Rambus'S Supplemental Brief On The Court'S September 5, 2008 Tentative Order

Case 5:05-cv-00334-RMW Document 2239 Filed 09/19/2008 Page 1 of 32
1 Gregory P. Stone (State Bar No. 078329) Rollin A. Ransom (State Bar No. 196126)
Steven M. Perry (State Bar No. 106154) SIDLEY AUSTIN LLP
2 Sean Eskovitz (State Bar No. 241877) 555 West Fifth Street, Suite 4000
MUNGER, TOLLES & OLSON LLP Los Angeles, California 90013-1010
3 355 South Grand Avenue, 35th Floor Telephone: (213) 896-6000
Los Angeles, California 90071-1560 Facsimile: (213) 896-6600
4 Telephone: (213) 683-9100 Email: rransom@sidley.com
Facsimile: (213) 687-3702
5 Email: gregory.stone@mto.com; Pierre J. Hubert (Pro Hac Vice)
steven.perry@mto.com; sean.eskovitz@mto.com Craig N. Tolliver (Pro Hac Vice)
6 McKOOL SMITH PC
Peter A. Detre (State Bar No. 182619) 300 West 6th Street, Suite 1700
7 Carolyn Hoecker Luedtke (State Bar No. 207976) Austin, Texas 78701
Jennifer L. Polse (State Bar No. 219202) Telephone: (512) 692-8700
8 MUNGER, TOLLES & OLSON LLP Facsimile: (512) 692-8744
560 Mission Street, 27th Floor Email: phubert@mckoolsmith.com;
9 San Francisco, California 94105 ctolliver@mckoolsmith.com
Telephone: (415) 512-4000
10 Facsimile: (415) 512-4077
Email: peter.detre@mto.com;
11 carolyn.luedtke@mto.com; jen.polse@mto.com
12 Attorneys for RAMBUS INC.
13 UNITED STATES DISTRICT COURT
14 NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
15
16 RAMBUS INC., CASE NO.: C 05-00334 RMW

17 Plaintiffs, RAMBUS’S SUPPLEMENTAL BRIEF ON
THE COURT’S SEPTEMBER 5, 2008
18 vs. TENTATIVE ORDER
19 HYNIX SEMICONDUCTOR, INC., et al.,
20 Defendants. Hearing: September 24, 2008
Time: 2:30 p.m.
21 Courtroom: 6
Judge: Hon. Ronald M. Whyte
22
CASE NO.: C 05-02298 RMW
23 RAMBUS INC.,
24 Plaintiff,
v.
25
SAMSUNG ELECTRONICS CO., LTD.,
26 et al.,
Defendants.
27
28
RAMBUS’S SUPPLEMENTAL BRIEF ON THE
COURT’S SEPTEMBER 5, 2008 TENTATIVE ORDER
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 CASE NO.: C 06-00244 RMW

RAMBUS INC.,
2
Plaintiff,
3 v.
4 MICRON TECHNOLOGY, INC., et al.,
5 Defendants.
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CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION .............................................................................................................. 1
4 II. RAMBUS CONCURS IN THE COURT’S TENTATIVE DECISION TO HOLD
A CONSOLIDATED TRIAL ON INFRINGEMENT AND VALIDITY, BUT
5 SUBMITS THAT THE TRIAL SHOULD INCLUDE DAMAGES.................................. 2
6 A. Common Issues of Fact Overwhelmingly Favor A Consolidated Trial on
Infringement and Validity for all DDR2+ products................................................ 2
7 1. The Consolidated Trial Promotes Judicial Economy.................................. 2
8 2. The Prejudice Concerns Invoked by the Manufacturers Do Not
Outweigh the Efficiencies of a Consolidated DDR2+ Trial ....................... 3
9
B. Trying Infringement and Damages Together Before The Same Jury Would
10 Further Judicial Economy and Efficiency............................................................... 7
11 1. The Same Efficiency Considerations Favor Trying Damages and
Liability in a Single Consolidated Proceeding............................................ 7
12
2. Even if the Court Tries Liability Separately From Damages, the
13 Same Jury Should be Empanelled for Both Phases .................................... 9
3. Once the Jury Determines Damages, the Court Can Proceed to
14 Bifurcated Willfulness Trials .................................................................... 10
15 III. GRANTING A STAY PENDING PTO REEXAMINATION WOULD
IRREPARABLY HARM RAMBUS AND UNDERMINE JUDICIAL
16 ECONOMY ...................................................................................................................... 10
17 A. The Preclusion Rules Governing Parallel Inter Partes and Ex Parte
Reexaminations Are Different, and Favor the Federal Court Litigation Here...... 11
18
B. Rambus Stands to Suffer Irreparable Prejudice If a Stay Is Granted.................... 14
19
1. A Stay Pending PTO Reexamination Would Cause Protracted
20 Delay ......................................................................................................... 14
2. A Stay Would Seriously Prejudice Rambus by Effectively Imposing
21 a Compulsory License and Denying Rambus Injunctive Relief ............... 16
22 3. A Prompt Trial Would Promote Efficiency Without Prejudicing
Samsung or Other Manufacturers ............................................................. 19
23
C. A Stay Should Not be Imposed on The Eve of Trial, with Discovery
24 Complete ............................................................................................................... 21
25 D. A Stay Would Not Simplify Issues For Trial........................................................ 22
1. A Trial Will Be Necessary Regardless of the Outcome of
26
Reexamination Proceedings ...................................................................... 22
27 2. Speculation About the Ultimate Outcome of Reexamination Cannot
be the Basis for a Stay............................................................................... 23
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-i- CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 TABLE OF CONTENTS
(continued)
2 Page
3 IV. NEITHER HYNIX I NOR THE DELAWARE ACTION WARRANTS A STAY .......... 24
4 V. CONCLUSION ................................................................................................................. 25
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- ii - CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 TABLE OF AUTHORITIES
2 Page(s)
3 FEDERAL CASES
4 Alltech, Inc. v. Cenzone Tech, Inc.,

2007 WL 935516 (S.D. Cal. Mar. 21, 2007) .................................................................... 19, 21
5 Arkie Lures, Inc. v. Gener Larew Tackle, Inc.,
119 F.3d 953 (Fed. Cir. 1997)................................................................................................... 4
6
Arnold v. Garlock, Inc.
7 278 F.3d 426 (5th Cir. 2001)................................................................................................... 25
ASCII Corp. v. STD Entm’t USA, Inc.,
8 844 F. Supp. 1378 (N.D. Cal. 1994) ....................................................................................... 22
9 Belmont Textile Machinery Co. v. Superba,
48 F. Supp. 2d 521 (W.D.N.C. 1999) ....................................................................................... 9
10 Biax Corp. v. Fujitsu Computer Systems Corp.,
2007 WL 614187 (E.D. Tex. Feb. 26, 2007) .................................................................... 16, 23
11
Brown Williamson Tobacco v. Phillip Morris, Inc.
12 229 F.3d 1120 (Fed. Cir. 2000)................................................................................................. 9
Dependable Highway Express, Inc. v. Navigators Ins. Co.,
13 498 F.3d 1059 (9th Cir. 2007)................................................................................................. 24
14 Digital Magnetic Sys., Inc. v. Ansley,
213 U.S.P.Q. 290 (W.D. Okla. 1982) ..................................................................................... 21
15 eBay, Inc. v. MercExchange, L.L.C.,
547 U.S. 388 (2006) ................................................................................................................ 17
16
Ecolochem, Inc. v. Southern Cal. Edison Co.,
17 227 F.3d 1361 (Fed. Cir. 2000)................................................................................................. 6
Enprotech Corp. v. Autotech Corp.,
18 15 U.S.P.Q. 2d 1319 (N.D. Ill. 1990) ..................................................................................... 23
19 Ethicon, Inc. v. Quigg,
849 F.2d 1422 (Fed. Cir. 1988)............................................................................................... 12
20 Freeman v. Minnesota Min. and Mfg. Co.,
661 F. Supp. 886 (D. Del. 1987) ............................................................................................. 22
21
Fresenius Medical Care Holdings v. Baxter Int’l., Inc.,
22 2007 WL 1655625 (N.D. Cal. June 7, 2007) ........................................................ 16, 20, 21, 22
Fujitsu, Inc. v. Nanya Technology Corp.,
23 2007 WL 3314623 (N.D. Cal. Nov. 6, 2007).......................................................................... 21
24 Genoa Color Technologies, Ltd. v. Samsung Electronics America, Inc.,
2008 WL 754681 (S.D.N.Y. Mar. 12, 2008) .......................................................................... 16
25 Gladish v. Tyco Toys, Inc.,
29 U.S.P.Q. 2d 1718 (E.D. Cal. 1993) .............................................................................. 22, 23
26
Golden Trade S.R.L. v. Lee Apparel Co.,
27 1997 WL 373715 (S.D.N.Y. June 25, 1997)......................................................................... 3, 5
28
- iii - CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
(continued)
2 Page(s)
3 In re American Acad. of Sci. Tech. Ctr.,
367 F.3d 1359 (Fed. Cir. 2004)............................................................................................... 16
4 In re Cygnus Telecomms. Tech., LLC Patent Litig.,
385 F. Supp. 2d 1022 (N.D. Cal. 2005) .................................................................................. 22
5
In re Swanson,
6 F.3d , 2008 WL 4068691 (Fed. Cir. Sept. 4, 2008) ............................................... 2, 12, 14
Johns Hopkins Univ. v. Cellpro,
7 160 F.R.D. 30 (D. Del. 1995).................................................................................................... 7
8 Lans v. Digital Equip. Corp.,
252 F.3d 1320 (Fed. Cir. 2001)............................................................................................... 17
9 Lentek Int’l, Inc. v. Sharper Image Corp.,
169 F. Supp. 1360 (M.D. Fla. 2001) ....................................................................................... 22
10
Levya v. Certified Grocers of Cal., Ltd.,
11 593 F.2d 857 (9th Cir. 1979)................................................................................................... 25
Lexington Lasercomb I.P.A.G. v. GMR Prods., Inc.,
12 442 F. Supp. 2d 1277 (S.D. Fla. 2006) ................................................................................... 16
13 Lockyer v. Mirant Corp.,
398 F. 3d 1098 (9th Cir. 2005)................................................................................................ 24
14 MercExchange, L.L.C. v. eBay, Inc.,
500 F. Supp. 2d 556 (E.D. 2007) ............................................................................................ 22
15
Network Appliance Inc. v. Sun Microsystems, Inc.,
16 2008 WL 2168917 (N.D. Cal. May 23, 2008) ...................................................... 15, 16, 23, 24
Northlake Mktg. & Supply, Inc. v. Glaverbel, S.A.,
17 72 F. Supp. 2d 893 (N.D. Ill. 1999) .......................................................................................... 8
18 NTP, Inc. v. Research In Motion, Ltd.,
397 F. Supp. 2d 785 (E.D. Va. 2005)...................................................................................... 16
19 O’Donnell v. Watson Bros. Transport. Co.,
183 F. Supp. 577 (D.C. Ill. 1960) ............................................................................................. 9
20
Output Tech. Corp. v. Dataproducts Corp.,
21 22 U.S.P.Q. 1072 (W.D. Wash. 1991) .................................................................................... 21
Power-One, Inc. v. Artesyn Techs., Inc.,
22 556 F. Supp. 2d 591 (E.D. Tex. 2008) ...................................................................................... 6
23 Remington Arms Co., Inc., v. Modern Muzzleloading, Inc.,
1998 WL 1037920 (M.D.N.C. Dec. 17, 1998) ....................................................................... 22
24 Sony Computer Entertainment Am., Inc. v. Dudas,
2006 WL 1472462 (E.D. Va. May 22, 2006) ................................................................... 13, 14
25
Soverain Software LLC v. Amazon.com, Inc.,
26 365 F. Supp. 2d 660 (E.D. Tex. 2005) .............................................................................. 17, 21
Stratoflex, Inc. v. Aeroquip Corp.,
27 713 F.2d 1530 (Fed. Cir. 1983)................................................................................................. 4
28
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(continued)
2 Page(s)
3 Syntex (U.S.A.) Inc. v. Paragon Optical Inc.,
7 U.S.P.Q. 2d 1001 (D. Ariz. 1987).......................................................................................... 9
4 Telemac Corp. v. Teledigital, Inc.,
405 F. Supp. 2d 1107 (N.D. Cal. 2006) .................................................................................. 10
5
TIP Systems, LLC v. SBC Operations, Inc.,
6 2008 WL 594258 (S.D. Tex. Mar. 4, 2008)............................................................................ 25
TWM Mfg. Co. v. Dura Corp.,
7 789 F.2d 895 (Fed. Cir. 1986)................................................................................................... 9
8 FEDERAL STATUTES
9 35 U.S.C. § 141 ....................................................................................................................... 15, 20

