Rambus'S Opp. To Hynix'S Mot. For Summary Judgment, Etc. CASE NO. 00-20905-RMW

Case5:00-cv-20905-RMW Document4193 Filed11/20/12 Page1 of 64
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Gregory P. Stone (SBN 078329) Fred A. Rowley, Jr. (SBN 192298) Jeffrey Y. Wu (SBN 248784) MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, 35th Floor Los Angeles, CA 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 Email: Gregory.Stone@mto.com Email: Fred.Rowley@mto.com Email: Jeffrey.Wu@mto.com Peter A. Detre (SBN 182619) MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, CA 94105-2907 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 Email: Peter.Detre@mto.com Attorneys for RAMBUS INC.
Rollin A. Ransom (SBN 196192) SIDLEY AUSTIN LLP 555 West Fifth Street, Suite 4000 Los Angeles, CA 90013-1010 Telephone: (213) 896-6000 Facsimile: (213) 896-6600 Email: rransom@sidley.com
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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
HYNIX SEMICONDUCTOR, INC., et al., Plaintiffs, vs. RAMBUS INC., Defendant.
CASE NO. CV 00-20905 RMW RAMBUS INC.S CONSOLIDATED OPPOSITION TO (1) HYNIXS MOTION FOR SUMMARY JUDGMENT OR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF THE COLLATERAL ESTOPPEL EFFECT OF REEXAMINATIONS OF RAMBUSS PATENTS; (2) HYNIXS MOTION FOR NEW TRIAL OR, IN THE ALTERNATIVE, FOR STAY; (3) HYNIXS MOTION FOR LEAVE TO FILE SUPPLEMENTAL REPLY Date: Time: Place: Judge: December 19, 2012 2:00 p.m. Courtroom 6 Hon. Ronald M. Whyte
RAMBUSS OPP. TO HYNIXS MOT. FOR SUMMARY JUDGMENT, ETC. CASE NO. 00-20905-RMW
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TABLE OF CONTENTS Page INTRODUCTION .......................................................................................................................... 1 FACTUAL BACKGROUND ......................................................................................................... 4 I. Hynix Failed To Prove Invalidity For Each Of The Ten Tried Claims, And The Court Awarded Damages Based On Licensing Royalties For Products Rather Than Specific Patent Claims ....................................................................... 4 In Reexamination, The PTO Confirmed Seven Of The Ten Tried Claims............. 7 Hynix Relies On Reexamination Of Claims Not Tried In This Case ................... 12 Summary Judgment Must Be Denied ................................................................... 13 A. B. C. The Mandate Rule Bars Reconsideration Of Patent Validity ................... 13 None Of The Claims Has Been Cancelled................................................ 14 Collateral Estoppel Must Be Denied......................................................... 16 1. 2. 3. The Different Legal Standards In Reexamination And Civil Actions Defeat Preclusion............................................................. 16 Reexamination Results For The Tried Claims Are Not Final....... 19 Validity Issues Are Not Identical Between The Seven Confirmed Claims And The Other Claims Considered By The Board...................................................................................... 21 a. b. c. d. e. f. g. 4. II. A. 918 patent, claim 24......................................................... 21 918 patent, claim 33......................................................... 22 020 patent, claims 32 ....................................................... 23 020 patent, claim 36......................................................... 23 916 patent, claim 9........................................................... 23 916 patent, claim 40......................................................... 24 105 patent, claim 34......................................................... 24
II. III. I.
ARGUMENT ................................................................................................................................ 13
The Court Should Exercise Its Discretion To Deny Estoppel....... 25
Hynixs Alternative New Trial Motion Is Meritless ............................................. 28 The Reexaminations Have No Impact On The Amount Of Damages Or The RAND Rate................................................................................... 29 Hynix Failed To Satisfy The Stringent Requirements For Avoiding The Federal Circuits Mandate Of No Invalidity...................................... 32 Hynix Cannot Show That The Reexamination Decisions Constitute Newly Discovered Evidence ................................................................. 33
C.
