rambus opposition sj based on failure to prove injuries 012709[1]

8/14/2019 Rambus Opposition SJ Based on Failure to Prove Injuries 012709[1]

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I. INTRODUCTIONAITDBACKGROI]NI)Rambuscontendshat Defendants ngagedn an unlawful conspiracy hat

preventedRDRAM from becoming he dominantmemorystandard.As aresult ofDefendants'unlawful acts, hroughwhich Defendantsntendedo "drive Rambusawaycompletely,"DDR SDRAM andDDR2 SDRAMbecame he dominantmemorystandardinsteadof RDRAM.

RambusexpertAvram Tucker hasprepared reasonable stimateofthe lostprofitssufferedby Rambusas a result of Defendants'successn thwarting RDRAM. Inparticular,Mr. Tucker calculatedhe netprofitsRambuswould have eaniedhad he salesof DDR andDDR2 from 2001 brougbApril 2010 nsteadbeenRDRAM sales. Mr.Tucker hen deducted rom this sum he actual oyaltiesand lat feepaymentselated oDDR or DDR2 sales hat Rambushas eceived rom current icensees, swell as anestimate f suchsums o be received n the future fromthosesame icensees.Theresultingdamagesigure is over$4billion.

Remarkably,Defendants ow seeksummaryudgmentbasedon the contention haRambus annotprovedamages!Defendants'conspiracy ucceede4Rambus asbeenmassively njured, and Defendantso otion shouldbe denied.Stripped o its essentials, efendants'arguments as ollows:

(l) "Whereallegedanticompetitive onductcauses oth a harm and a benefit,theplaintiffcamot recoverdamagesor the harm andstill keep he benefit. The two musbe offset so hat aplaintiff can ecoveronly its net injury;"t

(2) Defendants'schemeo thwart RDRAM both caused harm o Rambus adrastic eductionof its incomesteam from RDRAM sales)and oeated a'obenefif'(theopportunity or Rambus o assert ts intellectualproperty ights against heDDR andDDR2 sales hat would not haveoccuned f RDRAM was he dominaotmemory);

(3) Although Rambushas eportedand offset ts actualand orecastedoyaltiesI MovingMem. t8:ll-14.690535.3

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eamedon DDR and DDR2 from existing icensees,Rambus asnot -- and admittedlycannot quantiry he amount t will receive if anything)aspatent nfringementdamagein its suitsagainstDefendants nd otherunlicensedentitiesbasedon their salesofDDRandDDR2;

(4) theroyalty ratesRambus harged or licensingRDRAM were ower thantheroyalty rates t charged or licensing ts technolory for use n DDR andDDR2, andtherefore hepatentdamages ould be higher han he damagesalculated y Mr. Tucker;and

(5) Defendantsherebyhaveshown hat Rambus annotmeet ts burdenofproof at trial to show hat it hassuffereda net njury.

Put evenmore simply,Defendants ontendhat- having deprivedRambusofsomeM billion dollars over the ast eightyears hrough heir conspiracy o thwartRDRAM - they now can depriveRambusof all redress or that wrong becausehey alsohavespent he last decadenftinging Rambus'spatents,andRambus hereforemightsomeday rove hat and collectpatent nfringementdnmagesnotwithstandingDefendants'bestefforts to escape ll liability for thatmisconductas well).

Not surprisingly, he law doesnotpermit suchan nequitable esult.First, California aw squarely laceshe burdenuponDefendantso proveat trialthevalue of any benefits heir wrongful conductallegedlyconferredupon Rambus.Defendants avenot demonstrated,ndcannotdemonstrate,hat collectionofpatentdamages y Rambuss anythingmore hanspeculative s hispoint (even f it could besaid o be a "benefif'that Defendants' onspiracy confelredo' pon Rambus). Summaryjudgment herefore s improper.

Second, ven fRambus had he burden o prove he scopeofthe "benefits" (ifany)it received rom Defendants'conspiracy o thwart RDRAM' Defendants'own evidenceshowshat Rambushasmet that burden. Whetherornot it legally qualifiesas anoffsetting benefit" thatDefendantsconfered" by their conspiracy,Mr. Tuckerhasidentifiedand offset in his calculation he royalties and ump sumpaymentsRambushas590535.3 t-

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Therefore,f, as Ranrbus ontends,he Defendants ear he burdenat trial oIprovingthat their wrongflrl conductalso confened a benefituponRambus, henDefendants' nitial burden n this motion s to presentevidence uflicient to establish oththatsucha benefit exists,and hat t is sufficiently large o wholly offsetRambus'sclaimeddamages.By contrast,f" asDefendants ontend,Rambusbears he burdenofprovingthat it hasnot receiveda benefit rom Defendants'wrongful conductsufficient ooffset Rambus's laimed demages,he Defendants eedonly offer evidence howing hatRambus acks he evidence o meet his burdenof proof at trial. Given that Defendantsfail to satisff either burden, heir motion s properlydeniedbeforeevenconsideringadditionalevidence resented y Rambus.