35 U.S.C. § 301 ............................................................................................................................. 23
10
35 U.S.C. § 311 ............................................................................................................................. 23
11 35 U.S.C. § 314 ....................................................................................................................... 13, 14
12 35 U.S.C. § 315 ....................................................................................................................... 13, 20
35 U.S.C. § 316 ............................................................................................................................. 15
13
35 U.S.C. § 317 ............................................................................................................................. 13
14 FEDERAL REGULATIONS
15 37 C.F.R. § 1.935 .......................................................................................................................... 14
16 37 C.F.R. § 1.951 .......................................................................................................................... 14
37 C.F.R. § 1.953 .......................................................................................................................... 15
17
37 C.F.R. § 1.987 .......................................................................................................................... 13
18 TREATISES
19 9A Wright & Miller, Federal Practice & Procedure: Civil 3d § 2391 (3d ed. 2008).................... 9
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-v- CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 I. INTRODUCTION
2 Rambus concurs in the Court’s tentative decision to hold a consolidated trial on
3 infringement and validity with respect to the Manufacturers’ DDR2 and subsequent DRAM
4 products. Rambus does not oppose severing the claims against Nanya’s and Samsung’s SDRAM
5 and DDR devices, nor does it oppose bifurcated, individual trials to a single jury on willfulness.
6 While Rambus believes these issues could all be fairly presented in a single trial, the Court’s
7 approach to these aspects of the case is reasonable and pragmatic. Rambus submits, however,
8 that the efficiency and fairness concerns supporting consolidation extend to damages, and weigh
9 in favor of including damages in the January trial on infringement and validity.
10 Despite the Manufacturers’ protests at the September 5, 2008 hearing (the “Hearing”), the
11 Court’s consolidation proposal would facilitate efficient resolution of infringement and validity,
12 with minimal risk of confusion or prejudice. These issues turn on a common set of facts. As the
13 Manufacturers have themselves noted, virtually all the accused products incorporate shared
14 features from JEDEC standards—features that Rambus maintains are infringing. The
15 Manufacturers’ claims of prejudice, which would carry no force even if a fully consolidated trial
16 were in the offing, have even less merit in view of the Court’s streamlined trial proposal. The
17 only modification Rambus proposes is to try damages together with infringement and validity,
18 and before any willfulness trials. This further consolidation would add little complexity to the
19 issues slated for trial, since the jury would already have learned the technologies, the products,
20 and the players. The marginal expansion of trial issues is more than justified by the efficiency
21 and fairness benefits. These include avoiding the time and expense of seating and educating a
22 second jury, and forcing Rambus to present some of the same liability evidence to that jury.
23 Rambus also submits that the trial should proceed in January, as contemplated by the
24 Court’s Tentative Order. Although counsel for Samsung urged the Court at the Hearing to stay
25 this case pending resolution of the PTO’s inter partes reexaminations, there is little to be gained
26 from such a stay and every reason to proceed to trial. The federal court litigation is likely to
27 conclude long before the PTO issues a Certificate of Reexamination. Samsung filed its initial
28 (and defective) inter partes challenge more than 18 months into this litigation. The PTO’s track
-1- COURT’S SEPTEMBER 5, 2008 TENTATIVE ORDER
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 record shows that the reexaminations are likely to take years, with appellate review increasing the
2 delay. There is no hard evidence to support Samsung’s suggestion that the process will now be
3 quicker with the advent of the Central Reexamination Unit (“CRU”), which has been in place for
4 but a short time. Nor is there any merit to Samsung’s suggestion at the Hearing that the PTO
5 could negate even a final judgment of validity by this Court; that argument and In re Swanson,
6 F.3d , 2008 WL 4068691 (Fed. Cir. Sept. 4, 2008), apply to ex parte reexaminations, not to the
7 inter parte reexaminations at issue here. By statute, any final judgment of validity would
8 preclude the PTO from proceeding with Samsung’s pending inter partes challenges.
9 II. RAMBUS CONCURS IN THE COURT’S TENTATIVE DECISION TO HOLD A
CONSOLIDATED TRIAL ON INFRINGEMENT AND VALIDITY, BUT
10 SUBMITS THAT THE TRIAL SHOULD INCLUDE DAMAGES
11 A. Common Issues of Fact Overwhelmingly Favor A Consolidated Trial on
Infringement and Validity for all DDR2+ products
12
Holding a consolidated trial on the infringement and validity issues raised by Rambus’s
13
claims against the Manufacturers’ DDR2+ products is reasonable and fair. A consolidated trial
14
on infringement and validity covering these products would promote efficiency, and reflects the
15
substantial overlap among Rambus’s claims and the Manufacturers’ anticipated defenses.
16 1. The Consolidated Trial Promotes Judicial Economy
17 Although Rambus believes the DDR and SDRAM claims against Samsung and Nanya
18 could reasonably have been folded into a joint trial (Rambus Consol. Opp’n to Mfrs.’ Mot.
19 (“Opp’n”) 5 -7), the decision to sever out those claims for a separate trial has the advantage of
20 focusing the January trial on a set of accused products that cut broadly across the Manufacturers.
21 DDR2 and DDR3 are both marketed by all of the Manufacturers. Rambus Final Infringement
22 Contentions 5-6. This means that as to two of the five accused products in the consolidated trial,
23 the overlap would be complete. There would also be overlap as to two of the three remaining
24 products, with GDDR3 built by three of the Manufacturers and GDDR4 by two of them. Id.
25 The consolidated trial proposed by the Court would harness the efficiencies noted by
26 Rambus in its Opposition, while avoiding many of the concerns (however valid) expressed by the
27 Manufacturers about a joint trial with “older” SDRAM products. See Micron Mot. 11. As we
28 have explained, it only makes sense to adjudicate Rambus’s claims against the Manufacturers’
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 SDRAM products together. Opp’n 5-7. The claims involve the same memory technologies. Id.
2 Rambus has asserted them against a set of memory features that, with narrow exception, were
3 embodied in JEDEC-standards and used by the Manufacturers in products following those
4 standards. Id. Consistent with these shared features, the Manufacturers have indicated an intent
5 to raise virtually identical invalidity defenses to Rambus’s claims, including anticipation,
6 obviousness, and inadequate written description. Id. at 8. By severing out the SDRAM and DDR
7 claims, the Court would further simplify the infringement and validity issues for trial. Nanya
8 argued, for example, that a consolidated trial that included DDR and SDRAM claims against two
9 Manufacturers would exacerbate the risk of jury confusion by leaving jurors wondering “why this
10 is the case.” Nanya Mot. 10, 12. Even assuming this concern was legitimate, the proposed
11 consolidation puts it to rest.
12 Where, as here, a patentholder asserts claims against the features used in standardized
13 products, the most rational approach to adjudication is to present the issues to a single jury in a
14 joint trial. See Golden Trade S.R.L. v. Lee Apparel Co., 1997 WL 373715 (S.D.N.Y. June 25,
15 1997). Empanelling different juries to consider what amounts to the same claims, defenses, and
16 evidence would risk inconsistent results and waste the resources of both the court and the parties.
17 2. The Prejudice Concerns Invoked by the Manufacturers Do Not
Outweigh the Efficiencies of a Consolidated DDR2+ Trial
18
In their replies and at the Hearing, the Manufacturers did not seriously contest the
19
common factual issues pervading Rambus’s claims and the invalidity defenses. Nor could they,
20
for their own expert on noninfringement and validity consistently treated the accused products in
21
an undifferentiated fashion, stressing that they shared a “common set of features.” See Opp’n 9-
22
10 (collecting citations). The Manufacturers’ arguments focused instead on the purported
23
prejudice that would flow from a consolidated trial. The sources of prejudice they identify are
24
unavailing, however, and cannot override the efficiencies to be gained from consolidation. This
25
is doubly so in light of the streamlined DDR2+ trial proposed by the Court.
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First, the severance of willfulness into individual trials directly addresses the concerns
27
expressed by the Manufacturers about the Hynix I verdict. In their papers, Micron and Samsung
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CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 highlighted the prejudice that they believed would result from the introduction of the verdict in a
2 joint trial. See Micron Mot. 9; Micron Reply 3-4; Samsung Mot. 6; Samsung Reply 2-3. If the
3 Court proceeds with its plan to hold separate jury trials on willfulness for each Manufacturer, the
4 admission of the Hynix I verdict presents no risk of spillover; the Court will separately decide, as
5 to Micron, Nanya, and Samsung, whether to admit the verdict and, if so, for what purpose.
6 Second, the introduction of past Samsung and Hynix licenses will not cause Micron and
7 Nanya undue prejudice, as they suggest. E.g., Micron Reply 5. Evidence of past licenses are
8 admissible, for example, as “secondary considerations” to show non-obviousness. Opp’n 19-20.
9 The Federal Circuit has held that “public and commercial response to an invention is a factor to
10 be considered in determining obviousness, and is entitled to fair weight.” Arkie Lures, Inc. v.
11 Gene Larew Tackle, Inc., 119 F.3d 953, 957 (Fed. Cir. 1997). Like other secondary
12 considerations, licensing activity, including third-party licenses, may demonstrate “how the
13 patented device is viewed by ... persons concerned with the product in the objective arena of the
14 marketplace.” Id. The Manufacturers have offered no basis to dispute the nexus between the
15 Samsung and Hynix licenses and the merits of Rambus’s patented inventions, making this
16 licensing evidence highly probative of obviousness. Opp’n 19-20. Because past licensing
17 activity would be admissible against Micron and Nanya even in individual trials, and because the
