rambus brief on structure of jan 22 trial

8/14/2019 Rambus Brief on Structure of Jan 22 Trial

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RAMBUSS SUPPLEMENTAL BRIEF ON THECOURTS SEPTEMBER 5, 2008 TENTATIVE ORDER

CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

Gregory P. Stone (State Bar No. 078329)Steven M. Perry (State Bar No. 106154)Sean Eskovitz (State Bar No. 241877)MUNGER, TOLLES & OLSON LLP355 South Grand Avenue, 35 th FloorLos Angeles, California 90071-1560Telephone: (213) 683-9100Facsimile: (213) 687-3702Email: [email protected];[email protected]; [email protected]

Peter A. Detre (State Bar No. 182619)Carolyn Hoecker Luedtke (State Bar No. 207976)Jennifer L. Polse (State Bar No. 219202)MUNGER, TOLLES & OLSON LLP560 Mission Street, 27 th FloorSan Francisco, California 94105Telephone: (415) 512-4000Facsimile: (415) 512-4077

Email: [email protected];[email protected]; [email protected]

Attorneys for RAMBUS INC.

Rollin A. Ransom (State Bar No. 196126)SIDLEY AUSTIN LLP555 West Fifth Street, Suite 4000Los Angeles, California 90013-1010Telephone: (213) 896-6000Facsimile: (213) 896-6600Email: [email protected]

Pierre J. Hubert (Pro Hac Vice)Craig N. Tolliver (Pro Hac Vice)McKOOL SMITH PC300 West 6th Street, Suite 1700Austin, Texas 78701Telephone: (512) 692-8700Facsimile: (512) 692-8744Email: [email protected];[email protected]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

RAMBUS INC.,

Plaintiffs,

vs.

HYNIX SEMICONDUCTOR, INC., et al.,

Defendants.

CASE NO.: C 05-00334 RMW

RAMBUSS SUPPLEMENTAL BRIEF ONTHE COURTS SEPTEMBER 5, 2008TENTATIVE ORDER

Hearing: September 24, 2008Time: 2:30 p.m.Courtroom: 6Judge: Hon. Ronald M. Whyte

RAMBUS INC.,

Plaintiff,

v.

SAMSUNG ELECTRONICS CO., LTD.,et al.,

Defendants.



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CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

RAMBUS INC.,

Plaintiff,

v.

MICRON TECHNOLOGY, INC., et al.,

Defendants.



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TABLE OF CONTENTS

Page

- i -


CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

I. INTRODUCTION .............................................................................................................. 1

II. RAMBUS CONCURS IN THE COURTS TENTATIVE DECISION TO HOLDA CONSOLIDATED TRIAL ON INFRINGEMENT AND VALIDITY, BUTSUBMITS THAT THE TRIAL SHOULD INCLUDE DAMAGES.................................. 2

A. Common Issues of Fact Overwhelmingly Favor A Consolidated Trial onInfringement and Validity for all DDR2+ products................................................ 2

1. The Consolidated Trial Promotes Judicial Economy.................................. 2

2. The Prejudice Concerns Invoked by the Manufacturers Do NotOutweigh the Efficiencies of a Consolidated DDR2+ Trial ....................... 3

B. Trying Infringement and Damages Together Before The Same Jury WouldFurther Judicial Economy and Efficiency............................................................... 7

1. The Same Efficiency Considerations Favor Trying Damages andLiability in a Single Consolidated Proceeding............................................ 7

2. Even if the Court Tries Liability Separately From Damages, theSame Jury Should be Empanelled for Both Phases .................................... 9

3. Once the Jury Determines Damages, the Court Can Proceed toBifurcated Willfulness Trials .................................................................... 10

III. GRANTING A STAY PENDING PTO REEXAMINATION WOULDIRREPARABLY HARM RAMBUS AND UNDERMINE JUDICIALECONOMY ...................................................................................................................... 10

A. The Preclusion Rules Governing Parallel Inter Partes and Ex Parte Reexaminations Are Different, and Favor the Federal Court Litigation Here...... 11

B. Rambus Stands to Suffer Irreparable Prejudice If a Stay Is Granted.................... 14

1. A Stay Pending PTO Reexamination Would Cause ProtractedDelay ......................................................................................................... 14

2. A Stay Would Seriously Prejudice Rambus by Effectively Imposinga Compulsory License and Denying Rambus Injunctive Relief ............... 16

3. A Prompt Trial Would Promote Efficiency Without PrejudicingSamsung or Other Manufacturers ............................................................. 19

C. A Stay Should Not be Imposed on The Eve of Trial, with DiscoveryComplete ............................................................................................................... 21

D. A Stay Would Not Simplify Issues For Trial........................................................ 22

1. A Trial Will Be Necessary Regardless of the Outcome of Reexamination Proceedings...................................................................... 22

2. Speculation About the Ultimate Outcome of Reexamination Cannotbe the Basis for a Stay............................................................................... 23


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TABLE OF CONTENTS(continued)

Page

- ii -


CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

IV. NEITHER HYNIX I NOR THE DELAWARE ACTION WARRANTS A STAY .......... 24

V. CONCLUSION................................................................................................................. 25


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TABLE OF AUTHORITIES

Page(s)

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CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

F EDERAL C ASES

Alltech, Inc. v. Cenzone Tech, Inc. ,2007 WL 935516 (S.D. Cal. Mar. 21, 2007) .................................................................... 19, 21

Arkie Lures, Inc. v. Gener Larew Tackle, Inc. ,119 F.3d 953 (Fed. Cir. 1997)................................................................................................... 4

Arnold v. Garlock, Inc.278 F.3d 426 (5th Cir. 2001)................................................................................................... 25

ASCII Corp. v. STD Entmt USA, Inc. ,844 F. Supp. 1378 (N.D. Cal. 1994) ....................................................................................... 22

Belmont Textile Machinery Co. v. Superba ,48 F. Supp. 2d 521 (W.D.N.C. 1999) ....................................................................................... 9

Biax Corp. v. Fujitsu Computer Systems Corp. ,2007 WL 614187 (E.D. Tex. Feb. 26, 2007) .................................................................... 16, 23

Brown Williamson Tobacco v. Phillip Morris , Inc. 229 F.3d 1120 (Fed. Cir. 2000)................................................................................................. 9

Dependable Highway Express, Inc. v. Navigators Ins. Co. ,498 F.3d 1059 (9th Cir. 2007)................................................................................................. 24

Digital Magnetic Sys., Inc. v. Ansley ,213 U.S.P.Q. 290 (W.D. Okla. 1982) ..................................................................................... 21

eBay, Inc. v. MercExchange, L.L.C. ,547 U.S. 388 (2006)................................................................................................................ 17

Ecolochem, Inc. v. Southern Cal. Edison Co. ,

227 F.3d 1361 (Fed. Cir. 2000)................................................................................................. 6 Enprotech Corp. v. Autotech Corp. ,

15 U.S.P.Q. 2d 1319 (N.D. Ill. 1990) ..................................................................................... 23

Ethicon, Inc. v. Quigg ,849 F.2d 1422 (Fed. Cir. 1988)............................................................................................... 12

Freeman v. Minnesota Min. and Mfg. Co. ,661 F. Supp. 886 (D. Del. 1987)............................................................................................. 22

Fresenius Medical Care Holdings v. Baxter Intl., Inc. ,2007 WL 1655625 (N.D. Cal. June 7, 2007) ........................................................ 16, 20, 21, 22

Fujitsu, Inc. v. Nanya Technology Corp. ,

2007 WL 3314623 (N.D. Cal. Nov. 6, 2007).......................................................................... 21Genoa Color Technologies, Ltd. v. Samsung Electronics America, Inc. ,

2008 WL 754681 (S.D.N.Y. Mar. 12, 2008) .......................................................................... 16

Gladish v. Tyco Toys, Inc. ,29 U.S.P.Q. 2d 1718 (E.D. Cal. 1993).............................................................................. 22, 23