California aw long has ecognized heprincipleuponwhich Defendants urport orely; namely, hat n[w]henthe defendant'sortious conducthascaused arm o theplaintiff or to hispropertyand n so doing hasconfeneda specialbenefit to the interestoftheplaintiffthat was harme{ the value of the benefit confened s consideredn mitigationof damages,o the extent hat his is equitable." Heckertv. MacDonald,208 Cal. App. 3d832,839 1989). "'The reasonbehindhe ule] s clear, f tautological: o the extentplaintiffs interestbenefits tom [tortiousconduct], t is not damaged.' Further, he'specialbenefit' doctrine reflects he basiccompensatoryheory underlying ort damagesby restricting ecovery o the harm actually ncurred." 1d. citationsomitted). Accord nre DeLaveaga's state,s0Cal.2d 480,488-89 1958) "'If thewongful actofthedefendant t onceconfersa benefit and nflicts an qjury, the loss actually causedwill bethenet result of the act to theplaintiff; and his netresultwill be the measure f damages. . . 'An allowance or suchbenefits s not in the natureofrecoupmentor set-off, but amethodof determining he actualdamages ustained"') citationsomitted).

California aw also onghas ecognizedhatadefendant eeking o invoke thisoobenefits"rule bears heburden f proof. See, .g.,Stills . Gratton,55Cal.App. 3d 698

B.

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708-09 1976) ('tnder ordinary ort principles . . the defendantsmayproveany offsetsfor benefitsconferred"). Indee4 this allocationofthe burdenofproofto the defendantsconfirrnedby the authoritiesupon which the Califomia SupremeCourt relied when t firstadoptedheoobenefits"rule n Hicksv.Drew.ll7 Cal.305 1897).See d. at3l4-15(citing as authority"Field on Damages, ec.744; Sutherland n Damages, ec. 1056');GeorgeW. Fiel{ A Treatise n The Law of Damages1876)$ 744, atp.599 ('Whenthewrongful actof adefendant roduces omebenefig aswell as njury, to theplaintitT hedefendantnay clain the bene/itsconferred n reductionor mitigation of darnages")(italics added); .G. Sutherland& JohnR. Berryman,A TreatiseonThe Law of Damages(2d ed. 1893)$ 1056, tpp. 230+06("If somencidental dvantage ccrueso theplaintiff from the act of the defendantwhich causeshe nuisance hat circumstancemay becowidered in mitigation. . . . To entitle the de.fendanto show any ncidentalbeneJit otheplaintiffit mtst accruedirectly from the act orbusinesswhich causes r constituteshenuisanceandconfers he benefit n the sarnemanneras t operateso producehe njury')(italics added).

This allocationof the bwden of proof also s consistentwith thegeneralCalifomiarule in both contractand ort actions hat the defendant ears he burdenofproving thatdamages ctuallywere(or shouldhavebeen) educed hrough actsof mitigation,includingtlrough theplaintiffs ptrsuit of altemativebusiness pportunitiesn placeofthe one denied o it by defendant'swrongdoing. See,e.g.oSteelductCo. v. Henger-SeltzeCo.,26 CaL2d634,654 1945) plaintiffzo/requiredo prove he amount f theprofits teamed hroughan alternativecontact secured fter defendant'sbreacb,because[t]heburdenofproofis on thepartywhosebreachcaused amage,o establishmatten relied onto mitigatedamage");Unerv. Chapman,43Ca1.279,2841872) "Theburden fproofwas on the defendantwhobreached ontracto charter] o show hat theboat andbargehad,or might have ealizedaprofif' throughanaltemativecontact); Stillwell v. R.C.A.Mfg Co.,62 Cal.App. 2d347"352 l9M) (T\e burdenwasupon he appellants,n theirattempt o minimize his damagecaused y their negligentdestructionof theplaintiffs

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old business],o show hat the oss had beendiminishedby the operationofthe newbusiness"). ndee4 underCalifomia law, at all times'the burdenof showingmatters nreductionor mitigationof damagesest[s] upon hedefendant;' Pfingstenv.Westenhaver,39al.2d 12"24 (1952).

Defendants imply ignore his body of Califomia law, and nsteadpurport o findsuppod n three ederalcasesor imposingupon Rambus he duty to provethe amountoftheo'benefit"it has eceivedor will receive rom Defendants'destructionof RambusosRDRAM business.Defendants rr.