18 jury’s consideration of that evidence could be effectively guided with jury instructions, “being in
19 a trial with two defendants who have agreed to ... royalty bearing licenses” (9/5/08 RT 23)
20 constitutes no prejudice at all.
21 Nanya contends in its reply that the licenses are inadmissible to show obviousness and
22 validity, reasoning that “[w]hat Hynix and Samsung ‘believed’ in 1995 and 2000 is irrelevant to
23 what a person of ordinary skill would have understood in 1990.” Nanya Reply 8-9. But Nanya
24 cites no supporting authority for this contention, and it cannot be squared with settled Federal
25 Circuit authority establishing that licensing is a proper secondary consideration. See, e.g.,
26 Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1539 (Fed. Cir. 1983). It is hardly uncommon
27 for companies to license patented inventions following the issuance of a patent. Under Nanya’s
28 approach, however, that evidence would be categorically excluded from the analysis.
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 In its reply (Micron Reply 5) and at the Hearing (9/5/08 RT 24), Micron insisted it would
2 be damaged in the eyes of the jury by being associated with Manufacturers who entered into
3 licensing agreements with Rambus. But far from prejudicing Micron, the presence of the past
4 licensees at a joint trial would give Micron the benefit of an explanation as to why the licenses
5 cannot, in their view, be taken as persuasive evidence of validity. Notwithstanding their past
6 licenses, Hynix and Samsung have both challenged the validity of Rambus’s patents on a variety
7 of grounds. See, e.g., Mfrs.’ Supp. Joint Prelim. Invalidity Contentions. Given that the licenses
8 would come in against Micron even in an individual trial, having Samsung and Hynix available to
9 address them would arguably be more advantageous to Micron than having to account for the
10 licenses itself. In any event, defendants in a multi-defendant case often have different
11 permutations of a common defense, and that circumstance alone poses no obstacle to a joint trial.
12 See Golden Trade, 1997 WL 373715, at *2 (noting that conflicts are “potentially present
13 whenever there are multiple defendants,” and “do not ordinarily constitute the kind of ‘prejudice’
14 that impacts the fairness of the trial”).
15 Third, the Manufacturers contend they will be unduly prejudiced in a joint trial by the
16 introduction of infringement evidence specific to Hynix: the Farhad Tabrizi emails
17 acknowledging that “all DDR memories are infringing” (Exh. 6523) and vowing to “fight
18 Rambus” (Exh. 6634), and a Hyundai/Hynix design proposal looking to Rambus for DLL and
19 dual-edge clocking solutions (Ex. 5020). See Micron Reply 7-8; Nanya Reply 7. Micron pressed
20 this point at the Hearing, arguing that the evidence “clearly doesn’t come in in a Micron-only
21 trial.” 9/5/08 RT 27. But the Court’s trial proposal itself may dispatch the prejudice argument
22 regarding the “fight Rambus” email. Rambus seeks to introduce that evidence primarily to
23 establish willfulness (Opp’n 23), 1 and that issue would be tried against each manufacturer
24 separately under the Court’s tentative trial plan. Micron, Samsung, and Nanya will each have an
25 opportunity to seek exclusion of that evidence, then, in their respective willfulness trials.
26
1
27 Of course, Rambus reserves the right to seek introduction of the “fight Rambus” email in the
consolidated trial if the Manufacturers interpose a defense that makes it relevant. In that event,
28 the Court can decide its admissibility and, if necessary, limit its scope.
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 The other evidentiary challenges need not be resolved in order to devise a trial structure
2 for the ’334 case, but can be addressed in in limine motions closer to the time of trial. But even if
3 the admissibility vel non of the Tabrizi “infringement” email and Hynix design proposal bore
4 critically on consolidation, neither would pose a risk of unfair prejudice. This evidence would be
5 admissible against each of the Manufacturers in separate trials on infringement and validity. Mr.
6 Tabrizi’s acknowledgement that DDR infringes goes directly to whether the features embodied in
7 the accused products infringe Rambus’s patents. Mr. Tabrizi is a senior industry figure with a
8 sophisticated understanding of the relevant memory technologies. And as the Manufacturers’
9 expert himself concedes, DDR2 and DDR3 incorporate (and supplement) DDR features that
10 Rambus—and Mr. Tabrizi—believe to be infringing. McAlexander Decl. in Supp. of the Mfrs.
11 Farmwald and Ware Mots. for Summ. J. ¶¶ 28-29 (Docket No. 514, Case No. 05-00334).
12 The Hynix design proposal referencing Rambus’s inventions is admissible for multiple
13 purposes. The evidence at trial will demonstrate that nearly all of the accused products
14 incorporate the two referenced features: dual-edge clocking and DLL. The fact that Hynix
15 believed these features to be Rambus inventions goes directly to whether the relevant claims in
16 suit are valid and infringed. The design is also admissible as a secondary consideration
17 demonstrating non-obviousness, because it reflects copying on the part of Hynix. See Exh. 5020.
18 Copying is a well-accepted secondary consideration, and may carry significant weight when
19 married with “compelling objective indicia of other secondary consideration.” Ecolochem, Inc. v.
20 Southern Cal. Edison Co., 227 F.3d 1361, 1380 (Fed. Cir. 2000). Evidence that Hynix sought to
21 copy specific memory design features invented by Rambus is highly probative of whether those
22 features were obvious. See, e.g., Power-One, Inc. v. Artesyn Techs., Inc., 556 F. Supp. 2d 591,
23 602 (E.D. Tex. 2008) (noting that the patentholder “presented substantial evidence indicating [the
24 defendant] was aware of the concepts of [the patentholder’s] invention”). Rambus expects to
25 undergird its copying evidence with other secondary considerations, including the Samsung and
26 Hynix licenses and the commercial success of its inventions. Cf. id. (noting that the patentholder
27 introduced evidence of praise in the industry for its products, in addition to copying evidence).
28
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 B. Trying Infringement and Damages Together Before the Same Jury Would
Further Judicial Economy and Efficiency
2
Rambus respectfully requests that the Court reconsider its inclination to try damages
3
individually before a new jury that did not participate in the liability phase of the trial. “[I]t is
4
generally much more efficient to work towards one trial and one appeal.” Johns Hopkins Univ. v.
5
Cellpro, 160 F.R.D. 30, 35 (D. Del. 1995). Here, both judicial economy and fairness to Rambus
6
weigh heavily in favor of folding damages into the January trial on infringement and validity.
7
Given the factual overlap between infringement and validity, on the one hand, and the reasonable
8
royalty analysis, on the other, it would be highly inefficient to empanel a new jury on damages
9
and force Rambus to present liability evidence a second time. In contrast, trying damages
10
together with infringement-related issues would not unfairly prejudice the Manufacturers,
11
particularly if the trial is limited to the accused DDR2+ products.
12
1. The Same Efficiency Considerations Favor Trying Damages and
13 Liability in a Single Consolidated Proceeding
14 The Court has proposed that a separate jury decide damages “as to each Manufacturer on
15 an individual basis.” Tentative Order. But because the accused products are overwhelmingly
16 based upon industry-standard designs, this case is well suited to a consolidated trial embracing
17 damages. All but one of the accused products at issue here (RLDRAM II) follow JEDEC-
18 standard designs and incorporate feature sets that infringe Rambus patents. These commonalities
19 make it sensible and efficient to resolve reasonable royalty issues as well as infringement and
20 validity in a single trial before the same jury.
21 As Rambus has explained (Opp’n 14), the evidence at trial will likely establish two
22 hypothetical negotiations dates. As to Samsung, the date would be 2005, when its license
23 terminated. Id. As to the other Manufacturers, it would be January 2001, when the first of the
24 Rambus patents in suit issued. Id. Although the accused products in this case (DDR2+) were not
25 introduced until later, the Manufacturers’ use of several features incorporated into those
26 products—and thus the infringement—extends back to earlier JEDEC-standard designs. At the
27 time the ’184 patent issued in 2001, each of the Manufacturers built and distributed a JEDEC-
28 standard design (DDR) that infringed Rambus’s patent. This reasonable royalty analysis, if
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 adopted, would permit the jury to focus on two fixed points in time in assessing the damages
2 evidence against the four Manufacturers—hardly the disarray and “extreme” confusion forecast
3 by the Manufacturers. See Nanya Mot. 10.
4 Nor would the resulting royalty rate be affected by subsequent events or the licensing
5 agreements informed by those events. Because the hypothetical negotiation assumes that the
6 patent at issue is valid and infringed, see Northlake Mktg. & Supply, Inc. v. Glaverbel, S.A., 72 F.
7 Supp. 2d 893, 902 (N.D. Ill. 1999), any effort by the Manufacturers to rely upon subsequent
8 licenses (such as the 2005 Samsung renegotiation or the Infineon settlement agreement) would be
9 unavailing. Each of the licenses was negotiated against the backdrop of uncertainty over the
10 validity and enforceability of Rambus’s patents, circumstances that are wholly at odds with the
11 assumptions grounding reasonable royalty determinations. See Expert Report of David J. Teece,
12 served Sept. 5, 2008, 14-28.
13 The Manufacturers contend in their papers that a consolidated trial on damages would risk
14 confusing the jury. Nanya Reply 11; Samsung Reply 4. But even assuming that the Court would
15 need to determine a separate hypothetical negotiation date for each of the accused products, as
16 Samsung seems to suggest (Reply 4), the standardized nature of the accused products would
17 permit the jury to use common dates for the Manufacturers. Because each generation of accused
18 DRAM devices (save RLDRAM II) follows a JEDEC standard, the evidence will show that the
19 Manufacturers introduced these products at roughly the same or immaterially different times. 2
20 A consolidated trial would also further efficiency because evidence relevant to
21 infringement and validity is also relevant to damages. The license granted by Rambus to
22 Samsung bears not only on obviousness (see discussion supra at 4-5), but also on the reasonable
23 royalty for the infringed products. In addition, Rambus expects to introduce evidence of the
24 Manufacturers’ product sales to show both validity and damages. The commercial success of the
25 Manufacturers’ products is a secondary consideration relevant to whether the Rambus inventions
26 2
Although Nanya suggests that the Court would have to use a new hypothetical negotiation date
27 for each patent issued (Nanya Reply 12), it cites no authority for this novel proposition and there