Golden Trade S.R.L. v. Lee Apparel Co. ,1997 WL 373715 (S.D.N.Y. June 25, 1997)......................................................................... 3, 5


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TABLE OF AUTHORITIES(continued)

Page(s)

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CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

In re American Acad. of Sci. Tech. Ctr. ,367 F.3d 1359 (Fed. Cir. 2004)............................................................................................... 16

In re Cygnus Telecomms. Tech., LLC Patent Litig. ,385 F. Supp. 2d 1022 (N.D. Cal. 2005) .................................................................................. 22

In re Swanson ,F.3d , 2008 WL 4068691 (Fed. Cir. Sept. 4, 2008) ............................................... 2, 12, 14

Johns Hopkins Univ. v. Cellpro ,160 F.R.D. 30 (D. Del. 1995).................................................................................................... 7

Lans v. Digital Equip. Corp. ,252 F.3d 1320 (Fed. Cir. 2001)............................................................................................... 17

Lentek Intl, Inc. v. Sharper Image Corp. ,169 F. Supp. 1360 (M.D. Fla. 2001) ....................................................................................... 22

Levya v. Certified Grocers of Cal., Ltd. ,593 F.2d 857 (9th Cir. 1979)................................................................................................... 25

Lexington Lasercomb I.P.A.G. v. GMR Prods., Inc. ,442 F. Supp. 2d 1277 (S.D. Fla. 2006) ................................................................................... 16

Lockyer v. Mirant Corp. ,398 F. 3d 1098 (9th Cir. 2005)................................................................................................ 24

MercExchange, L.L.C. v. eBay, Inc. ,500 F. Supp. 2d 556 (E.D. 2007) ............................................................................................ 22

Network Appliance Inc. v. Sun Microsystems, Inc. ,2008 WL 2168917 (N.D. Cal. May 23, 2008) ...................................................... 15, 16, 23, 24

Northlake Mktg. & Supply, Inc. v. Glaverbel, S.A. ,72 F. Supp. 2d 893 (N.D. Ill. 1999) .......................................................................................... 8

NTP, Inc. v. Research In Motion, Ltd. ,397 F. Supp. 2d 785 (E.D. Va. 2005)...................................................................................... 16

ODonnell v. Watson Bros. Transport. Co. ,183 F. Supp. 577 (D.C. Ill. 1960) ............................................................................................. 9

Output Tech. Corp. v. Dataproducts Corp. ,22 U.S.P.Q. 1072 (W.D. Wash. 1991) .................................................................................... 21

Power-One, Inc. v. Artesyn Techs., Inc. ,556 F. Supp. 2d 591 (E.D. Tex. 2008) ...................................................................................... 6

Remington Arms Co., Inc ., v. Modern Muzzleloading, Inc. ,1998 WL 1037920 (M.D.N.C. Dec. 17, 1998) ....................................................................... 22

Sony Computer Entertainment Am., Inc. v. Dudas ,2006 WL 1472462 (E.D. Va. May 22, 2006) ................................................................... 13, 14

Soverain Software LLC v. Amazon.com, Inc. ,365 F. Supp. 2d 660 (E.D. Tex. 2005).............................................................................. 17, 21

Stratoflex, Inc. v. Aeroquip Corp. ,713 F.2d 1530 (Fed. Cir. 1983)................................................................................................. 4


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TABLE OF AUTHORITIES(continued)

Page(s)

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CV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

Syntex (U.S.A.) Inc. v. Paragon Optical Inc. ,7 U.S.P.Q. 2d 1001 (D. Ariz. 1987).......................................................................................... 9

Telemac Corp. v. Teledigital, Inc. ,405 F. Supp. 2d 1107 (N.D. Cal. 2006) .................................................................................. 10

TIP Systems, LLC v. SBC Operations, Inc. ,2008 WL 594258 (S.D. Tex. Mar. 4, 2008)............................................................................ 25

TWM Mfg. Co. v. Dura Corp. ,789 F.2d 895 (Fed. Cir. 1986)................................................................................................... 9

F EDERAL STATUTES

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

35 U.S.C. 301............................................................................................................................. 23

35 U.S.C. 311............................................................................................................................. 2335 U.S.C. 314....................................................................................................................... 13, 14

35 U.S.C. 315....................................................................................................................... 13, 20

35 U.S.C. 316............................................................................................................................. 15

35 U.S.C. 317............................................................................................................................. 13

FEDERAL R EGULATIONS

37 C.F.R. 1.935 .......................................................................................................................... 14

37 C.F.R. 1.951 .......................................................................................................................... 14

37 C.F.R. 1.953 .......................................................................................................................... 15

37 C.F.R. 1.987 .......................................................................................................................... 13

T REATISES

9A Wright & Miller, Federal Practice & Procedure: Civil 3d 2391 (3d ed. 2008).................... 9


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- 1 -RAMBUSS SUPPLEMENTAL BRIEF ON THE

COURTS SEPTEMBER 5, 2008 TENTATIVE ORDERCV 05-02298 RMW; C 05-334 RMW; C 06-244 RMW

I. INTRODUCTION

Rambus concurs in the Courts tentative decision to hold a consolidated trial on

infringement and validity with respect to the Manufacturers DDR2 and subsequent DRAM

products. Rambus does not oppose severing the claims against Nanyas and Samsungs SDRAM

and DDR devices, nor does it oppose bifurcated, individual trials to a single jury on willfulness.

While Rambus believes these issues could all be fairly presented in a single trial, the Courts

approach to these aspects of the case is reasonable and pragmatic. Rambus submits, however,

that the efficiency and fairness concerns supporting consolidation extend to damages, and weigh

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

Despite the Manufacturers protests at the September 5, 2008 hearing (the Hearing), the

Courts consolidation proposal would facilitate efficient resolution of infringement and validity,

with minimal risk of confusion or prejudice. These issues turn on a common set of facts. As the

Manufacturers have themselves noted, virtually all the accused products incorporate shared

features from JEDEC standardsfeatures that Rambus maintains are infringing. The

Manufacturers claims of prejudice, which would carry no force even if a fully consolidated trial

were in the offing, have even less merit in view of the Courts streamlined trial proposal. The

only modification Rambus proposes is to try damages together with infringement and validity,and before any willfulness trials. This further consolidation would add little complexity to the

issues slated for trial, since the jury would already have learned the technologies, the products,

and the players. The marginal expansion of trial issues is more than justified by the efficiency

and fairness benefits. These include avoiding the time and expense of seating and educating a

second jury, and forcing Rambus to present some of the same liability evidence to that jury.

Rambus also submits that the trial should proceed in January, as contemplated by the

Courts Tentative Order. Although counsel for Samsung urged the Court at the Hearing to stay

this case pending resolution of the PTOs inter partes reexaminations, there is little to be gained

from such a stay and every reason to proceed to trial. The federal court litigation is likely to

conclude long before the PTO issues a Certificate of Reexamination. Samsung filed its initial

(and defective) inter partes challenge more than 18 months into this litigation. The PTOs track


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record shows that the reexaminations are likely to take years, with appellate review increasing the

delay. There is no hard evidence to support Samsungs suggestion that the process will now be

quicker with the advent of the Central Reexamination Unit (CRU), which has been in place for

but a short time. Nor is there any merit to Samsungs suggestion at the Hearing that the PTO

could negate even a final judgment of validity by this Court; that argument and In re Swanson ,

F.3d , 2008 WL 4068691 (Fed. Cir. Sept. 4, 2008), apply to ex parte reexaminations, not to the

inter parte reexaminations at issue here. By statute, any final judgment of validity would

preclude the PTO from proceeding with Samsungs pending inter partes challenges.

II. RAMBUS CONCURS IN THE COURTS TENTATIVE DECISION TO HOLD ACONSOLIDATED TRIAL ON INFRINGEMENT AND VALIDITY, BUTSUBMITS THAT THE TRIAL SHOULD INCLUDE DAMAGES

A. Common Issues of Fact Overwhelmingly Favor A Consolidated Trial onInfringement and Validity for all DDR2+ products

Holding a consolidated trial on the infringement and validity issues raised by Rambuss

claims against the Manufacturers DDR2+ products is reasonable and fair. A consolidated trial

on infringement and validity covering these products would promote efficiency, and reflects the

substantial overlap among Rambuss claims and the Manufacturers anticipated defenses.