First, the federalcases ited by Defendants rovidenopenuasivesupport orDefendants'position. Neither of the two federalCourt of Appealsdecisionscited byDefendants laces he burdenon theplaintiffto prove he value of a "benefif' confe,rredby the defendant'swrongdoing. On the contrary, n both caseshedefendanl aised he"benefits"offset ssue n the trial cottfi. SeeLos AngelesMemorial ColisewnComm'nv.Nat'l Football League,T9l F.2d 1366, (9th Cir. l9E6) ('\re conclude hat the districtcourt erred n limiting theNFL's damage ffset defense"); hnlington Indwt. v. Milliken& Co..690F.2d380,387-88 4thCir. 1982) describing ffer of proof n trial courtbydefendant).And, while Defendants o cite a one federaldistrict courtcasehatplacedthe burdenon theplaintiffto prove he value of a benefit t receivedas a result of thedefendant'smisconduc! seeMinpeco,S.A. v. Conticommodity ems., nc.,676 F. Supp.486,490 S.D.N.Y.1987), hatcourt's easonings notpersuasive.2

Second,f this Court were o deem t proper o look outsideCalifornia law, theproperplace o look would be o the aw of Michigan and Texasas t stoodprior toadoptionof the CartrvrightAct. This is because, s he Califomia SupremeCourthas2The District Cotxt n Minpeco simplycited wo casesha! in fact, stand or no morethan he unremarkable ro6osition hai aplaintiffmust dembnstrat6henet orofit it wouldhave eceived n the "birt for" worl4 not he grossproftt. SeeDeaktor v. Fitx GroceryCo., 475F.2d ll2, 1116-173dCil. l9B);Vtlmlfue (Cross-Country)rods., nc. v.Uniled ArtistsCom..662F. Siroo.798. 13 S.D.N.Y.198il. This rirooositions oartofCalifomialawasweil, ee,e.g.,Gerwinv.Si.Cal.Ass'nofSeventD;yAdventisis,1Cal.Aoo. 3d209-222-231911\-andsimolvhasno bearirie n he burclen f proofwithrespeci o the value of a "blenefii'iatlegedfyconfenedby wiongdoing.

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determine4 he Cartwright Act is pattemedon the antitrust st rtutesof MichiganandTexas,andnot on the federalantitruststatutes.SeeStateof Califtrnia ex rel. VandeKampv.Texaco,nc.,46Cal.3dll47,1160-62 1988).By l90T,bothofthesestates-consistentwith the overwhelmingnationalconcensus took the view that the defendantbears he burdenof proving facts showing hat damages ctuallywere or shouldhavebeemitigated.See, .g.o orter & McMillanv.Bwkett,Mwplty & Burns,65Tex. 383, 1886('A plaintiffis not bound o negativeeverything hat might defeathis action. f thedamages e showshe has ncurredare o be reduced rom anycause ot necessarilyoccurring in all suchcaseshis mustbe shownby the oppositepartytn defense");Fanellv. SchoolDist.,98 Mich. 43,47(1893) "Thedefensehat[thewrongtullydischargedemployee]was engagedn otherproflrtable mployment or might havehad o&er similaremploymen! s an affirmative one,and he burdenof proof is upon he defendant"). Seegenerally"Presumptionand burdenof proof regardingmitigation of damages," 34A.L.R.242 ("The overwhebningweight of authority s to the effect hat n actions ordamages rising out of either breachof contractor tort the burden s upon hepartywhosewrongful act causedhe damages omplained f to proveanything n diminution of thedamagesor, in other words, hat the damages ere essened r might havebeen essenedby reasonable iligenceon thepart ofthe aggrieved arty").

Third, andmost mportantly, heresimply is no reason o look outsideof Californiacorlmon law to determineheburdenofproof on this routineprincipleof damages. SeeSpeegle . Bd.of Fire Underwriters,2g C^1.2d 34, 46 (1946) ("elementary"common awdamagesule that wrongdoerbearsuncertaintyof damages reated y wrongdoingproperlyappliesunderCartwright Act); cf. AssociatedGen. Contractorsof Cal., Inc. v.Cal.StateCouncilofCarpenters,459.S.519,531-331983) "Therepeatedreferento the common aw in the debateshatprecededhe enactment f the ShermanAct make clear hat Congressntended he Act to be construedn the ligbt of its common-lawbackground. . . Althoughparticularcommon-law imitationswere not debatednCongress,he frequent eferenceso common-lawprinciples mply that Congress imply6990s3b.3 -7-

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assumedhat antitrustdamagesitigation would be subjecto consraintscomparableowell-accepted ommon-law ules applied n comparableitigation."). Indeed both theMinpeco aadLos AngelesMemorial Coliseun Comn'ncases pon which defendantsely,expresslyacknowledgehat the "non-fault basedoffset heory[which they apply] issimply a corollary ofthe generalprinciple,applicableoutside heantitrustcontext, hat anawardof damages houldput aplaintiff forward nto theposition t would havebeenoobufot''the defendant'siolationof the aw." Minpeco,676 . Supp. t 489(quotingosAngelesMemorialColisewt Comrnh,79lF.2dat 1367) italicsandbracketedmaterialadded).