is none. Such a rule would render the reasonable royalty determination here inordinately complex
28 without regard to whether damages were tried individually or in a consolidated proceeding.
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 used in these products were obvious. See Brown & Williamson Tobacco Corp. v. Philip Morris,
2 Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000) (“Our case law provides that the success of an
3 infringing product is considered to be evidence of the commercial success of the claimed
4 invention.”); Syntex (U.S.A.) Inc. v. Paragon Optical Inc., 7 U.S.P.Q. 2d 1001, 1005 (D. Ariz.
5 1987) (similar). These sales data are also evidence going to the jury’s determination of damages
6 and, in particular, a reasonable royalty. See, e.g., TWM Mfg. Co. v. Dura Corp., 789 F.2d 895,
7 899 (Fed. Cir. 1986) (upholding special master’s computation of reasonable royalty based upon
8 comparison of infringer’s usual or accepted profit with its anticipated profit from sale of
9 infringing device).
10 2. Even if the Court Tries Liability Separately From Damages, the Same
Jury Should be Empanelled for Both Phases
11
Using separate juries for liability and damages “would cause greater delay and might
12
complicate the proceedings by creating a piecemeal quality to the trial, making it harder for the
13
trier of fact to see the case as a whole.” Belmont Textile Mach. Co. v. Superba, 48 F. Supp. 2d
14
521, 526 (W.D.N.C. 1999). Thus, “the better and preferred practice is to use the same jury for all
15
of the issues in an action, even though it may hear those issues at different times.” 9A Wright &
16
Miller, Federal Practice & Procedure: Civil 3d § 2391 at 175 (3d ed. 2008); see also O’Donnell
17
v. Watson Bros. Transp. Co., 183 F. Supp. 577, 580 (D.C. Ill. 1960).
18
This case involves sophisticated technologies and will impose a steep learning curve on
19
any finder of fact. While the conduct trial demonstrated that a lay jury is fully capable of
20
understanding and rendering impartial judgment on the relevant issues (see Opp’n 24-25),
21
empanelling a new jury would introduce unnecessary complications. Even if a new jury were
22
told to assume validity and infringement, it would still need to understand DRAM design, how
23
DRAM functions, and the market for these devices in order to weigh the reasonable royalty
24
evidence. As the Hynix I trial well illustrates, that evidence is likely to consist of, among other
25
things, licensing agreements and testimony about the value of DRAM features. (Patent Tr. 1027-
26
77 (Teece).) The process of selecting new jurors and educating them about the basic facts of the
27
case would lead to needless delays and expenditures.
28
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 By holding a damages trial before the same jury that adjudicated infringement and
2 validity, the Court would avoid this duplication of effort, process, and expense. When it is time
3 to try damages, the liability jury would already be familiar with the relevant inventions, products,
4 and witnesses. Having already seen the same witnesses during the liability phase would also
5 provide jurors with a broader base of knowledge with which to assess credibility. Thus, even if
6 the Court decides to separate liability and damages into different phases, judicial economy and
7 efficiency would be best served by retaining the same jury throughout the trial.
8 3. Once the Jury Determines Damages, the Court Can Proceed to
Bifurcated Willfulness Trials
9
Integrating damages into the consolidated January trial would cohere well with other
10
aspects of the Court’s proposed trial schedule. Although Rambus believes willfulness could
11
properly be included in the consolidated trial, it does not oppose the Court’s bifurcation proposal.
12
Thus, if the jury finds the patents valid and infringed and returns a damages award, the Court can,
13
at that point, proceed to bifurcated willfulness trials against the individual Manufacturers. See
14
Tentative Order. Because the same jury would be seated for this aspect of the case, the Court
15
would take advantage of the knowledge gained during the first trial while addressing the
16
Manufacturers’ prejudice concerns regarding evidence of willful infringement.
17
III. GRANTING A STAY PENDING PTO REEXAMINATION WOULD
18 IRREPARABLY HARM RAMBUS AND UNDERMINE JUDICIAL ECONOMY
19 In determining the propriety of a stay pending reexamination, courts have traditionally
20 considered “(1) whether discovery is complete and whether a trial date has been set; (2) whether a
21 stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly
22 prejudice or present a clear tactical disadvantage to the nonmoving party.” Telemac Corp. v.
23 Teledigital, Inc., 450 F. Supp. 2d 1107, 1111 (N.D. Cal. 2006). Far from supporting a stay, each
24 of these factors favors prompt and expeditious resolution of this case through trial.
25 A stay would irreparably prejudice Rambus by depriving it of the right to enforce its
26 patents while they are in effect. As the Manufacturers are well aware, the Farmwald/Horowitz
27 patents in suit will expire in April 2010. Contested inter partes reexaminations proceedings in
28 the PTO are notoriously slow. By most accounts, such proceedings typically take more than three
- 10 - COURT’S SEPTEMBER 5, 2008 TENTATIVE ORDER
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 and a half years to complete before any administrative appeal or judicial review. See discussion
2 infra at 14-16. Staying this case in deference to such a protracted process would all but ensure
3 that the Rambus patents will expire before any competent tribunal—this Court or the PTO—is
4 able to adjudicate fully Rambus’s patent claims. The result would be to deny Rambus any
5 possible injunctive relief and to postpone indefinitely any damages award. These harms alone
6 furnish sufficient grounds to deny the requested stay.
7 Proceeding to trial, in contrast, would promote efficiency without compromising
8 Samsung’s ability to mount its validity challenge in both forums. The overlap between the
9 claims-in-suit and the claims subject to PTO review is limited to those challenged by Samsung in
10 inter partes reexaminations. 3 Congress contemplated that inter partes proceedings and litigation
11 could run concurrently, with the first final decision carrying preclusive effect in the parallel
12 proceedings. In this respect, despite what Samsung has suggested, inter partes reexaminations
13 differ from ex parte reexaminations, which may undercut even completed and final federal court
14 judgments of validity. Because this litigation has progressed significantly and is set for trial in
15 the next few months, it is likely to reach final judgment—and thus to settle the overlapping
16 validity issues pending in the PTO—well before the issuance of a final Certificate by the PTO.
17 At the same time, the progress and trajectory of this litigation poses no cognizable prejudice to
18 Samsung, which can advance the same invalidity theories it has asserted in the reexamination.
19 Even apart from the comparative posture of the cases, which favors the federal litigation, a
20 stay would produce little in the way of efficiency or simplification. This case is broader than the
21 inter partes reexamination; it involves more parties, and there are more patents, more claims, and
22 more defenses at issue. Accordingly, any resolution by the PTO would not obviate the need to
23 proceed to trial in the ’334 case.
24 A. The Preclusion Rules Governing Parallel Inter Partes and Ex Parte
Reexaminations Are Different, and Favor the Federal Court Litigation Here
25
At the Hearing, counsel for Samsung argued that this Court should stay the ‘334 case in
26
3
27 Samsung has filed an ex parte reexamination with respect to the ‘195 patent, but no claims from
that patent were selected for trial. Hynix’s Req. for Judicial Not. of Papers From Reexamination
28 of Rambus Inc.’s Patents (“Hynix RJN”) 2 (Docket No. 3710, Case No. 00-20905).
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 deference to Samsung’s pending reexaminations based upon the potential effect of a certificate
2 cancelling Rambus’s claims. If this litigation were to result in a finding of validity, counsel
3 maintained, “that did not prevent the patent office from finding a ... substantial new question of
4 patentability.” 9/5/08 RT 37-38. Counsel then cited the Federal Circuit’s recent decision in In re
5 Swanson, which he construed to permit the PTO to invalidate a patent on reexamination even if
6 “found valid in district court, affirmed in [the] Federal Circuit.” Id.
7 That argument is wrong as a matter of law, and the cited authority, inapposite. The
8 relevant reexaminations here are inter partes challenges, and Congress has specifically provided
9 for parity of preclusion; if the federal courts arrive at a final validity determination first, that
10 ruling bars the PTO from proceeding with any related inter partes reexamination. The threat of
11 wasted federal court litigation looms larger in the ex parte context, where the PTO is free to
12 second-guess a final adjudication of validity. This means the risk that Samsung’s reexamination
13 challenge will interfere with the federal litigation in this case turns largely on timing and overlap,
14 two factors that weigh decidedly against a stay.
15 Ex Parte Reexaminations: In a situation involving concurrent federal court and ex parte
16 reexaminations, even a final judgment of validity in patent litigation does not foreclose the PTO
17 from reaching the opposite conclusion in an ex parte proceeding. See Ethicon, Inc. v. Quigg, 849
18 F.2d 1422, 1429 n.3 (Fed. Cir. 1988) (explaining that a finding that patentholder failed to prove
19 nonvalidity is not binding on the PTO). The Federal Circuit has explained that the standards
20 governing the two proceedings are different; patent defendants must offer clear and convincing
21 evidence of invalidity, whereas the requesting party need only meet a preponderance standard in a
22 reexamination. See id. There is, moreover, no presumption of validity. See id. Because “the two
23 forums have different standards of proof for determining invalidity,” the PTO lacks authority
24 even to stay its proceeding pending the outcome of patent litigation. Id. at 1429. Accordingly,
25 when the federal court litigation is at a relatively early stage or other factors favor a stay, the one-
26 way preclusion rule applicable to ex parte reexaminations may move a court to defer to the PTO.
27 See Spa Syspatronic, AG v. Verifone, Inc., 2008 WL 1886020 at *4 (E.D. Tex. Apr. 25, 2008)
28 (noting the risk of proceeding with the case only to have the PTO later cancel the patent in ex
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 parte reexamination, particularly given the complete overlap of patents and claims between the
2 two proceedings and that discovery was still in infancy).
3 Inter Partes Reexaminations: The statutory scheme Congress devised for inter partes
4 reexamination, which was added in 1999, is quite different. This scheme permits a party
5 challenging the validity of a patent to pursue PTO reexamination or civil litigation in federal