1. The Consolidated Trial Promotes Judicial Economy

Although Rambus believes the DDR and SDRAM claims against Samsung and Nanyacould reasonably have been folded into a joint trial (Rambus Consol. Oppn to Mfrs. Mot.

(Oppn) 5 -7), the decision to sever out those claims for a separate trial has the advantage of

focusing the January trial on a set of accused products that cut broadly across the Manufacturers.

DDR2 and DDR3 are both marketed by all of the Manufacturers. Rambus Final Infringement

Contentions 5-6. This means that as to two of the five accused products in the consolidated trial,

the overlap would be complete. There would also be overlap as to two of the three remaining

products, with GDDR3 built by three of the Manufacturers and GDDR4 by two of them. Id.

The consolidated trial proposed by the Court would harness the efficiencies noted by

Rambus in its Opposition, while avoiding many of the concerns (however valid) expressed by the

Manufacturers about a joint trial with older SDRAM products. See Micron Mot. 11. As we

have explained, it only makes sense to adjudicate Rambuss claims against the Manufacturers


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SDRAM products together. Oppn 5-7. The claims involve the same memory technologies. Id.

Rambus has asserted them against a set of memory features that, with narrow exception, were

embodied in JEDEC-standards and used by the Manufacturers in products following those

standards. Id. Consistent with these shared features, the Manufacturers have indicated an intent

to raise virtually identical invalidity defenses to Rambuss claims, including anticipation,

obviousness, and inadequate written description. Id. at 8. By severing out the SDRAM and DDR

claims, the Court would further simplify the infringement and validity issues for trial. Nanya

argued, for example, that a consolidated trial that included DDR and SDRAM claims against two

Manufacturers would exacerbate the risk of jury confusion by leaving jurors wondering why this

is the case. Nanya Mot. 10, 12. Even assuming this concern was legitimate, the proposed

consolidation puts it to rest.

Where, as here, a patentholder asserts claims against the features used in standardized

products, the most rational approach to adjudication is to present the issues to a single jury in a

joint trial. See Golden Trade S.R.L. v. Lee Apparel Co. , 1997 WL 373715 (S.D.N.Y. June 25,

1997). Empanelling different juries to consider what amounts to the same claims, defenses, and

evidence would risk inconsistent results and waste the resources of both the court and the parties.

2. The Prejudice Concerns Invoked by the Manufacturers Do NotOutweigh the Efficiencies of a Consolidated DDR2+ Trial

In their replies and at the Hearing, the Manufacturers did not seriously contest the

common factual issues pervading Rambuss claims and the invalidity defenses. Nor could they,

for their own expert on noninfringement and validity consistently treated the accused products in

an undifferentiated fashion, stressing that they shared a common set of features. See Oppn 9-

10 (collecting citations). The Manufacturers arguments focused instead on the purported

prejudice that would flow from a consolidated trial. The sources of prejudice they identify are

unavailing, however, and cannot override the efficiencies to be gained from consolidation. This

is doubly so in light of the streamlined DDR2+ trial proposed by the Court.

First, the severance of willfulness into individual trials directly addresses the concerns

expressed by the Manufacturers about the Hynix I verdict. In their papers, Micron and Samsung


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highlighted the prejudice that they believed would result from the introduction of the verdict in a

joint trial. See Micron Mot. 9; Micron Reply 3-4; Samsung Mot. 6; Samsung Reply 2-3. If the

Court proceeds with its plan to hold separate jury trials on willfulness for each Manufacturer, the

admission of the Hynix I verdict presents no risk of spillover; the Court will separately decide, as

to Micron, Nanya, and Samsung, whether to admit the verdict and, if so, for what purpose.

Second, the introduction of past Samsung and Hynix licenses will not cause Micron and

Nanya undue prejudice, as they suggest. E.g. , Micron Reply 5. Evidence of past licenses are

admissible, for example, as secondary considerations to show non-obviousness. Oppn 19-20.

The Federal Circuit has held that public and commercial response to an invention is a factor to

be considered in determining obviousness, and is entitled to fair weight. Arkie Lures, Inc. v.

Gene Larew Tackle, Inc ., 119 F.3d 953, 957 (Fed. Cir. 1997). Like other secondary

considerations, licensing activity, including third-party licenses, may demonstrate how the

patented device is viewed by ... persons concerned with the product in the objective arena of the

marketplace. Id . The Manufacturers have offered no basis to dispute the nexus between the

Samsung and Hynix licenses and the merits of Rambuss patented inventions, making this

licensing evidence highly probative of obviousness. Oppn 19-20. Because past licensing

activity would be admissible against Micron and Nanya even in individual trials, and because the jurys consideration of that evidence could be effectively guided with jury instructions, being in

a trial with two defendants who have agreed to ... royalty bearing licenses (9/5/08 RT 23)

constitutes no prejudice at all.

Nanya contends in its reply that the licenses are inadmissible to show obviousness and

validity, reasoning that [w]hat Hynix and Samsung believed in 1995 and 2000 is irrelevant to

what a person of ordinary skill would have understood in 1990. Nanya Reply 8-9. But Nanya

cites no supporting authority for this contention, and it cannot be squared with settled Federal

Circuit authority establishing that licensing is a proper secondary consideration. See, e.g. ,

Stratoflex, Inc. v. Aeroquip Corp. , 713 F.2d 1530, 1539 (Fed. Cir. 1983). It is hardly uncommon

for companies to license patented inventions following the issuance of a patent. Under Nanyas

approach, however, that evidence would be categorically excluded from the analysis.


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In its reply (Micron Reply 5) and at the Hearing (9/5/08 RT 24), Micron insisted it would

be damaged in the eyes of the jury by being associated with Manufacturers who entered into

licensing agreements with Rambus. But far from prejudicing Micron, the presence of the past

licensees at a joint trial would give Micron the benefit of an explanation as to why the licenses

cannot, in their view, be taken as persuasive evidence of validity. Notwithstanding their past

licenses, Hynix and Samsung have both challenged the validity of Rambuss patents on a variety

of grounds. See, e.g. , Mfrs. Supp. Joint Prelim. Invalidity Contentions. Given that the licenses

would come in against Micron even in an individual trial, having Samsung and Hynix available to

address them would arguably be more advantageous to Micron than having to account for the

licenses itself. In any event, defendants in a multi-defendant case often have different

permutations of a common defense, and that circumstance alone poses no obstacle to a joint trial.

See Golden Trade , 1997 WL 373715, at *2 (noting that conflicts are potentially present

whenever there are multiple defendants, and do not ordinarily constitute the kind of prejudice

that impacts the fairness of the trial).

Third, the Manufacturers contend they will be unduly prejudiced in a joint trial by the

introduction of infringement evidence specific to Hynix: the Farhad Tabrizi emails

acknowledging that all DDR memories are infringing (Exh. 6523) and vowing to fightRambus (Exh. 6634), and a Hyundai/Hynix design proposal looking to Rambus for DLL and

dual-edge clocking solutions (Ex. 5020). See Micron Reply 7-8; Nanya Reply 7. Micron pressed

this point at the Hearing, arguing that the evidence clearly doesnt come in in a Micron-only

trial. 9/5/08 RT 27. But the Courts trial proposal itself may dispatch the prejudice argument

regarding the fight Rambus email. Rambus seeks to introduce that evidence primarily to

establish willfulness (Oppn 23), 1 and that issue would be tried against each manufacturer

separately under the Courts tentative trial plan. Micron, Samsung, and Nanya will each have an

opportunity to seek exclusion of that evidence, then, in their respective willfulness trials.

1 Of course, Rambus reserves the right to seek introduction of the fight Rambus email in theconsolidated trial if the Manufacturers interpose a defense that makes it relevant. In that event,the Court can decide its admissibility and, if necessary, limit its scope.