In shor! in accordance ith longstandingCalifornia aw, Defendantswill bear heburdenat trial to show anyoobenefits"they contend heir conspiracy o thwartRDRAMconferredupon Rambus.

Because ftheir trial burden,Defendants ear lrc rurtitialguilar burdenofpresentingevidence ufficient o requireatrier of fact -- if tne evidencewent unrebutted-to conclude hat Rambusmore ikely than not hassufferedno actual qiury. Defendantshave ailed to carry hat burden hrough heir speculation bout hepossibleeventualpositiveoutcomeof the verypatent nfringement itigation with Rambus hey are ightingsohard o defeat. Califomia law is clear hat Rambus ould not increase ts claim foractualdamageswen by showing hat t is likely in the future o be subject o a liabilityand o pay t, or that t is alreadysubject o sucha liability and s likely to pay it in thefuture. Rather, teasonablecertainty" of payment s the minimum requirement.SeeGreenWoodrdw. Co. v. Forcemannt'l Dev. Group, nc.,156 Cal. App.4th766,776-78 Q007). It therefore s equally rue that Defendants annotdeueaseRambus'sclaim ofactualdamages asedon the speculative ossibility that Defendantsmay someday beliableto andpayRambuspatent nfringementdamages.

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D.

Even f Rambussomehowwould bear he burdenof proofat trial regarding"benefits" conferredby Defendants'wrongdoing,Defendants till failedto meet heirAguilar btxden here o provideevidence hat Rambus annotmeet ts trial burden.

There s no materialdisputebetween hepadies hat Rambus s preparedo presenevidence f$4 billion in damages venafterdeductionofall potentiallyrelevant oyaltiesand umpsumpaymentshal it actunlly has eceived hat relate o DRAM sales hatwouldnot have akenplacebut for Defendantshwarting RDRAM.3 Defendants'motionthereforehingesentirely on theproposition hat the nability of Rambus o provewhatpatent nfringementdamages,f any, t ultimatelywill collect rom the Defendantsconstitutes fatal failure of proof of actual njury.

However,assumingsolelyargtzndo that damages aid n compensationorDefendants'separate rong of patentnfringementsomehow onstitutesa "benefif'thatDefendantsconferred" hrough heir conspiracy o thwart RDRAM soas o constituteaproperoffset f received,ahe fact that anysuchpayment emainsspeculative hows hatRambushasmet any burden t might have o prove hat suchpotential uturepayments renot propeiy consideredn reductionof actualdamages.Cf,,Green Wood ndus. Co., 156Cal.App.4that776-78.

Furthermore, benefits" conferredare dnly properlysubject o offsetotothe extenthatthis is equitable." Hecl


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Gardens partment vestors"8" v. Pudwill,75Cal.App. 3d346,352(1977)("Mitigation of damagesn tort casess restrictedby principlesof equity, and nconversioncases, defendant enerallycannotdiminish he amountof damages ypayinga debt ofthe injuredpartywittrout the atter'sconsent"). It plainly is not equitableto depriveRambusaltogetherof its $4billion conspiracy laim asDefendants sk hisCourtto do -- or to imposean nterminablestaywhile every ast nfringementaction sresolved hroughappsal simFly becauseRambus annotprovethat it will finally prevaiagainstDefendantsn its federalactionsand actually ecover he amormtofpatentinfringementdamagest seeks. Rathero s his Courtpointedout when rejectingMcron'srequest or a stayof proceedingswhichwasbasedon he samearguments sDefendantspresentn this motion), f it ever ums out that ruly overlappingdamages reawarded nthisproceedingand hepatent nfringementproceedings,henadjwtnents to assuresingle satisfaction roperlycan be madeevenposdudgment o the extentauthorized ylaw. And in any even! the damages warded n this case o compensateor destructionofRambus'sRDRAM business nd he damages wardedn patent itigation to compensatefor theft of Rambus's ntellectualpropeaydo not truly overlap. See,e.g.,NintendoofAm., nc.v. DragonPac.nt'L.,40F.3d1007,01l (9thCir.1994); eealsoOppositionMicron's Motion o Stay, iled 121112008,t 6:9-7:16.III. CONCLUSION

For all ofthe foregoing easons,Defendants'motion shouldbe denied.DATED: lanvary26,2009 COTCHETT, ITRE& McCARTIT

Attomevs or PlaintiffRAMBTISINC.

OPPOSMON TO DEFENDANTS' MSJ MSA RE FAILURE TO PROVE NJIJRY

rambus opposition sj based on failure to prove injuries 012709[1]

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