6 court, but provides that a final determination in either proceeding carries preclusive effect in the
7 other forum. See 35 U.S.C. §§ 315, 317. Thus, if a request for inter partes reexamination is
8 granted, the requesting party “is estopped from asserting at a later time, in any civil action ... the
9 invalidity of any claim finally determined to be valid and patentable on any ground which the
10 third party requester raised or could have raised during the inter partes reexamination
11 proceedings.” 35 U.S.C. § 315(c). Conversely, once a civil action results in a judgment that a
12 party failed to prove the invalidity of a patent claim, “neither that party nor its privies may
13 thereafter request reexamination of any such patent claim … that the party or its privies raised or
14 could have raised in any such civil action ... and an inter partes reexamination requested by that
15 party or its privies on the basis of such issues may not thereafter be maintained.” 35 U.S.C. §
16 317(b). The statute’s “reciprocal estoppel provisions make clear that parties challenging patent
17 validity determinations are free to pursue inter partes review from the PTO and litigation
18 simultaneously; however, the completion of either process will estop any parallel proceedings.”
19 Sony Computer Entm’t Am., Inc. v. Dudas, 2006 WL 1472462 at *6 (E.D. Va. May 22, 2006).
20 That Congress contemplated parity between validity determinations by federal courts and inter
21 partes reexaminations is reflected in its express authorization of PTO stays for “good cause.” 35
22 U.S.C. § 314. Thus, whereas the PTO is obliged in the ex parte context to go forward with
23 reexaminations, and thus poses an inherent threat of undercutting federal court findings, the
24 agency may stay its hand in an inter partes proceeding. See 37 C.F.R. § 1.987.
25 In the inter partes context, then, preclusion rules are generally a neutral factor, and the
26 propriety of a stay turns more heavily on timing and overlap (i.e., simplification of issues). If a
27 stay pending inter partes reexamination is sought early in the federal court litigation, and if the
28 reexamination could potentially dispose of the issues presented there, a stay may be appropriate.
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 See Cima Labs, Inc. v. Actavis Group HG, 2007 WL 1672229 (D.N.J. June 7, 2007) (noting that
2 “discovery is in its beginning stage ... with a trial date far from being set”). But if the patent
3 litigation is far along, as it is here, and if the pending reexamination covers only a portion of the
4 claims and defenses in suit, as it does here, the stay calculus will often weigh against a stay. See
5 Bacus Lab., Inc. v. Aperio Tech., Inc., 2005 WL 475158 (N.D. Ill. Mar. 1, 2005) (denying stay
6 where case was “already over two years old” and reexam would not impact all claims). After all,
7 the expeditious conclusion of the patent litigation could terminate the reexamination proceedings.
8 On this score, Samsung’s reliance on the decision in In re Swanson is misplaced. In re
9 Swanson did not involve an inter partes reexamination; it involved an ex parte reexamination.
10 That is why the Court found no difficulty in holding that the PTO could properly cancel claims
11 even after the Federal Circuit affirmed a trial curt finding of validity. 2008 WL 4068691, at *7.
12 For similar reasons, Samsung is simply wrong in suggesting that Congress preferred PTO validity
13 determinations in inter partes challenges to federal court determinations. 9/5/07 RT 37 (“At
14 some point, and I would submit that point is here, it is not the right thing for an Article III court to
15 do that.”). Congress specifically decided that a final judgment of validity by a federal court
16 would be binding on the PTO, and that the PTO could therefore stay its proceedings in deference
17 to a federal court. In this situation, “a party can choose to run horses in both races, but the
18 conclusion of one race automatically ends the other.” Dudas, 2006 WL 1472462, at *6.
19 B. Rambus Stands to Suffer Irreparable Prejudice If a Stay Is Granted
20 1. A Stay Pending PTO Reexamination Would Cause Protracted Delay
21 Inter partes reexaminations are an iterative process, with a tiered review structure, many
22 opportunities for party input, and wide agency discretion to revisit and redo completed stages. As
23 a result, the proceedings are marked by long delays, with most cases taking years to complete.
24 The inter partes process is fluid and flexible. Once a reexamination request is granted—
25 and they almost always are (see infra at 23)—the PTO examiner will issue an initial Office
26 Action allowing or rejecting the claims. See 37 C.F.R. § 1.935; MPEP § 2606. The patent owner
27 may respond by filing comments, modifying claims, or adding new claims, and the requester may
28 file reply comments. See 35 U.S.C. § 314. After the PTO considers the submissions and issues
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 its Action Closing Prosecution, the parties may again file written comments and arguments. See
2 37 C.F.R. § 1.951; MPEP § 2671.02. If the examiner elects to modify the ruling, he or she
3 “should ordinarily reopen the prosecution.” MPEP § 2673.01 (emphasis added).
4 This process has proven to be enormously time consuming. Separate studies, using PTO
5 data, have determined that contested reexamination proceedings take an average of over three and
6 half years to complete, before administrative appeal and judicial review. See Hamilton Decl.
7 Exh. A (Institute for Progress, Reexamining Inter Partes Rexam at 12 (2008) (“IFP Report”)
8 (finding average pendency of 43.5 months); 4 see also Exh. B (Andrew S. Baluch & Stephen B.
9 Maebius, The Surprising Efficacy of Inter Partes Reexaminations at 11 (2008) (“Foley Report”)
10 (finding average pendency of 42.5 months); Exh. C (Stuart Weinberg, Worried About That
11 Infringement Case? Ask For A Reexam, Dow Jones Newswires, at 1, May 30, 2008 (“Weinberg”)
12 (noting 43.5 months average pendency)). Although the PTO has claimed an average pendency of
13 32.7 months for inter partes proceedings, 5 those statistics reflect all such reexaminations,
14 whether contested or uncontested. If uncontested reexaminations are stripped out, the average
15 pendency is roughly 40 months. IFP Report at 12; Foley Report at 11.
16 The likely delay is still longer after factoring in administrative appeals and court review.
17 The losing party in an inter partes reexamination may appeal to the Board of Patent Appeals and
18 Interferences (BPAI), 37 C.F.R. § 1.953, and from there to the Federal Circuit, 35 U.S.C. § 141.
19 Only after the time for appeal has expired or the appeal and any remand proceedings have
20 concluded can the PTO issue a Reexamination Certificate. 35 U.S.C. § 316. “[O]nly three inter
21 partes reexaminations have received a BPAI decision since 1999, and each took 4 or 5 years to
22 reach that point.” Network Appliance Inc. v. Sun Microsystems, Inc., 2008 WL 2168917 at *5
23 (N.D. Cal. May 23, 2008); see also IFP Report at 13 (finding average of 58.3 months, or 4.8
24
4
The Institute For Progress is a think tank founded by Kevin Rivette, chairman of the PTO’s
25 Public Patent Advisory Committee. The authors of the study are Ralph Eckardt and Max Blaxill,
both fellows at the Institute. Weinberg at 1-2; cf. Network Appliance, 2008 WL 2168917 at *6
26 (considering statistical analyses of PTO data despite hearsay and other evidentiary objections).
5
27 Hamilton Decl. Exh. D (Robert Greene Sterne et al., Reexamination Practice With Concurrent
District Court Patent Litigation, The Sedona Conference Journal, Vol. 9, at 53, 76 (2008)
28 (“Sterne Report”)).
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 years, for reexamination to result in a BPAI decision). Remarkably, just one of these three
2 reexaminations has been completed, due to further administrative proceedings after BPAI review.
3 See Hamilton Decl. Exh. E (transactional histories and related BPAI decisions for Reexamination
4 Nos. 95/000,006, 95/000,009, and 95/000,030). “Reality and past experience dictate that several
5 years might very well pass from the time when a final office action is issued by the PTO to when
6 the claims are finally and officially ‘confirmed’ after appeals.” NTP, Inc. v. Research In Motion,
7 Ltd., 397 F. Supp. 2d 785, 788 (E.D. Va. 2005); see also In re American Acad. of Sci. Tech. Ctr.,
8 367 F.3d 1359, 1362 (Fed. Cir. 2004) (affirming the BPAI ten years after commencement of
9 reexamination proceedings). Indeed, not one inter partes matter has made its way through
10 Federal Circuit review in the 9 years since the procedure was adopted.
11 Far from refuting these data, the article that Samsung counsel cited at the Hearing notes
12 that “the average pendency of a reexamination through the CRU, the BPAI, and the Federal
13 Circuit is 48 to 72 months.” Sterne Report at 60. Thus, even in the quickest possible timeframe
14 contemplated by Samsung’s own source, the reexamination proceedings would not be completed
15 until January 2012, four years after Samsung filed the last of the requests at issue in January
16 2008. Such inevitable delays have made courts reluctant to stay patent litigation in deference to
17 inter partes reexamination. See, e.g., Network Appliances, 2008 WL 2168917 at *5 (finding that
18 delays associated with PTO proceedings weigh against granting stay); Genoa Color Tech., Ltd. v.
19 Samsung Electronics America, Inc., 2008 WL 754681 (S.D.N.Y. Mar. 12, 2008) (denying stay
20 and noting that inter partes reexamination “could take years to complete”). 6 Taken together with
21 the prejudice to Rambus and the advanced stage of this litigation, the long delay that we can
22 expect from Samsung’s inter partes challenges weighs strongly against a stay.
23 2. A Stay Would Seriously Prejudice Rambus by Effectively Imposing a
Compulsory License and Denying Rambus Injunctive Relief
24 6
Even for ex parte reexaminations, which are not subject to parallel estoppel like inter partes
25 proceedings, courts have frequently cited delay as a reason to deny stays pending reexamination.
See, e.g., Fresenius Med. Care Holdings v. Baxter Int’l., Inc., 2007 WL 1655625 at * 5 (N.D. Cal.
26 June 7, 2007) (denying stay and noting the “lengthy delay that would inevitably ensue if a stay
were granted”); Biax Corp. v. Fujitsu Computer Sys. Corp., 2007 WL 614187 at *2 (E.D. Tex.
27 Feb. 26, 2007) (denying stay and observing that “the potential delay for an indefinite period
would likely prejudice Biax”); Lexington Lasercomb I.P.A.G. v. GMR Prods., Inc., 442 F. Supp.
28 2d 1277, 1278 (S.D. Fla. 2006) (similar).
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 If the Court were to grant a stay, the patents-in-suit will almost certainly expire before
2 PTO proceedings and appeals are complete. The Horowitz/Farmwald patents are set to expire in
3 April 2010. Because of deficiencies in Samsung’s initial reexamination requests, the earliest
4 request at issue was not effectively filed until mid-2007. Hamilton Decl. Exh. F (transactional
5 histories for Reexaminations Nos. 95/000,178, 95/001,026, 95/000,250, 95/000,166, 95/000,183).
6 Samsung thereafter filed follow-on requests through early 2008. (Id.) Given the three-to-four