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The other evidentiary challenges need not be resolved in order to devise a trial structure

for the 334 case, but can be addressed in in limine motions closer to the time of trial. But even if

the admissibility vel non of the Tabrizi infringement email and Hynix design proposal bore

critically on consolidation, neither would pose a risk of unfair prejudice. This evidence would be

admissible against each of the Manufacturers in separate trials on infringement and validity. Mr.

Tabrizis acknowledgement that DDR infringes goes directly to whether the features embodied in

the accused products infringe Rambuss patents. Mr. Tabrizi is a senior industry figure with a

sophisticated understanding of the relevant memory technologies. And as the Manufacturers

expert himself concedes, DDR2 and DDR3 incorporate (and supplement) DDR features that

Rambusand Mr. Tabrizibelieve to be infringing. McAlexander Decl. in Supp. of the Mfrs.

Farmwald and Ware Mots. for Summ. J. 28-29 (Docket No. 514, Case No. 05-00334).

The Hynix design proposal referencing Rambuss inventions is admissible for multiple

purposes. The evidence at trial will demonstrate that nearly all of the accused products

incorporate the two referenced features: dual-edge clocking and DLL. The fact that Hynix

believed these features to be Rambus inventions goes directly to whether the relevant claims in

suit are valid and infringed. The design is also admissible as a secondary consideration

demonstrating non-obviousness, because it reflects copying on the part of Hynix. See Exh. 5020.Copying is a well-accepted secondary consideration, and may carry significant weight when

married with compelling objective indicia of other secondary consideration. Ecolochem, Inc. v.

Southern Cal. Edison Co. , 227 F.3d 1361, 1380 (Fed. Cir. 2000). Evidence that Hynix sought to

copy specific memory design features invented by Rambus is highly probative of whether those

features were obvious. See, e.g. , Power-One, Inc. v. Artesyn Techs., Inc. , 556 F. Supp. 2d 591,

602 (E.D. Tex. 2008) (noting that the patentholder presented substantial evidence indicating [the

defendant] was aware of the concepts of [the patentholders] invention). Rambus expects to

undergird its copying evidence with other secondary considerations, including the Samsung and

Hynix licenses and the commercial success of its inventions. Cf. id. (noting that the patentholder

introduced evidence of praise in the industry for its products, in addition to copying evidence).


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B. Trying Infringement and Damages Together Before the Same Jury WouldFurther Judicial Economy and Efficiency

Rambus respectfully requests that the Court reconsider its inclination to try damages

individually before a new jury that did not participate in the liability phase of the trial. [I]t is

generally much more efficient to work towards one trial and one appeal. Johns Hopkins Univ. v.

Cellpro , 160 F.R.D. 30, 35 (D. Del. 1995). Here, both judicial economy and fairness to Rambus

weigh heavily in favor of folding damages into the January trial on infringement and validity.

Given the factual overlap between infringement and validity, on the one hand, and the reasonable

royalty analysis, on the other, it would be highly inefficient to empanel a new jury on damages

and force Rambus to present liability evidence a second time. In contrast, trying damages

together with infringement-related issues would not unfairly prejudice the Manufacturers,

particularly if the trial is limited to the accused DDR2+ products.

1. The Same Efficiency Considerations Favor Trying Damages andLiability in a Single Consolidated Proceeding

The Court has proposed that a separate jury decide damages as to each Manufacturer on

an individual basis. Tentative Order. But because the accused products are overwhelmingly

based upon industry-standard designs, this case is well suited to a consolidated trial embracing

damages. All but one of the accused products at issue here (RLDRAM II) follow JEDEC-standard designs and incorporate feature sets that infringe Rambus patents. These commonalities

make it sensible and efficient to resolve reasonable royalty issues as well as infringement and

validity in a single trial before the same jury.

As Rambus has explained (Oppn 14), the evidence at trial will likely establish two

hypothetical negotiations dates. As to Samsung, the date would be 2005, when its license

terminated. Id. As to the other Manufacturers, it would be January 2001, when the first of the

Rambus patents in suit issued. Id. Although the accused products in this case (DDR2+) were not

introduced until later, the Manufacturers use of several features incorporated into those

productsand thus the infringementextends back to earlier JEDEC-standard designs. At the

time the 184 patent issued in 2001, each of the Manufacturers built and distributed a JEDEC-

standard design (DDR) that infringed Rambuss patent. This reasonable royalty analysis, if


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adopted, would permit the jury to focus on two fixed points in time in assessing the damages

evidence against the four Manufacturershardly the disarray and extreme confusion forecast

by the Manufacturers. See Nanya Mot. 10.

Nor would the resulting royalty rate be affected by subsequent events or the licensing

agreements informed by those events. Because the hypothetical negotiation assumes that the

patent at issue is valid and infringed, see Northlake Mktg. & Supply, Inc. v. Glaverbel, S.A. , 72 F.

Supp. 2d 893, 902 (N.D. Ill. 1999), any effort by the Manufacturers to rely upon subsequent

licenses (such as the 2005 Samsung renegotiation or the Infineon settlement agreement) would be

unavailing. Each of the licenses was negotiated against the backdrop of uncertainty over the

validity and enforceability of Rambuss patents, circumstances that are wholly at odds with the

assumptions grounding reasonable royalty determinations. See Expert Report of David J. Teece,

served Sept. 5, 2008, 14-28.

The Manufacturers contend in their papers that a consolidated trial on damages would risk

confusing the jury. Nanya Reply 11; Samsung Reply 4. But even assuming that the Court would

need to determine a separate hypothetical negotiation date for each of the accused products, as

Samsung seems to suggest (Reply 4), the standardized nature of the accused products would

permit the jury to use common dates for the Manufacturers. Because each generation of accusedDRAM devices (save RLDRAM II) follows a JEDEC standard, the evidence will show that the

Manufacturers introduced these products at roughly the same or immaterially different times. 2

A consolidated trial would also further efficiency because evidence relevant to

infringement and validity is also relevant to damages. The license granted by Rambus to

Samsung bears not only on obviousness ( see discussion supra at 4-5), but also on the reasonable

royalty for the infringed products. In addition, Rambus expects to introduce evidence of the

Manufacturers product sales to show both validity and damages. The commercial success of the

Manufacturers products is a secondary consideration relevant to whether the Rambus inventions

2 Although Nanya suggests that the Court would have to use a new hypothetical negotiation datefor each patent issued (Nanya Reply 12), it cites no authority for this novel proposition and thereis none. Such a rule would render the reasonable royalty determination here inordinately complexwithout regard to whether damages were tried individually or in a consolidated proceeding.


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used in these products were obvious. See Brown & Williamson Tobacco Corp. v. Philip Morris ,

Inc. , 229 F.3d 1120, 1130 (Fed. Cir. 2000) (Our case law provides that the success of an

infringing product is considered to be evidence of the commercial success of the claimed

invention.); Syntex (U.S.A.) Inc. v. Paragon Optical Inc., 7 U.S.P.Q. 2d 1001, 1005 (D. Ariz.

1987) (similar). These sales data are also evidence going to the jurys determination of damages

and, in particular, a reasonable royalty. See, e.g. , TWM Mfg. Co. v. Dura Corp., 789 F.2d 895,

899 (Fed. Cir. 1986) (upholding special masters computation of reasonable royalty based upon

comparison of infringers usual or accepted profit with its anticipated profit from sale of

infringing device).

2. Even if the Court Tries Liability Separately From Damages, the Same

Jury Should be Empanelled for Both PhasesUsing separate juries for liability and damages would cause greater delay and might

complicate the proceedings by creating a piecemeal quality to the trial, making it harder for the

trier of fact to see the case as a whole. Belmont Textile Mach. Co. v. Superba , 48 F. Supp. 2d

521, 526 (W.D.N.C. 1999). Thus, the better and preferred practice is to use the same jury for all

of the issues in an action, even though it may hear those issues at different times. 9A Wright &

Miller, Federal Practice & Procedure: Civil 3d 2391 at 175 (3d ed. 2008); see also ODonnell

v. Watson Bros. Transp. Co ., 183 F. Supp. 577, 580 (D.C. Ill. 1960).