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TABLE OF CONTENTS (continued) Page 1. The Reexamination Decisions Are Not Newly Discovered, And Hynix Did Not Pursue Them With Sufficient Diligence ...................................................................... 33 The Reexamination Decisions Are Not Admissible Evidence .................................................................................... 36
2. D. III.
Hynix Cannot Use In re Rambus To Avoid Its Binding Stipulation To The Construction Of Memory Device.............................................. 39
Hynixs Request For A Stay Pending Reexamination Is Even More Meritless Than Its Similar Request In 2008.......................................................... 41 A. B. C. The Advanced Stage Of These Proceedings Weighs Decisively Against A Stay .......................................................................................... 42 A Stay Would Make Proceedings More, Not Less, Complex .................. 43 Hynixs Delay In Pursuing Reexamination, And Its Efforts To Avoid The Adverse Patent Verdict Here, Also Weighs Against A Stay............................................................................................................ 44 Hynix Cannot Establish Good Cause, Much Less Manifest Injustice ...... 45 Supplementation Is Not Proper Under Rule 15......................................... 46
IV.
The Court Should Deny Hynix Leave To File A Supplemental Reply................. 45 A. B.
CONCLUSION ............................................................................................................................. 51
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TABLE OF AUTHORITIES Page(s) FEDERAL CASES A-1 Ambulance Service, Inc. v. County of Monterey, 90 F.3d 333 (9th Cir. 1996)..................................................................................................... 29 Abbott GMBH & Co., KG v. Centocor Ortho Biotech, Inc., No. 09-11340-FDS, 2012 WL 1593182 (D. Mass. May 4, 2012) .......................................... 21 Affinity Labs of Texas v. Apple Inc., No. 09-04436 CW, 2010 WL 1753206 (N.D. Cal. Apr. 29, 2010)......................................... 44 Amado v. Microsoft Corp., 517 F.3d 1353 (Fed.Cir. 2008)......................................................................................... passim ASCII Corp. v. STD Entmt USA, Inc., 844 F. Supp. 1378 (N.D. Cal. 1994) ....................................................................................... 43 AT&T Intellectual Property I v. Tivo, Inc., 774 F. Supp. 2d 1049 (N.D. Cal. March 1, 2011)................................................................... 44 Aten Intl Co. v. Emine Tech. Co., Case No. SACV 09-0843 AG (MLGx), 2010 U.S. Dist. LEXIS 46226 (C.D. Cal. Apr. 12, 2010)........................................................................ 48 Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300 (Fed. Cir. 2009)............................................................................................... 29 Beery v. Hitachi Home Elecs. (America), Inc., 157 F.R.D. 481 (C.D. Cal. 1994) ............................................................................................ 48 Belden Techs. Inc. v. Superior Essex Commcns LP, No. 08-63-SLR, 2010 WL 3522327 (D. Del. Sept. 2, 2010) .................................................. 44 Belden Techs. Inc. v. Superior Essex Commcns, 802 F. Supp. 2d 555 (D. Del. 2011) ........................................................................................ 37 Best Buy Stores, L.P. v. Manteca Lifestyle Center, No. 2:10-cv-00389 WBS KJN, 2012 WL 2117670 (E.D. Cal. June 8, 2012).......................................................................................................... 46 Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629 (Fed. Cir. 2011)................................................................................. 2, 19, 20, 41 BIC Leisure Prods., Inc. v. Windsurfing Intl, Inc., 1 F.3d 1214 (Fed. Cir. 1993)................................................................................................... 49
