, like Hynix, to boycott Tessera's packaging technology. (See, e.g., Mot. Ex. 16 at ][ 15 4.) Communications and presentations relating to the packaging technology Hynix considered for 16 use in DRAM chips are likely to contain evidence of Hynix's (and potentially other DRAM 17 manufacturers') packaging plans, their preferences for various packaging technology, and their 18 reasons for using one type of technology over another. In short, these documents go to the central 19 issue in this case: whether DRAM manufacturers had legitimate or anticompetitive reasons for not 20 choosing Tessera technology. 21
B.
22
Contrary to Hynix's assertion (Mot. at 8), Tessera need not show that "Hynix has control
Hynix Must Produce HSI Documents In Its Control
23 over HSI," Hynix's Korean Parent, in order for this Court to find that Hynix has control over the 24 documents in HSI's possession. GerlingInt'lInsur. Co. v. IRS, 839 F.2d 131, 141 (3rd Cir. 1988) 25 ("[w]here the relationship is such that the agent-subsidiary can secure documents of the principal26 parent to meet its own business needs ..., the courts will not permit the agent subsidiary to deny 27 control for purposes of discovery.") (See Mot. at 11-13.) 28 1RELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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There is no serious dispute that Hynix has control over the requested HSI documents -
2 Hynix has admitted as much: "Nevertheless, as a compromise on this issue, we would be willing 3 to produce to Tessera documents originating from HSI which have already been produced, 4 whether in response to discovery or through other agreements, within the litigation referenced in 5 your letter." (Mot. Ex. 7 at 1; see Mot. at 11.)
6
Moreover, Hynix agrees that the case at bar is "most similar" to a case Tessera cited in
7 support of its position, Choice-Intersil Microsystems, Inc. v. Agere Sys., Inc., 224 F.R.D. 471 8 (N.D. Cal. 2004). (Opp. at 8; see Mot. at 8.) Hynix concedes that the Court in Choice-Intersil
9 "found that the subsidiary had the ability to obtain a limited amount of documents relating to the 10 marketing and technical development of a specific product and ordered that limited production." 11 (Opp. at 8.) Hynix ignores the broader holding in that case, however. 12
The Court in that case found that Infineon NA, a wholly-owned subsidiary of Infineon AG,
13 a German corporation, was able to obtain, upon demand, high-level marketing documents from 14 and shared document databases with Infineon AG. Choice-Intersil, 224 F.R.D. at 472-73. Based 15 on this finding, the Court held that, because Infineon NA had control over one type of document 16 relating to a specific product, it also had control over other types of documents relating to that 17 product. 18
[SJince Infineon NA had the apparent ability to obtain high level documents relating to the marketing of the product, it could also obtain documents relating to the technical development of the product if it chose to request them from Infineon AG.
19 20 Id. 21
This holding governs here. HSI owns 96.7 percent of HSA. Hynix's website confirms that
22 HSA provides "sales, marketing and distribution" of Hynix's semiconductor products, including 23 DRAM, and is further involved in research and development of these products - including, 24 significantly, packaging technology. (Mot. at 12.) HSA therefore must be able to obtain 25 documents on these subjects from Hynix upon demand. Tessera requests documents relating 26 directly to these issues - DRAM and packaging technology. Since HSA has control of these HSI 27 documents for business purposes, it should not be permitted to deny that control for discovery 28 purposes. IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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C.