This case involves sophisticated technologies and will impose a steep learning curve on

any finder of fact. While the conduct trial demonstrated that a lay jury is fully capable of

understanding and rendering impartial judgment on the relevant issues ( see Oppn 24-25),

empanelling a new jury would introduce unnecessary complications. Even if a new jury were

told to assume validity and infringement, it would still need to understand DRAM design, how

DRAM functions, and the market for these devices in order to weigh the reasonable royalty

evidence. As the Hynix I trial well illustrates, that evidence is likely to consist of, among other

things, licensing agreements and testimony about the value of DRAM features. (Patent Tr. 1027-

77 (Teece).) The process of selecting new jurors and educating them about the basic facts of the

case would lead to needless delays and expenditures.


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By holding a damages trial before the same jury that adjudicated infringement and

validity, the Court would avoid this duplication of effort, process, and expense. When it is time

to try damages, the liability jury would already be familiar with the relevant inventions, products,

and witnesses. Having already seen the same witnesses during the liability phase would also

provide jurors with a broader base of knowledge with which to assess credibility. Thus, even if

the Court decides to separate liability and damages into different phases, judicial economy and

efficiency would be best served by retaining the same jury throughout the trial.

3. Once the Jury Determines Damages, the Court Can Proceed toBifurcated Willfulness Trials

Integrating damages into the consolidated January trial would cohere well with other

aspects of the Courts proposed trial schedule. Although Rambus believes willfulness couldproperly be included in the consolidated trial, it does not oppose the Courts bifurcation proposal.

Thus, if the jury finds the patents valid and infringed and returns a damages award, the Court can,

at that point, proceed to bifurcated willfulness trials against the individual Manufacturers. See

Tentative Order. Because the same jury would be seated for this aspect of the case, the Court

would take advantage of the knowledge gained during the first trial while addressing the

Manufacturers prejudice concerns regarding evidence of willful infringement.

III. GRANTING A STAY PENDING PTO REEXAMINATION WOULDIRREPARABLY HARM RAMBUS AND UNDERMINE JUDICIAL ECONOMY

In determining the propriety of a stay pending reexamination, courts have traditionally

considered (1) whether discovery is complete and whether a trial date has been set; (2) whether a

stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly

prejudice or present a clear tactical disadvantage to the nonmoving party. Telemac Corp. v.

Teledigital, Inc ., 450 F. Supp. 2d 1107, 1111 (N.D. Cal. 2006). Far from supporting a stay, each

of these factors favors prompt and expeditious resolution of this case through trial.

A stay would irreparably prejudice Rambus by depriving it of the right to enforce its

patents while they are in effect. As the Manufacturers are well aware, the Farmwald/Horowitz

patents in suit will expire in April 2010. Contested inter partes reexaminations proceedings in

the PTO are notoriously slow. By most accounts, such proceedings typically take more than three


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and a half years to complete before any administrative appeal or judicial review. See discussion

infra at 14-16. Staying this case in deference to such a protracted process would all but ensure

that the Rambus patents will expire before any competent tribunalthis Court or the PTOis

able to adjudicate fully Rambuss patent claims. The result would be to deny Rambus any

possible injunctive relief and to postpone indefinitely any damages award. These harms alone

furnish sufficient grounds to deny the requested stay.

Proceeding to trial, in contrast, would promote efficiency without compromising

Samsungs ability to mount its validity challenge in both forums. The overlap between the

claims-in-suit and the claims subject to PTO review is limited to those challenged by Samsung in

inter partes reexaminations. 3 Congress contemplated that inter partes proceedings and litigation

could run concurrently, with the first final decision carrying preclusive effect in the parallel

proceedings. In this respect, despite what Samsung has suggested, inter partes reexaminations

differ from ex parte reexaminations, which may undercut even completed and final federal court

judgments of validity. Because this litigation has progressed significantly and is set for trial in

the next few months, it is likely to reach final judgmentand thus to settle the overlapping

validity issues pending in the PTOwell before the issuance of a final Certificate by the PTO.

At the same time, the progress and trajectory of this litigation poses no cognizable prejudice toSamsung, which can advance the same invalidity theories it has asserted in the reexamination.

Even apart from the comparative posture of the cases, which favors the federal litigation, a

stay would produce little in the way of efficiency or simplification. This case is broader than the

inter partes reexamination; it involves more parties, and there are more patents, more claims, and

more defenses at issue. Accordingly, any resolution by the PTO would not obviate the need to

proceed to trial in the 334 case.

A. The Preclusion Rules Governing Parallel Inter Partes and Ex Parte Reexaminations Are Different, and Favor the Federal Court Litigation Here

At the Hearing, counsel for Samsung argued that this Court should stay the 334 case in

3 Samsung has filed an ex parte reexamination with respect to the 195 patent, but no claims fromthat patent were selected for trial. Hynixs Req. for Judicial Not. of Papers From Reexaminationof Rambus Inc.s Patents (Hynix RJN) 2 (Docket No. 3710, Case No. 00-20905).


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deference to Samsungs pending reexaminations based upon the potential effect of a certificate

cancelling Rambuss claims. If this litigation were to result in a finding of validity, counsel

maintained, that did not prevent the patent office from finding a ... substantial new question of

patentability. 9/5/08 RT 37-38. Counsel then cited the Federal Circuits recent decision in In re

Swanson , which he construed to permit the PTO to invalidate a patent on reexamination even if

found valid in district court, affirmed in [the] Federal Circuit. Id.

That argument is wrong as a matter of law, and the cited authority, inapposite. The

relevant reexaminations here are inter partes challenges, and Congress has specifically provided

for parity of preclusion; if the federal courts arrive at a final validity determination first, that

ruling bars the PTO from proceeding with any related inter partes reexamination. The threat of

wasted federal court litigation looms larger in the ex parte context, where the PTO is free to

second-guess a final adjudication of validity. This means the risk that Samsungs reexamination

challenge will interfere with the federal litigation in this case turns largely on timing and overlap,

two factors that weigh decidedly against a stay.

Ex Parte Reexaminations : In a situation involving concurrent federal court and ex parte

reexaminations, even a final judgment of validity in patent litigation does not foreclose the PTO

from reaching the opposite conclusion in an ex parte proceeding. See Ethicon, Inc. v. Quigg , 849F.2d 1422, 1429 n.3 (Fed. Cir. 1988) (explaining that a finding that patentholder failed to prove

nonvalidity is not binding on the PTO). The Federal Circuit has explained that the standards

governing the two proceedings are different; patent defendants must offer clear and convincing

evidence of invalidity, whereas the requesting party need only meet a preponderance standard in a

reexamination. See id. There is, moreover, no presumption of validity. See id. Because the two

forums have different standards of proof for determining invalidity, the PTO lacks authority

even to stay its proceeding pending the outcome of patent litigation. Id. at 1429. Accordingly,

when the federal court litigation is at a relatively early stage or other factors favor a stay, the one-

way preclusion rule applicable to ex parte reexaminations may move a court to defer to the PTO.

See Spa Syspatronic, AG v. Verifone, Inc. , 2008 WL 1886020 at *4 (E.D. Tex. Apr. 25, 2008)

(noting the risk of proceeding with the case only to have the PTO later cancel the patent in ex


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parte reexamination, particularly given the complete overlap of patents and claims between the

two proceedings and that discovery was still in infancy).