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TABLE OF AUTHORITIES (continued) Page(s) Bosies v. Benedict, 27 F.3d 539 (Fed. Cir. 1994)................................................................................................... 18 Burson v. Carmichael, 731 F.2d 849 (Fed. Cir. 1984)................................................................................................. 27 Callaway Golf Co. v. Acushnet Co., 576 F.3d 1331 (Fed. Cir. 2009)............................................................................................... 36 Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348 (Fed. Cir. 2009)............................................................................................... 13 Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103 (1948) ................................................................................................................ 16 Clark v. Bear Stearns & Co., 966 F.2d 1318 (9th Cir. 1992)................................................................................................. 16 Coakwell v. United States, 292 F.2d 918 (Ct. Cl. 1961) .................................................................................................... 18 Coleman v. Quaker Oats Co., 232 F.3d 1271 (9th Cir. 2000)................................................................................................. 45 DataQuill Ltd. v. High Tech Computer Corp., -- F. Supp. 2d --, 2011 WL 6013022 (S.D. Cal. Dec. 1, 2011) ............................................... 36 Dias v. Elique, 436 F.3d 1125 (9th Cir. 2006)........................................................................................... 17, 18 Energy Transp. Grp., Inc. v. William Demant Holding A/S, -- F.3d --, 2012 WL 4840813 (Fed. Cir. 2012) ....................................................................... 30 Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379 (Fed. Cir. 1999)............................................................................................... 13 ePlus, Inc. v. Lawson Software, Inc., No. 3:09cv620, 2011 WL 2119413 (E.D. Va. May 24, 2011)................................................ 38 Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082 (9th Cir. 2003)........................................................................................... 33, 39 Flexiteek Americas, Inc. v. Plasteak, Inc., Report and Recommendation, No. 08-60996CIV-COHN/SELTZER (S.D. Fla. Sept. 10, 2012) ................................................................. 15
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TABLE OF AUTHORITIES (continued) Page(s) Flo Healthcare Solutions, LLC v. Kappos, -- F.3d --, 2012 WL 5200330 (Fed. Cir. Oct. 23, 2012) ........................................................... 8 Foman v. Davis, 371 U.S. 178 (1962) ................................................................................................................ 47 Fresenius Med. Care Holdings, Inc. v. Baxter Intl, Inc., No. C 03-1431 SBA, 2007 WL 1655625 (N.D. Cal. June 7, 2007) ....................................... 42 Fresenius U.S.A., Inc. v. Baxter Intl, Inc., No. C 03-1431 PJH, 2011 WL 2160609 (N.D. Cal. May 26, 2011) (Fresenius III) ..... 30, 43 Fresenius USA, Inc. v. Baxter Intl, Inc., 582 F.3d 1288 (Fed. Cir. 2009)......................................................................................... 43, 44 Ganem v. Heckler, 746 F.2d 844 (D.C. Cir. 1984) ................................................................................................ 27 Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529 (N.D. Cal. 1989) ............................................................................................ 48 Griffin v. Cnty. Sch. Bd., 377 U.S. 218 (1964) ................................................................................................................ 49 Harbeson v. Parke Davis, Inc., 746 F.2d 517 (9th Cir. 1984)................................................................................................... 49 Howey v. U.S., 481 F.2d 1187 (9th Cir. 1973)........................................................................................... 48, 49 Hynix Semiconductor Inc. v. Rambus Inc., 2009 WL 292205 (Feb. 3, 2009)...................................................................................... passim Hynix Semiconductor Inc. v. Rambus Inc., 645 F.3d 1336 (Fed.Cir. 2011)...................................................................................... 5, 13, 32 Hynix Semiconductor v. Rambus Inc., 609 F. Supp. 2d 951 (N.D. Cal. 2009) .................................................................................... 31 IA Labs CA, LLC v. Nintendo Co., Ltd., 857 F. Supp. 2d 550 (D. Md. 2012) ........................................................................................ 37 In re Baxter Intl, Inc., -- F.3d --, 2012 WL 5275335 (Fed. Cir. Oct. 26, 2012) ......................................................... 16