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This Court Should Deny Hynix's Request For Unnecessarily Incurred Fees And Costs
3
Hynix has no basis for seeking $70,000 in fees and costs from Tessera. In purported
4 support for reimbursement, Hynix cites to a single case for the proposition that a nonparty "should 5 not be forced to subsidize an unreasonable share of the costs of litigation to which they are not a
6 party." United States v. Columbia Broadcasting Sys., Inc., 666 F.2d 364, 371 (9th Cir. 1982). 7 Tessera did not require Hynix to incur $70,000 in fees and costs. Hynix apparently instructed its
8 counsel to re-read documents that already had been produced in prior actions before producing 9 them to Tessera. That was Hynix's choice. Tessera should not have to pay for this choice - it was 10 unnecessary for Hynix to do so to comply with the subpoena. Any "unreasonable" costs borne by 11 Hynix were the direct result of its converting a simple task into a burdensome one. 12
Tessera requested production of all documents that Hynix previously produced in three
13 specific antitrust-related proceedings. Hynix admittedly keeps these documents in electronic 14 databases. (See Mot. Ex. 7.) It could have simply copied these databases onto DVD-ROMs or 15 hard drives and produced them, thereby fully complying with the first document request. Instead, 16 in order to avoid full compliance, Hynix sought to limit the production through electronic searches 17 for documents containing certain terms - terms to which Tessera never agreed. (Mot. Ex. 7 & 8; 18 Slenkovich Decl., Ex. F.) It then re-reviewed documents that had previously been produced in 19 other matters and that presumably had already been reviewed for privilege and confidentiality 20 issues. (Slenkovich Decl. at ^| 10.) Hynix unilaterally converted a simple re-production into a 21 massive endeavor - and now it unreasonably wants Tessera to pay for it. See Zubulake v. UBS 22 Warburg LLC, 217 F.R.D. 309, 317 (S.D.N.Y. 2003) ("The Supreme Court has instructed that the 23 presumption is that the responding party must bear the expense of complying with discovery 24 requests. Any principled approach to electronic evidence must respect this presumption." (internal 25 quotation and alteration omitted)).
Moreover, judging from Hynix's counsel's explanation that Hynix incurred "costs of over
26
27 $70,000 in fees related to this effort" (Slenkovich Decl. at T}10), it appears Hynix is really seeking 28 reimbursement for attorneys' fees. Yet, the District Court on remand from the very case Hynix IRELL & MANELLA LLP A Registered Limited Liability Law Partnership Including Professional Corporations
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cites in alleged support of its position clearly held: "The Nonparty Witnesses will not be allowed
2 to recover the costs incurred in retaining outside counsel. The 'American Rule' on attorneys' fees 3 is that each party must bear the burden of his own attorneys' fees." United States v. CBS, Inc., 4 103 F.R.D. 365, 374 (C.D. Cal. 1984). Tessera will agree to pay the cost of copying the electronic 5 documents onto DVD-ROMs produced to Tessera. That is the only cost Tessera should be
6 required to bear. 7 III.
CONCLUSION
8
This Court should grant Tessera's motion to compel and deny Hynix's request for
9 reimbursement. 10 11 12 13
Respectfully submitted,
14 Dated: March 7, 2006
IRELL & MANELLA LLP
15 16
By:
EHip€n S. Turner
17
/
18
^Attorneys for Plaintiff Tessera, Inc.
19 20 21 22 23 24 25 26 27 28 IRELL & MANELLA LLP A Registered Limited Liability Law Partnership including Professional Corporations
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PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is 1800 Avenue of the Stars, Suite 900, Los Angeles, California 90067-4276. On March 7, 2006,1 served the foregoing document described as: TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC. DECLARATION OF TREVOR V. STOCKINGER IN SUPPORT OF REPLY IN SUPPORT OF MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC. on each interested party, as follows: 10 Keith Slenkovich Thelen Reid & Priest LLP 11 225 West Santa Clara Street, Suite 1200 San Jose, CA 95113 12 [email protected]
Alexis Gorton Kirkland & Ellis LLP 153 East 53rd Street New York, NY 10022-4611 [email protected]
13 Arthur P. Licygiewicz Jones Day 14 North Point 901 Lakeside Avenue 15 Cleveland, OH 44114 [email protected] 16 " 17
(BY OVERNIGHT DELIVERY SERVICE) I served the foregoing document by FedEx, an express service carrier which provides overnight delivery, as follows. I placed a true copy of the foregoing document in sealed envelopes or packages designated by the express service carrier, addressed, as set forth above, with fees for overnight delivery paid or provided for.
18 19 20
(BOX DEPOSIT) I deposited such envelopes or packages in a box or other facility regularly maintained by the express service carrier.
21 22 23
(BY ELECTRONIC MAIL) I caused the foregoing document to be served electronically by electronically mailing a true and correct copy through Irell & Manella LLP's electronic mail system to the e-mail address(es), as set forth above, and the transmission was reported as complete and no error was reported.
„
24
Executed on March 7, 2006, at Los Angeles, California.
25
I declare under penalty of perjury that the foregoing js true and correct.
26
Lisa M. Siegel ([email protected]) (Type or print name) 28
1460619
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