Inter Partes Reexaminations : The statutory scheme Congress devised for inter partes

reexamination, which was added in 1999, is quite different. This scheme permits a party

challenging the validity of a patent to pursue PTO reexamination or civil litigation in federal

court, but provides that a final determination in either proceeding carries preclusive effect in the

other forum. See 35 U.S.C. 315, 317. Thus, if a request for inter partes reexamination is

granted, the requesting party is estopped from asserting at a later time, in any civil action ... the

invalidity of any claim finally determined to be valid and patentable on any ground which the

third party requester raised or could have raised during the inter partes reexamination

proceedings. 35 U.S.C. 315(c). Conversely, once a civil action results in a judgment that a

party failed to prove the invalidity of a patent claim, neither that party nor its privies may

thereafter request reexamination of any such patent claim that the party or its privies raised or

could have raised in any such civil action ... and an inter partes reexamination requested by that

party or its privies on the basis of such issues may not thereafter be maintained. 35 U.S.C.

317(b). The statutes reciprocal estoppel provisions make clear that parties challenging patent

validity determinations are free to pursue inter partes review from the PTO and litigationsimultaneously; however, the completion of either process will estop any parallel proceedings.

Sony Computer Entmt Am., Inc. v. Dudas , 2006 WL 1472462 at *6 (E.D. Va. May 22, 2006).

That Congress contemplated parity between validity determinations by federal courts and inter

partes reexaminations is reflected in its express authorization of PTO stays for good cause. 35

U.S.C. 314. Thus, whereas the PTO is obliged in the ex parte context to go forward with

reexaminations, and thus poses an inherent threat of undercutting federal court findings, the

agency may stay its hand in an inter partes proceeding. See 37 C.F.R. 1.987.

In the inter partes context, then, preclusion rules are generally a neutral factor, and the

propriety of a stay turns more heavily on timing and overlap ( i.e. , simplification of issues). If a

stay pending inter partes reexamination is sought early in the federal court litigation, and if the

reexamination could potentially dispose of the issues presented there, a stay may be appropriate.


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See Cima Labs, Inc. v. Actavis Group HG , 2007 WL 1672229 (D.N.J. June 7, 2007) (noting that

discovery is in its beginning stage ... with a trial date far from being set). But if the patent

litigation is far along, as it is here, and if the pending reexamination covers only a portion of the

claims and defenses in suit, as it does here, the stay calculus will often weigh against a stay. See

Bacus Lab., Inc. v. Aperio Tech., Inc ., 2005 WL 475158 (N.D. Ill. Mar. 1, 2005) (denying stay

where case was already over two years old and reexam would not impact all claims). After all,

the expeditious conclusion of the patent litigation could terminate the reexamination proceedings.

On this score, Samsungs reliance on the decision in In re Swanson is misplaced. In re

Swanson did not involve an inter partes reexamination; it involved an ex parte reexamination.

That is why the Court found no difficulty in holding that the PTO could properly cancel claims

even after the Federal Circuit affirmed a trial curt finding of validity. 2008 WL 4068691, at *7.

For similar reasons, Samsung is simply wrong in suggesting that Congress preferred PTO validity

determinations in inter partes challenges to federal court determinations. 9/5/07 RT 37 (At

some point, and I would submit that point is here, it is not the right thing for an Article III court to

do that.). Congress specifically decided that a final judgment of validity by a federal court

would be binding on the PTO, and that the PTO could therefore stay its proceedings in deference

to a federal court. In this situation, a party can choose to run horses in both races, but theconclusion of one race automatically ends the other. Dudas , 2006 WL 1472462, at *6.

B. Rambus Stands to Suffer Irreparable Prejudice If a Stay Is Granted

1. A Stay Pending PTO Reexamination Would Cause Protracted Delay

Inter partes reexaminations are an iterative process, with a tiered review structure, many

opportunities for party input, and wide agency discretion to revisit and redo completed stages. As

a result, the proceedings are marked by long delays, with most cases taking years to complete.

The inter partes process is fluid and flexible. Once a reexamination request is granted

and they almost always are ( see infra at 23)the PTO examiner will issue an initial Office

Action allowing or rejecting the claims. See 37 C.F.R. 1.935; MPEP 2606. The patent owner

may respond by filing comments, modifying claims, or adding new claims, and the requester may

file reply comments. See 35 U.S.C. 314. After the PTO considers the submissions and issues


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its Action Closing Prosecution, the parties may again file written comments and arguments. See

37 C.F.R. 1.951; MPEP 2671.02. If the examiner elects to modify the ruling, he or she

should ordinarily reopen the prosecution. MPEP 2673.01 (emphasis added).

This process has proven to be enormously time consuming. Separate studies, using PTO

data, have determined that contested reexamination proceedings take an average of over three and

half years to complete, before administrative appeal and judicial review. See Hamilton Decl.

Exh. A (Institute for Progress, Reexamining Inter Partes Rexam at 12 (2008) (IFP Report)

(finding average pendency of 43.5 months); 4 see also Exh. B (Andrew S. Baluch & Stephen B.

Maebius, The Surprising Efficacy of Inter Partes Reexaminations at 11 (2008) (Foley Report)

(finding average pendency of 42.5 months); Exh. C (Stuart Weinberg, Worried About That

Infringement Case? Ask For A Reexam , Dow Jones Newswires, at 1, May 30, 2008 (Weinberg)

(noting 43.5 months average pendency)). Although the PTO has claimed an average pendency of

32.7 months for inter partes proceedings, 5 those statistics reflect all such reexaminations,

whether contested or uncontested. If uncontested reexaminations are stripped out, the average

pendency is roughly 40 months. IFP Report at 12; Foley Report at 11.

The likely delay is still longer after factoring in administrative appeals and court review.

The losing party in an inter partes reexamination may appeal to the Board of Patent Appeals andInterferences (BPAI), 37 C.F.R. 1.953, and from there to the Federal Circuit, 35 U.S.C. 141.

Only after the time for appeal has expired or the appeal and any remand proceedings have

concluded can the PTO issue a Reexamination Certificate. 35 U.S.C. 316. [O]nly three inter

partes reexaminations have received a BPAI decision since 1999, and each took 4 or 5 years to

reach that point. Network Appliance Inc. v. Sun Microsystems, Inc ., 2008 WL 2168917 at *5

(N.D. Cal. May 23, 2008); see also IFP Report at 13 (finding average of 58.3 months, or 4.8

4 The Institute For Progress is a think tank founded by Kevin Rivette, chairman of the PTOsPublic 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(considering statistical analyses of PTO data despite hearsay and other evidentiary objections).5 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)(Sterne Report)).


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years, for reexamination to result in a BPAI decision). Remarkably, just one of these three

reexaminations has been completed, due to further administrative proceedings after BPAI review.

See Hamilton Decl. Exh. E (transactional histories and related BPAI decisions for Reexamination

Nos. 95/000,006, 95/000,009, and 95/000,030). Reality and past experience dictate that several

years might very well pass from the time when a final office action is issued by the PTO to when

the claims are finally and officially confirmed after appeals. NTP, Inc. v. Research In Motion,

Ltd ., 397 F. Supp. 2d 785, 788 (E.D. Va. 2005); see also In re American Acad. of Sci. Tech. Ctr .,

367 F.3d 1359, 1362 (Fed. Cir. 2004) (affirming the BPAI ten years after commencement of

reexamination proceedings). Indeed, not one inter partes matter has made its way through

Federal Circuit review in the 9 years since the procedure was adopted.

Far from refuting these data, the article that Samsung counsel cited at the Hearing notes

that the average pendency of a reexamination through the CRU, the BPAI, and the Federal

Circuit is 48 to 72 months. Sterne Report at 60. Thus, even in the quickest possible timeframe

contemplated by Samsungs own source, the reexamination proceedings would not be completed

until January 2012, four years after Samsung filed the last of the requests at issue in January

2008. Such inevitable delays have made courts reluctant to stay patent litigation in deference to

inter partes reexamination. See, e.g ., Network Appliances , 2008 WL 2168917 at *5 (finding thatdelays associated with PTO proceedings weigh against granting stay); Genoa Color Tech., Ltd. v.

Samsung Electronics America, Inc ., 2008 WL 754681 (S.D.N.Y. Mar. 12, 2008) (denying stay

and noting that inter partes reexamination could take years to complete). 6 Taken together with

the prejudice to Rambus and the advanced stage of this litigation, the long delay that we can

expect from Samsungs inter partes challenges weighs strongly against a stay.