7 year pendency period for most inter partes reexaminations, there is a substantial likelihood that
8 the patents will expire before the PTO issues a certificate on Samsung’s challenge. Indeed, that
9 risk obtains even under the PTO’s skewed pendency average of 32.7 months. When BPAI and
10 Federal Circuit review are considered, there would be little chance of a final determination during
11 the life of the patents.
12 The effect would be to deprive Rambus of its right to seek injunctive relief, and to limit its
13 remedies for infringement to a compulsory license. See Lans v. Digital Equip. Corp., 252 F.3d
14 1320, 1328 (Fed. Cir. 2001) (“The district court cannot enjoin the Computer Companies from
15 infringing an expired patent.”). The prejudice is manifest. The essential attribute of a patent is
16 “the right to exclude others from using his property.” eBay, Inc. v. MercExchange, L.L.C., 547
17 U.S. 388, 392 (2006). It would be unfair to deny Rambus even the possibility of enjoining
18 infringing conduct, particularly since trial is just a few months away. See Soverain Software LLC
19 v. Amazon.com, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005) (“Postponing trial pending
20 reexamination ... only six months prior to trial would unduly prejudice Soverain’s ability to
21 protect its property rights in the patents at issue.”).
22 For the reasons Rambus has set out in the Hynix I case, a reasonable royalty would be
23 inadequate to redress the ongoing harm to its business resulting from the Manufacturers’
24 infringement. See Mem. of P. & A. in Supp. of Rambus Req. for Damages & Equitable Relief
25 10-19 (Docket No. 3818, Case No. 00-20905). 7 The proliferation of infringing products
26
7
27 Micron’s suggestion that Rambus has somehow disavowed injunctive relief (Reply 13), is
meritless, see Rambus’s Reply In Supp. Of Req. For Add’l Damages and Equitable Relief
28 (Docket No. 3735, Case No. 00-20905).
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 marketed by the Manufacturers has severely limited Rambus’s market share and strategic options,
2 and will continue to do so while the Manufacturers are allowed to infringe. This ongoing
3 infringement has forced Rambus to focus on certain specific segments of the DRAM market, and
4 undercut even those opportunities. Only an injunction would allow Rambus to pursue its
5 business model effectively, and in particular, to promote its leadership products. See id.
6 At the Hearing, counsel for Samsung maintained that Rambus’s concerns about delay
7 were misplaced because the PTO has adopted a “central reexamination unit,” which promises to
8 handle reexaminations more expeditiously and cut the time to decision. 9/5/08 RT 32-33. But
9 despite counsel’s insistence that the CRU creates a “new world” (id.), Samsung has offered no
10 support for reduced pendency time or accelerated reexamination speeds. In fact, as the same
11 counsel recognized in a filing made in a different case just a few months ago, “with a grossly
12 backlogged PTO operating with limited resources, the unfortunate truth is that reexamination
13 proceedings can literally take years, assuming they are ever completed at all.” Hamilton Decl.
14 Exh. G (Netapp, Inc.’s Opp’n to Def. Sun Microsystems, Inc.’s Mot. For Partial Stay at 7,
15 Network Appliance, Inc. v. Sun Microsystems, Inc., No. C-07-06053 EDL (N.D. Cal. Apr. 29,
16 2008)). Since the CRU was created in 2005, the PTO’s reexamination workload has increased
17 dramatically; between fiscal 2005 and fiscal 2007, the number of ex parte and inter partes
18 reexaminations rose 32%, from 583 to 769. See Hamilton Decl. Exh. H (USPTO, Performance
19 and Accountability Report: Fiscal Year 2007 at 121 (2007)). It would be surprising if the PTO
20 has been able to reduce meaningfully the pendency time for reexamination despite these increased
21 demands. And any examples of cases that have been handled by this unit with celerity would be
22 too few to offer a reliable prediction of how long it will take Samsung’s inter partes challenge to
23 conclude.
24 Even if we assume that the PTO is able to cut the normal reexamination time in half for
25 the patents-in-suit—and there is no reason to think that is likely—a stay would still for all
26 practical purposes deprive Rambus of its right to seek meaningful injunctive relief. For example,
27 Samsung did not file the relevant reexamination request for the ’8,020 patent until January 31,
28 2008. See Hynix RJN at 8 n.1. Even if it takes just two years rather than the four or five years
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 typical of an inter partes reexamination to complete BPAI review, Rambus would not be able to
2 make its case to the jury until 2010, when its patents will expire. And that is assuming both that
3 the BPAI does not remand to the examiner for further proceedings, and that the parties do not
4 appeal the final PTO decision to the Federal Circuit.
5 All pending reexaminations are in the early stage of the inter partes process. That the
6 PTO has issued initial Office Actions for a subset of patents under reexamination does not mean
7 that a final certificate is imminent. As Samsung well understands, the initial Office Action is
8 merely the first step of a long process, and the average pendency is still a hefty 39.5 months even
9 after the initial office action. See IFP Report at 12. Notably, it is in Samsung’s interest to try to
10 delay the PTO proceeding. Because Rambus’s ability to obtain injunctive relief is tied to the
11 limited duration of the patents in suit, Samsung has the incentive to stretch out PTO proceedings
12 as much as it can to avoid a trial on the merits before the patents expire. There is no assurance
13 that the PTO proceedings would conclude in time to avoid prejudice to Rambus. 8
14 3. A Prompt Trial Would Promote Efficiency Without Prejudicing
Samsung or Other Manufacturers
15
Rather than breaking up this litigation piecemeal, deferring to the PTO on a subset of
16
invalidity contentions while withholding decision on other issues beyond the scope of
17
reexamination, it would be far more efficient to resolve all relevant issues in the ’334 litigation.
18
This Court has jurisdiction to weigh any invalidity contentions that the Manufacturers may wish
19
to interpose, including invalidity theories advanced by Samsung in the pending reexamination. In
20
21 8
It would also be unfair to force Rambus to defer all of its claims, even for patents that are not
22 subject to reexamination, while Samsung selectively challenges a subset of the patents in suit. Of
the ten patents for which Rambus has selected to pursue infringement claims at trial, only five are
23 subject to parallel reexamination proceedings: the ’120 patent, the ’8,020 patent, the ’863 patent,
the ’916 patent, and the ’184 patent. Compare Rambus Inc.’s Election of Patent Claims for Trial
24 (Docket No. 2128, Case No. 05-00334) with Hynix RJN at 2; Cf. Network Appliances, 2008 WL
2168917 at *5 (finding that stay would put non-moving party at a tactical disadvantage because it
25 would be “forced to litigate only four of seven asserted patents” while moving party could choose
which claims to pursue). Rambus could also be “prejudiced by the lapse of time during
26 reexamination, which could result in loss of evidence and the fading of witness memory.”
Alltech, Inc. v. Cenzone Tech, Inc., 2007 WL 935516, at *2 (S.D. Cal. Mar. 21, 2007).
27 Resolution of Rambus’s willfulness claims, for example, would require witness testimony
regarding events that occurred years ago. A stay of several more years would only heighten the
28 risk that the witness memory might fade and prejudice Rambus’s ability to prove its case.
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 these circumstances, staying the federal court action in favor of the later-filed PTO inter partes
2 challenge would truly be to have the tail wag the dog.
3 Considerations of judicial economy and efficiency favor prompt resolution of the parties’
4 claims at trial. If Rambus prevails, the Manufacturers will be estopped from reasserting any
5 previously adjudicated invalidity arguments in reexamination. Conversely, if the Manufacturers
6 meet their burden of proving the patents invalid, the PTO proceedings will become moot. Trial is
7 less than four months away. Barring a stay, the parties can reasonably expect final judgment to
8 be rendered middle-to-late 2009. In contrast, the relevant PTO reexamination requests were not
9 granted until fall 2007 and spring 2008, more than two years after the ’334 action commenced.
10 Any stay pending reexamination will likely last beyond 2010—and that is assuming that the PTO
11 determination is not appealed to the Federal Circuit, as it likely will be. Since this case will most
12 likely be completed before the PTO reexaminations, it makes no sense to delay resolution of the
13 case in deference to the slower PTO proceeding. See Fresenius, 2007 WL 1655625 at *4.
14 A prompt trial here would also expedite appellate review. Whether Samsung’s invalidity
15 claims are adjudicated in this Court or by the PTO, it is highly probable that the Federal Circuit
16 will have the final say on the matter. If the trial takes place as scheduled in January, the parties
17 will be in position to file appeals sometime in 2009. However, in the reexamination proceeding,
18 an adverse ruling from the PTO examiner would have to be appealed administratively to the
19 BPAI before any Federal Circuit review. See 35 U.S.C. §§ 141, 315. This means the
20 reexamination will likely not proceed to Federal Circuit review until 2012 at the earliest,
21 approximately four or five years after the relevant reexamination requests were filed. Letting this
22 litigation proceed is clearly the more efficient approach.
23 Neither Samsung nor the other Manufacturers stands to suffer any prejudice from prompt
24 resolution of Rambus’s infringement claims at trial. Samsung claims it would be prejudiced if it
25 has to defend those claims “without the benefit of the resolution provided by the reexamination
26 proceedings.” Samsung Reply 10. But there is no reason why Samsung could not simply submit
27 its invalidity contentions to this Court and the jury for adjudication. Samsung’s suggestion that
28 the issues are better presented to the PTO runs headlong into Congress’s judgment that inter
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 partes and federal court adjudication are in parity. See discussion supra at 13. For similar
2 reasons, it is irrelevant that the burden of proof and applicable standards are relaxed in inter
3 partes reexaminations; notwithstanding these differences, Congress expressly concluded that final
4 federal court validity judgments would bar inter partes proceedings. And in the unlikely event
5 that the PTO were to issue a certificate first, Samsung would be free to assert that ruling here.
6 C. A Stay Should Not be Imposed on the Eve of Trial, with Discovery Complete
7 “Parties should not be permitted to abuse the process by applying for reexamination after
8 protracted, expensive discovery or trial preparation.” Digital Magnetic Sys., Inc. v. Ansley, 213
9 U.S.P.Q. 290 (W.D. Okla. 1982). Thus, courts have adopted a “clear rule ... that, where, as here,