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TABLE OF AUTHORITIES (continued) Page(s) In re Caveney, 761 F.2d 671 (Fed. Cir. 1985)................................................................................................. 17 In re Peng Tan, No. 2008-1421, 2008 WL 4972985 (Fed. Cir. Oct. 29, 2008)................................................ 20 In re Rambus Inc., 694 F.3d 42 (Fed. Cir. 2012)............................................................................................ passim In re Reynoso, 477 F.3d 1117 (9th Cir. 2007)............................................................................................. 2, 21 In re Sanford Fork & Tool Co., 160 U.S. 247 (1895) ................................................................................................................ 13 In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008)......................................................................................... 16, 17 In re Translogic Tech., Inc., 504 F.3d 1249 (Fed. Cir. 2007)............................................................................................... 15 Jackson v. Bank of Hawaii, 902 F.2d 1385 (9th Cir. 1990)................................................................................................. 47 Jackson v. Laureate, Inc., 186 F.R.D. 605 (E.D. Cal. 1999) ............................................................................................ 46 Jim Beam Brands Co. v. Beamish & Crawford Ltd., 937 F.2d 729 (2d Cir. 1991).................................................................................................... 17 Johnson v. Mammoth Recreations, Inc., 975 F.2d 604 (9th Cir. 1992)............................................................................................. 45, 46 Jones v. Aero/Chem Corp., 921 F.2d 875 (9th Cir. 1990)............................................................................................. 33, 34 Jones v. Hardy, 727 F.2d 1524 (Fed. Cir. 1984)............................................................................................... 21 K-Tec, Inc. v. Vitax Mix Corp, 696 F.3d 1364, 2012 WL 3856914. (Fed. Cir. Sept. 6, 2012) .................................... 36, 37, 38 Keith v. Volpe, 858 F.2d 467 (9th Cir. 1988)............................................................................................. 49, 50
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TABLE OF AUTHORITIES (continued) Page(s) Laitram Corp. v. NEC Corp., 115 F.3d 947 (Fed. Cir. 1997)................................................................................................. 32 Lazare Kaplan Intl, Inc. v. Photoscribe Techs., Inc., 628 F.3d 1359 (Fed. Cir. 2010)............................................................................................... 40 Like.com v. Superfish, Inc., No. 09-CV-5805-SBA, 2010 WL 2635763 (N.D. Cal. June 30, 2010) .................................. 43 Littlejohn v. United States, 321 F.3d 915 (9th Cir. 2003)................................................................................................... 16 Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980 (9th Cir. 1999)............................................................................................. 47, 50 Lummus Co. v. Commonwealth Oil Refining Co., 297 F.2d 80 (2d Cir. 1961)...................................................................................................... 20 Memphis Community School Dist. v. Stachura, 477 U.S. 299 (1986) ................................................................................................................ 31 Mendenhall v. Barber-Greene Co., 26 F.3d 1573 (Fed. Cir. 1994)..................................................................................... 14, 18, 20 Meritor Transmission Corp. v. Eaton Corp., No. 1:04CV178, 2006 WL 3951711 (W.D.N.C. Sept. 26, 2006) ..................................... 18, 21 Microsoft Corp. v. i4i Ltd. Pship, 131 S. Ct. 2238 (2011) ...................................................................................................... 17, 18 Network Appliance Inc. v. Sun Microsystems, No. C-07-06053 EDL, 2008 WL 2168917 (N.D. Cal. May 23, 2008) ................................... 43 Nguyen v. United States, 792 F.2d 1500 (9th Cir. 1986)................................................................................................. 49 NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005)......................................................................................... 31, 41 Ohio Willow Wood Co. v. ALPS South, LLC, No. 2:04-cv-1223, 2012 WL 2196083 (S.D. Ohio June 15, 2012) ......................................... 21 One Lot Emerald Cut Stones & One Ring v. United States, 409 U.S. 232 (1972) ................................................................................................................ 17