2. A Stay Would Seriously Prejudice Rambus by Effectively Imposing aCompulsory License and Denying Rambus Injunctive Relief

6 Even for ex parte reexaminations, which are not subject to parallel estoppel like inter partes proceedings, courts have frequently cited delay as a reason to deny stays pending reexamination.See, e.g. , Fresenius Med. Care Holdings v. Baxter Intl., Inc. , 2007 WL 1655625 at * 5 (N.D. Cal.June 7, 2007) (denying stay and noting the lengthy delay that would inevitably ensue if a staywere granted); Biax Corp. v. Fujitsu Computer Sys. Corp ., 2007 WL 614187 at *2 (E.D. Tex.Feb. 26, 2007) (denying stay and observing that the potential delay for an indefinite periodwould likely prejudice Biax); Lexington Lasercomb I.P.A.G. v. GMR Prods., Inc ., 442 F. Supp.2d 1277, 1278 (S.D. Fla. 2006) (similar).


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If the Court were to grant a stay, the patents-in-suit will almost certainly expire before

PTO proceedings and appeals are complete. The Horowitz/Farmwald patents are set to expire in

April 2010. Because of deficiencies in Samsungs initial reexamination requests, the earliest

request at issue was not effectively filed until mid-2007. Hamilton Decl. Exh. F (transactional

histories for Reexaminations Nos. 95/000,178, 95/001,026, 95/000,250, 95/000,166, 95/000,183).

Samsung thereafter filed follow-on requests through early 2008. ( Id. ) Given the three-to-four

year pendency period for most inter partes reexaminations, there is a substantial likelihood that

the patents will expire before the PTO issues a certificate on Samsungs challenge. Indeed, that

risk obtains even under the PTOs skewed pendency average of 32.7 months. When BPAI and

Federal Circuit review are considered, there would be little chance of a final determination during

the life of the patents.

The effect would be to deprive Rambus of its right to seek injunctive relief, and to limit its

remedies for infringement to a compulsory license. See Lans v. Digital Equip. Corp ., 252 F.3d

1320, 1328 (Fed. Cir. 2001) (The district court cannot enjoin the Computer Companies from

infringing an expired patent.). The prejudice is manifest. The essential attribute of a patent is

the right to exclude others from using his property. eBay, Inc. v. MercExchange, L.L.C ., 547

U.S. 388, 392 (2006). It would be unfair to deny Rambus even the possibility of enjoininginfringing conduct, particularly since trial is just a few months away. See Soverain Software LLC

v. Amazon.com, Inc ., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005) (Postponing trial pending

reexamination ... only six months prior to trial would unduly prejudice Soverains ability to

protect its property rights in the patents at issue.).

For the reasons Rambus has set out in the Hynix I case, a reasonable royalty would be

inadequate to redress the ongoing harm to its business resulting from the Manufacturers

infringement. See Mem. of P. & A. in Supp. of Rambus Req. for Damages & Equitable Relief

10-19 (Docket No. 3818, Case No. 00-20905). 7 The proliferation of infringing products

7 Microns suggestion that Rambus has somehow disavowed injunctive relief (Reply 13), ismeritless, see Rambuss Reply In Supp. Of Req. For Addl Damages and Equitable Relief (Docket No. 3735, Case No. 00-20905).


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marketed by the Manufacturers has severely limited Rambuss market share and strategic options,

and will continue to do so while the Manufacturers are allowed to infringe. This ongoing

infringement has forced Rambus to focus on certain specific segments of the DRAM market, and

undercut even those opportunities. Only an injunction would allow Rambus to pursue its

business model effectively, and in particular, to promote its leadership products. See id.

At the Hearing, counsel for Samsung maintained that Rambuss concerns about delay

were misplaced because the PTO has adopted a central reexamination unit, which promises to

handle reexaminations more expeditiously and cut the time to decision. 9/5/08 RT 32-33. But

despite counsels insistence that the CRU creates a new world ( id. ), Samsung has offered no

support for reduced pendency time or accelerated reexamination speeds. In fact, as the same

counsel recognized in a filing made in a different case just a few months ago, with a grossly

backlogged PTO operating with limited resources, the unfortunate truth is that reexamination

proceedings can literally take years, assuming they are ever completed at all. Hamilton Decl.

Exh. G (Netapp, Inc.s Oppn to Def. Sun Microsystems, Inc.s Mot. For Partial Stay at 7,

Network Appliance, Inc. v. Sun Microsystems, Inc ., No. C-07-06053 EDL (N.D. Cal. Apr. 29,

2008)). Since the CRU was created in 2005, the PTOs reexamination workload has increased

dramatically; between fiscal 2005 and fiscal 2007, the number of ex parte and inter partes reexaminations rose 32%, from 583 to 769. See Hamilton Decl. Exh. H (USPTO, Performance

and Accountability Report: Fiscal Year 2007 at 121 (2007)). It would be surprising if the PTO

has been able to reduce meaningfully the pendency time for reexamination despite these increased

demands. And any examples of cases that have been handled by this unit with celerity would be

too few to offer a reliable prediction of how long it will take Samsungs inter partes challenge to

conclude.

Even if we assume that the PTO is able to cut the normal reexamination time in half for

the patents-in-suitand there is no reason to think that is likelya stay would still for all

practical purposes deprive Rambus of its right to seek meaningful injunctive relief. For example,

Samsung did not file the relevant reexamination request for the 8,020 patent until January 31,

2008. See Hynix RJN at 8 n.1. Even if it takes just two years rather than the four or five years


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typical of an inter partes reexamination to complete BPAI review, Rambus would not be able to

make its case to the jury until 2010, when its patents will expire. And that is assuming both that

the BPAI does not remand to the examiner for further proceedings, and that the parties do not

appeal the final PTO decision to the Federal Circuit.

All pending reexaminations are in the early stage of the inter partes process. That the

PTO has issued initial Office Actions for a subset of patents under reexamination does not mean

that a final certificate is imminent. As Samsung well understands, the initial Office Action is

merely the first step of a long process, and the average pendency is still a hefty 39.5 months even

after the initial office action. See IFP Report at 12. Notably, it is in Samsungs interest to try to

delay the PTO proceeding. Because Rambuss ability to obtain injunctive relief is tied to the

limited duration of the patents in suit, Samsung has the incentive to stretch out PTO proceedings

as much as it can to avoid a trial on the merits before the patents expire. There is no assurance

that the PTO proceedings would conclude in time to avoid prejudice to Rambus. 8

3. A Prompt Trial Would Promote Efficiency Without PrejudicingSamsung or Other Manufacturers

Rather than breaking up this litigation piecemeal, deferring to the PTO on a subset of

invalidity contentions while withholding decision on other issues beyond the scope of

reexamination, it would be far more efficient to resolve all relevant issues in the 334 litigation.

This Court has jurisdiction to weigh any invalidity contentions that the Manufacturers may wish

to interpose, including invalidity theories advanced by Samsung in the pending reexamination. In

8 It would also be unfair to force Rambus to defer all of its claims, even for patents that are notsubject 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 aresubject 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(Docket No. 2128, Case No. 05-00334) with Hynix RJN at 2; Cf . Network Appliances , 2008 WL2168917 at *5 (finding that stay would put non-moving party at a tactical disadvantage because itwould be forced to litigate only four of seven asserted patents while moving party could choosewhich claims to pursue). Rambus could also be prejudiced by the lapse of time duringreexamination, 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).Resolution of Rambuss willfulness claims, for example, would require witness testimonyregarding events that occurred years ago. A stay of several more years would only heighten therisk that the witness memory might fade and prejudice Rambuss ability to prove its case.


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these circumstances, staying the federal court action in favor of the later-filed PTO inter partes

challenge would truly be to have the tail wag the dog.