10 discovery has commenced, claim construction has been briefed, and dispositive motions have
11 been filed and disposed of, courts should not grant stays for reexamination before the PTO.”
12 Fresenius, 2007 WL 1655625 at *3.
13 The claims and defenses in this case are well on their way to adjudication. With a few
14 limited exceptions, fact discovery is now closed. Opening expert reports have been served.
15 Claim construction was completed long ago. A trial date has been set for January, less than four
16 months from now. It is far too late to stay these proceedings in favor of Samsung’s belated
17 reexamination requests. See, e.g., Alltech, 2007 WL 935516 (denying stay five months before
18 trial); Soverain Software, 356 F. Supp. 2d 660 at 663 (denying stay six months before trial);
19 Output Tech. Corp. v. Dataproducts Corp., 22 U.S.P.Q. 2d 1072 (W.D. Wash. 1991) (concluding
20 that “a stay is not justified here where discovery is well underway” and trial is eight months
21 away). A stay “would likely cause undue prejudice to Plaintiff, who has expended resources in
22 reliance on the current discovery and trial dates.” Alltech, 2007 WL 935516 at *2.
23 The relative delay in instituting inter partes review also weighs against disrupting this
24 case. Samsung did not file the first of its reexamination requests until August 2006 (’916 patent),
25 when this action had already been pending for more than a year and half. For the ’8,020 patent,
26 the initial reexamination request was not filed until January 2008, three years after this case was
27 filed. A stay is particularly inappropriate where the moving party delayed in seeking
28 reexamination. Fujitsu, Inc. v. Nanya Tech. Corp., 2007 WL 3314623, at *2 (N.D. Cal. Nov. 6,
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 2007) (denying stay partly because moving party waited until nine months after the filing of
2 patent litigation to request reexamination); Remington Arms Co. v. Modern Muzzleloading, Inc.,
3 1998 WL 1037920, at *3 (M.D.N.C. Dec. 17, 1998) (defendant’s “unjustified delay” in
4 requesting reexamination was the “most compelling reason for denying the stay”).
5 Samsung’s reply simply ignores the “clear rule” that stays should not be granted on the
6 eve of trial. See Fresenius, 2007 WL 1655625, at *3. The cases cited by Samsung are
7 distinguishable because the parties were not ready for trial, or because the party opposing the stay
8 had itself initiated reexamination. See Samsung Reply 8-10. 9 Indeed, Samsung does not cite a
9 single case where a stay was granted even though the parties were ready for trial and the party
10 seeking the stay had initiated the parallel PTO proceeding. To allow Samsung to “now use the
11 reexamination process to get this case stayed would be to allow a defendant to use the
12 reexamination as a mere dilatory tactic.” Freeman v. Minnesota Min. & Mfg. Co., 661 F. Supp.
13 886, 888 (D. Del. 1987).
14 D. A Stay Would Not Simplify Issues For Trial
15 1. A Trial Will Be Necessary Regardless of the Outcome of
Reexamination Proceedings
16
Only five of the ten patents Rambus has selected for trial are subject to concurrent
17
reexamination proceedings. The reexamination’s potential for simplifying this case is therefore
18
limited. Even if Samsung prevails on all of its invalidity contentions in reexamination, this matter
19
will still proceed to trial on the remaining patents. That counsels against granting the stay,
20
particularly since any potential for simplification must be balanced against the serious prejudice
21
to Rambus and the eleventh-hour timing of the stay request. See Gladish v. Tyco Toys, Inc., 29
22
23 9
ASCII Corp. v. STD Entm’t USA, Inc., 844 F. Supp. 1378, 1381 (N.D. Cal. 1994) (“[T]he parties
24 are in the initial stages of the lawsuit and have undertaken little or no discovery.”);
MercExchange, L.L.C. v. eBay, Inc., 500 F. Supp. 2d 556, 563 (E.D. 2007) (observing that “it
25 does not appear the parties are presently prepared for trial”); In re Cygnus Telecomms. Tech., LLC
Patent Litig., 385 F. Supp. 2d 1022, 1023 (N.D. Cal. 2005) (“[D]iscovery has not been completed
26 in any of the pending actions involved in the multidistrict litigation. No case is on the verge of
trial.”); Lentek Int’l, Inc. v. Sharper Image Corp., 169 F. Supp. 2d 1360, 1362 (M.D. Fla. 2001)
27 (without discussing the relevant stage of litigation, finding that the plaintiff was “hardly in a
position to complain about the timing of reexamination” because plaintiff itself initiated the PTO
28 proceeding).
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 U.S.P.Q. 2d 1718, 1720 (E.D. Cal. 1993) (denying stay partly because “[a]fter the reexamination,
2 the parties would be right back in this court”); Biax Corp., 2007 WL 614187 at *2 (denying stay
3 where reexamination “may only simplify the case to a limited degree” and “some claims and
4 issues will likely remain after the reexamination has been completed”); Enprotech Corp. v.
5 Autotech Corp., 15 U.S.P.Q. 2d 1319 (N.D. Ill. 1990) (denying stay where “the reexamination
6 will not resolve everything”); see also Network Appliances, 2008 WL 2168917 at *3.
7 Even for patents under reexamination, a PTO Certificate cancelling some of the
8 challenged claims would not obviate the need for trial here. The scope of PTO reexamination is
9 narrow; the only prior art references the PTO may consider are publications and patents, and the
10 PTO is not allowed to reexamine based on other grounds for invalidity, such as prior sales. See
11 35 U.S.C. §§ 301, 311. The Manufacturers have reserved the right to argue invalidity based on
12 prior sales, best mode, and other grounds not subject to PTO reexamination. Unless Samsung
13 prevails on all of its invalidity contentions in reexamination, this Court will still have to
14 adjudicate issues of patent validity for patents the PTO has reexamined. See Gladish, 29 U.S.P.Q.
15 2d at 1720 (reexamination unlikely to simplify because “[u]nless all claims of the patent were
16 cancelled as a result of the reexamination, validity would remain a contested issue in this action”).
17 2. Speculation About the Ultimate Outcome of Reexamination Cannot be
the Basis for a Stay
18
Samsung suggests that its likelihood of prevailing before the PTO is a factor supporting a
19
stay. See 9/5/08 RT 34. But until PTO proceedings are complete and appeals exhausted, it is
20
impossible to predict with any confidence what the ultimate outcome will be.
21
The fact that the PTO granted Samsung’s reexamination requests says virtually nothing
22
about their merits. After all, the PTO grants 95% of inter partes reexamination requests. Sterne
23
Report at 76. While the PTO has issued initial Office Actions rejecting the relevant claims of
24
three patents Rambus has selected for trial—the ’120, ’916, and ’863 patents—these actions shed
25
little light on the probable outcome of reexamination. The initial Office Action is merely the
26
opening step in a long process of feedback and commentary between the patent owner, the
27
challenger, and the PTO examiner, which still has years to run. See discussion supra at 14-15.
28
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 Rather than speculating about what the PTO may or may not do in the future, it is more efficient
2 and fair for this Court to simply adjudicate all invalidity contentions at trial.
3 The PTO’s certificate statistics offer no reliable basis to decide whether Samsung or
4 Rambus is more likely to prevail in the reexamination. When the uncontested proceedings are
5 stripped out of the data, “the requester’s likelihood of having all claims cancelled or disclaimed in
6 inter parte proceedings is 53%.” Foley Report at 10. That is essentially a coin toss, with
7 Samsung and Rambus equally likely to obtain a favorable outcome. Of course, “these general
8 and limited statistics are not very helpful in predicting the outcome of issuing a stay in this case.”
9 Network Appliances, 2008 WL 2168917 at *4. But if these statistics are accorded any weight at
10 all, they merely show that it is better to have the patent validity issues resolved on the merits in
11 this Court than to postpone decision indefinitely in deference to a proceeding with only even odds
12 of resolving but a portion of this case.
13 IV. NEITHER HYNIX I NOR THE DELAWARE ACTION WARRANTS A STAY
14 Where “there is even a fair possibility that [a] stay [pending a related action] ... will work
15 damage to some one else, the stay may be inappropriate absent a showing by the moving party of
16 hardship or inequity.” Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059,
17 1066 (9th Cir. 2007) (quotations omitted). For the reasons discussed above, any stay pending a
18 Hynix I appeal or the Delaware matter would seriously prejudice Rambus. The only
19 countervailing prejudice the Manufacturers have identified is the fact that they will finally be
20 called upon to defend Rambus’s claims at trial. “[B]eing required to defend a suit, without more,
21 does not constitute a clear case of hardship and inequity” warranting a stay. Lockyer v. Mirant
22 Corp., 398 F.3d 1098, 1112 (9th Cir. 2005).
23 Hynix complains about purported overlap between Hynix I and this action (Hynix Reply
24 4-5), but there is nothing unfair or wasteful about permitting the two cases to proceed
25 simultaneously. This case involves different accused Hynix products than the ’905 case and
26 Rambus, no less so than Hynix, will participate in and incur expenses in both matters. Likewise,
27 Micron can claim no legitimate prejudice from having to participate in the January trial. Micron
28 insists that a judgment in Delaware is imminent (9/5/08 RT 30); if this is so, however, the Court
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW
1 can deal with the Delaware judgment and determine its effect, if any, when it is actually entered.
2 On the other hand, if the Delaware case continues to proceed at a slow pace, a stay would
3 irredeemably prejudice Rambus by stripping it of the right to seek injunctive relief. See Levya v.
4 Certified Grocers of Cal., Ltd., 593 F.2d 857, 864 (9th Cir. 1979) (“A stay should not be granted
5 unless it appears likely the other proceedings will be concluded within a reasonable time.”) The
6 same is true of a stay pending review in Hynix I.
7 In any event, the purported efficiency gains from a stay are limited, if not wholly illusory.
8 Of the ten patents Rambus has selected for trial, only four are implicated in the Delaware action
9 or in Hynix I. 10 It would not serve judicial efficiency or economy to stay this action and allow
10 Rambus’s claims under six other patents to languish on the Court’s docket on the off-chance that
11 two substantially narrower cases might, at some future date, pare down the ’334 trial. Given that
12 all three cases will likely be resolved ultimately in the Federal Circuit, the better approach is to
13 proceed to trial and judgment.
14 V. CONCLUSION
15 For the foregoing reasons, Rambus respectfully requests that this Court order a joint
16 DDR2+ trial on infringement, validity, and damages, and deny the Manufacturers’ motions to
17 stay.
18 DATED: September 19, 2008 MUNGER, TOLLES & OLSON LLP
SIDLEY AUSTIN LLP
19 McKOOL SMITH P.C.
20
21 By: /s/ Gregory P. Stone