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TABLE OF AUTHORITIES (continued) Page(s) Oracle Am. Inc. v. Google, Inc., No. C 10-03561 WHA, 2012 WL 1189898 (N.D. Cal. Jan. 4, 2012)..................................... 38 Otis Elevator Co. v. 570 Building Corp., 35 F. Supp. 348 (E.D.N.Y. 1940) ........................................................................................... 49 Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322 (1979) .......................................................................................................... 26, 28 Phelps v. Alameida, 569 F.3d 1120 (9th Cir. 2009)................................................................................................. 33 Plaut v. Spendthrift Farms, Inc., 514 U.S. 211 (1995) ................................................................................................................ 16 PSKS, Inc. v. Leegin Creative Leather Prods., 615 F.3d 412 (5th Cir. 2010)................................................................................................... 30 Raduga USA Corp. v. U.S. Dept. of State, 440 F. Supp. 2d 1140 (S.D. Cal. 2005) ................................................................................... 49 Rambus Inc. v. Hynix Semiconductor Inc., 569 F. Supp. 2d 946 (N.D. Cal. July 10, 2008)....................................................................... 40 Rambus Inc. v. Infineon Techs. AG, 318 F.3d 1081 (Fed. Cir. 2003)......................................................................................... 22, 39 San Luis & Delta-Mendota Water Auth. v. U.S. Dept of Interior, 236 F.R.D. 491 (E.D. Cal. 2006) ............................................................................................ 50 Senza-Gel Corp. v. Seiffhart, 803 F.2d 661 (Fed. Cir. 1986)..................................................................................... 47, 48, 49 SKF Condition Monitoring, Inc. v. Invensys Sys., Inc., Case No. 07cv1116 BTM (BGS), 2010 U.S. Dist. LEXIS 90305 (S.D. Cal. Aug. 31, 2010) ....................................................................................................................................... 47 Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511 (Fed. Cir. 1990)............................................................................... 15, 33, 38, 39 Standard Havens Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360 (Fed. Cir. 1991)............................................................................. 15, 20, 33, 39 Standard Havens Prods., Inc. v. Gencor Indus., Inc., No. 93-1208, 1993 WL 172432 (Fed. Cir. May 21, 1993) ..................................................... 15
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TABLE OF AUTHORITIES (continued) Page(s) Storus Corp. v. Aroa Mktg., Inc., No. C-06-2454 MMC, 2008 WL 540785 (N.D. Cal. Feb. 25, 2008) ..................................... 42 Tan v. Integrated Silicon Solutions, Inc., No. C07-06166 WHA, 2008 WL 2340217 (N.D. Cal. June 5, 2008)............................... 18, 20 TDM Am. LLC v. United States, 100 Fed. Cl. 485 (Ct. Cl. 2011)............................................................................................... 33 Telemac Corp. v. Teledigital Inc., 450 F. Supp. 2d 1107 (N.D. Cal. 2006) .................................................................................. 42 Tenneco Resins, Inc. v. Reeves Bros., Inc., 752 F.2d 630 (Fed. Cir. 1985)........................................................................................... 48, 49 Tesco Corp. v. Weatherford Intl Inc., 750 F. Supp. 2d 780 (S.D. Tex. 2010) .............................................................................. 36, 37 Tivo, Inc. v. Echostar Commcns Corp. 516 F.3d 1290 (Fed. Cir. 2008)............................................................................................... 30 Translogic Tech., Inc. v. Hitachi, Ltd., 250 Fed. Appx 988, 2007 WL 2973955 (Oct. 12, 2007)....................................................... 15 Tronzo v. Biomet, Inc., 236 F.3d 1342 (Fed. Cir. 2001)............................................................................................... 32 U.S. Steel v. D. DeMatteo Constr. Co., 315 F.3d 43 (1st Cir. 2002) ..................................................................................................... 34 United States v. Bell, 5 F.3d 64 (4th Cir. 1993)................................................................................................... 32, 39 United States v. Cimera, 459 F.3d 452 (3d Cir. 2006).................................................................................................... 34 United States v. Fernandez, 506 F.2d 1200 (2d Cir. 1974).................................................................................................. 32 United States v. Kennedy, 682 F.3d 244 (3d Cir. 2012).................................................................................................... 13 United States v. Thrasher, 483 F.3d 977 (9th Cir. 2007)................................................................................................... 13