Considerations of judicial economy and efficiency favor prompt resolution of the parties

claims at trial. If Rambus prevails, the Manufacturers will be estopped from reasserting any

previously adjudicated invalidity arguments in reexamination. Conversely, if the Manufacturers

meet their burden of proving the patents invalid, the PTO proceedings will become moot. Trial is

less than four months away. Barring a stay, the parties can reasonably expect final judgment to

be rendered middle-to-late 2009. In contrast, the relevant PTO reexamination requests were not

granted until fall 2007 and spring 2008, more than two years after the 334 action commenced.

Any stay pending reexamination will likely last beyond 2010and that is assuming that the PTO

determination is not appealed to the Federal Circuit, as it likely will be. Since this case will most

likely be completed before the PTO reexaminations, it makes no sense to delay resolution of the

case in deference to the slower PTO proceeding. See Fresenius , 2007 WL 1655625 at *4.

A prompt trial here would also expedite appellate review. Whether Samsungs invalidity

claims are adjudicated in this Court or by the PTO, it is highly probable that the Federal Circuit

will have the final say on the matter. If the trial takes place as scheduled in January, the parties

will be in position to file appeals sometime in 2009. However, in the reexamination proceeding,an adverse ruling from the PTO examiner would have to be appealed administratively to the

BPAI before any Federal Circuit review. See 35 U.S.C. 141, 315. This means the

reexamination will likely not proceed to Federal Circuit review until 2012 at the earliest,

approximately four or five years after the relevant reexamination requests were filed. Letting this

litigation proceed is clearly the more efficient approach.

Neither Samsung nor the other Manufacturers stands to suffer any prejudice from prompt

resolution of Rambuss infringement claims at trial. Samsung claims it would be prejudiced if it

has to defend those claims without the benefit of the resolution provided by the reexamination

proceedings. Samsung Reply 10. But there is no reason why Samsung could not simply submit

its invalidity contentions to this Court and the jury for adjudication. Samsungs suggestion that

the issues are better presented to the PTO runs headlong into Congresss judgment that inter


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partes and federal court adjudication are in parity. See discussion supra at 13. For similar

reasons, it is irrelevant that the burden of proof and applicable standards are relaxed in inter

partes reexaminations; notwithstanding these differences, Congress expressly concluded that final

federal court validity judgments would bar inter partes proceedings. And in the unlikely event

that the PTO were to issue a certificate first, Samsung would be free to assert that ruling here.

C. A Stay Should Not be Imposed on the Eve of Trial, with Discovery Complete

Parties should not be permitted to abuse the process by applying for reexamination after

protracted, expensive discovery or trial preparation. Digital Magnetic Sys., Inc. v. Ansley , 213

U.S.P.Q. 290 (W.D. Okla. 1982). Thus, courts have adopted a clear rule ... that, where, as here,

discovery has commenced, claim construction has been briefed, and dispositive motions have

been filed and disposed of, courts should not grant stays for reexamination before the PTO.

Fresenius , 2007 WL 1655625 at *3.

The claims and defenses in this case are well on their way to adjudication. With a few

limited exceptions, fact discovery is now closed. Opening expert reports have been served.

Claim construction was completed long ago. A trial date has been set for January, less than four

months from now. It is far too late to stay these proceedings in favor of Samsungs belated

reexamination requests. See, e.g ., Alltech, 2007 WL 935516 (denying stay five months beforetrial); Soverain Software , 356 F. Supp. 2d 660 at 663 (denying stay six months before trial);

Output Tech. Corp. v. Dataproducts Corp ., 22 U.S.P.Q. 2d 1072 (W.D. Wash. 1991) (concluding

that a stay is not justified here where discovery is well underway and trial is eight months

away). A stay would likely cause undue prejudice to Plaintiff, who has expended resources in

reliance on the current discovery and trial dates. Alltech , 2007 WL 935516 at *2.

The relative delay in instituting inter partes review also weighs against disrupting this

case. Samsung did not file the first of its reexamination requests until August 2006 (916 patent),

when this action had already been pending for more than a year and half. For the 8,020 patent,

the initial reexamination request was not filed until January 2008, three years after this case was

filed. A stay is particularly inappropriate where the moving party delayed in seeking

reexamination. Fujitsu, Inc. v. Nanya Tech. Corp ., 2007 WL 3314623, at *2 (N.D. Cal. Nov. 6,


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2007) (denying stay partly because moving party waited until nine months after the filing of

patent litigation to request reexamination); Remington Arms Co. v. Modern Muzzleloading , Inc .,

1998 WL 1037920, at *3 (M.D.N.C. Dec. 17, 1998) (defendants unjustified delay in

requesting reexamination was the most compelling reason for denying the stay).

Samsungs reply simply ignores the clear rule that stays should not be granted on the

eve of trial. See Fresenius , 2007 WL 1655625, at *3. The cases cited by Samsung are

distinguishable because the parties were not ready for trial, or because the party opposing the stay

had itself initiated reexamination. See Samsung Reply 8-10. 9 Indeed, Samsung does not cite a

single case where a stay was granted even though the parties were ready for trial and the party

seeking the stay had initiated the parallel PTO proceeding. To allow Samsung to now use the

reexamination process to get this case stayed would be to allow a defendant to use the

reexamination as a mere dilatory tactic. Freeman v. Minnesota Min. & Mfg. Co ., 661 F. Supp.

886, 888 (D. Del. 1987).

D. A Stay Would Not Simplify Issues For Trial

1. A Trial Will Be Necessary Regardless of the Outcome of Reexamination Proceedings

Only five of the ten patents Rambus has selected for trial are subject to concurrent

reexamination proceedings. The reexaminations potential for simplifying this case is therefore

limited. Even if Samsung prevails on all of its invalidity contentions in reexamination, this matter

will still proceed to trial on the remaining patents. That counsels against granting the stay,

particularly since any potential for simplification must be balanced against the serious prejudice

to Rambus and the eleventh-hour timing of the stay request. See Gladish v. Tyco Toys, Inc ., 29

9

ASCII Corp . v. STD Entmt USA, Inc. , 844 F. Supp. 1378, 1381 (N.D. Cal. 1994) ([T]he partiesare 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 itdoes 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 completedin any of the pending actions involved in the multidistrict litigation. No case is on the verge of trial.); Lentek Intl, Inc. v. Sharper Image Corp ., 169 F. Supp. 2d 1360, 1362 (M.D. Fla. 2001)(without discussing the relevant stage of litigation, finding that the plaintiff was hardly in aposition to complain about the timing of reexamination because plaintiff itself initiated the PTOproceeding).


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U.S.P.Q. 2d 1718, 1720 (E.D. Cal. 1993) (denying stay partly because [a]fter the reexamination,

the parties would be right back in this court); Biax Corp ., 2007 WL 614187 at *2 (denying stay

where reexamination may only simplify the case to a limited degree and some claims and

issues will likely remain after the reexamination has been completed); Enprotech Corp. v.

Autotech Corp ., 15 U.S.P.Q. 2d 1319 (N.D. Ill. 1990) (denying stay where the reexamination

will not resolve everything); see also Network Appliances , 2008 WL 2168917 at *3.

Even for patents under reexamination, a PTO Certificate cancelling some of the

challenged claims would not obviate the need for trial here. The scope of PTO reexamination is

narrow; the only prior art references the PTO may consider are publications and patents, and the

PTO is not allowed to reexamine based on other grounds for invalidity, such as prior sales. See

35 U.S.C. 301, 311. The Manufacturers have reserved the right to argue invalidity based on

prior sales, best mode, and other grounds not subject to PTO reexamination. Unless Samsung

prevails on all of its invalidity contentions in reexamination, this Court will still have to

adjudicate issues of patent validity for patents the PTO has reexamined. See Gladish , 29 U.S.P.Q.

2d at 1720 (reexamination unlikely to simplify because [u]nless all claims of the patent were

cancelled as a result of the reexamination, validity would remain a contested issue in this action).

2. Speculation About the Ultimate Outcome of Reexamination Cannot bethe Basis for a Stay

Samsung

rambus brief on structure of jan 22 trial

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