GREGORY P. STONE
22
Attorneys for RAMBUS INC.
23
24
10
25 Hynix cites no authority to support its view that this Court should not consider the likelihood of
reversal in Hynix I in deciding the motion to stay. Case law says otherwise. See TIP Sys., LLC v.
26 SBC Operations, Inc., 2008 WL 594258 (S.D. Tex. Mar. 4, 2008) (“[w]hen presented with a
motion for discretionary stay pending appeal,” courts should consider “whether the movant has
27 made a showing of likelihood of success on the merits”); Arnold v. Garlock, Inc. 278 F.3d 426,
438 (5th Cir. 2001). That the claim constructions Hynix intends to appeal have already been
28 considered and adopted by the Federal Circuit in Infineon further counsels against a stay.
CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

Rambus'S Supplemental Brief On The Court'S September 5, 2008 Tentative Order

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Rambus'S Supplemental Brief On The Court'S September 5, 2008 Tentative Order

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Case 5:05-cv-00334-RMW Document 2239 Filed 09/19/2008 Page 1 of 32

14 NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

16 RAMBUS INC., CASE NO.: C 05-00334 RMW

1 CASE NO.: C 06-00244 RMW

4 Alltech, Inc. v. Cenzone Tech, Inc.,

9 35 U.S.C. § 141 ....................................................................................................................... 15, 20

9 in favor of including damages in the January trial on infringement and validity.

20 validity in a single trial before the same jury.

26 products—and thus the infringement—extends back to earlier JEDEC-standard designs. At the

21 By: /s/ Gregory P. Stone

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