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TABLE OF AUTHORITIES (continued) Page(s) Verizon Serv. Corp. v. Vonage Holdings Corp., 503 F.3d 1295 (Fed. Cir. 2007)............................................................................................... 31 Viskase Corp. v. American Natl Can Co., 261 F.3d 1316 (Fed. Cir. 2001)............................................................................................... 42 Wireless Recognition Techs. v. A9.com, Inc., Nos. 12-01217 EJD, et al., 2012 WL 4005459 (N.D Cal. Sept. 11, 2012)........................................................................................................ 43 Yankee Atomic Elec. Co. v. United States, 679 F.3d 1354 (Fed. Cir. 2012)............................................................................................... 14 Yodlee, Inc. v. Ablaise, Ltd., No. C-06-07222 SBA, et al., 2009 WL 112857 (N.D. Cal. 2009).......................................... 44 Ziptronix, Inc. v. Omnivision Techs., Inc., Case No. C 10-05525 SBA, 2012 U.S. Dist. LEXIS 108577 (N.D. Cal. Aug. 2, 2012) ............................................................................... 48 FEDERAL STATUTES 35 U.S.C. 317(b) (2011)......................................................................................................... passim 35 U.S.C. 112, Apr. 12, 2006 (D.E. 2008)................................................................................... 6 35 U.S.C. 282 ....................................................................................................................... 17, 18 35 U.S.C. 311-18.................................................................................................................... 8, 19 35 U.S.C. 315 (2011) ............................................................................................................. 9, 11
20 35 U.S.C. 315(a) (Sept. 16, 2012).............................................................................................. 27 21 22 23 24 25 26 27 28 35 U.S.C. 315(b) (Sept. 16, 2012) ............................................................................................. 27 35 U.S.C. 315(c) (2011)....................................................................................................... 19, 20 35 U.S.C. 316 (2011) ............................................................................................................. 8, 20 35 U.S.C. 316(a) (2011)................................................................................................... 2, 15, 20 35 U.S.C. 317 (2011) ................................................................................................................. 19 35 U.S.C. 317(b) (2011)........................................................................................... 26, 27, 35, 49 Public Law 112-29, sec. 6(c)(3)(C), Sept. 16, 2011 ....................................................................... 8
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1 2 3 4 5 6 7 8 9 FEDERAL RULES
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Fed. R. Civ. P. 12(b)(6)................................................................................................................. 50 Fed. R. Civ. P. 15 ........................................................................................................ 45, 46, 47, 51 Fed. R. Civ. P. 15(d) ..................................................................................................................... 50 Fed. R. Civ. P. 16 .............................................................................................................. 45, 47, 51 Fed. R. Civ. P. 16(e)............................................................................................................ 4, 40, 45 Fed. R. Civ. P. 59 .................................................................................................................... 32, 34
10 11 12 13 14 15 16 17 18 19 20 21 22 23 18 Wright & Miller, Federal Practice & Procedure 4422 (2d ed. 2012).............................. 16, 17 24 Restatement (Second) of Judgments 28(4) .......................................................................... 16, 19 25 26 27 28 18A Wright & Miller, Federal Practice & Procedure 4465.2 (2d ed. 2002).............................. 27 OTHER AUTHORITIES Manual of Patent Examining Procedure 2601 (8th ed. rev. 8 July 2010) .................................. 27
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Fed. R. Civ. P. 59(a)...................................................................................................................... 34 Fed. R. Civ. P. 59(b) ..................................................................................................................... 32 Fed. R. Civ. P. 60 .............................................................................................................. 33, 34, 39 Fed. R. Civ. P. 60(b) ......................................................................................................... 18, 33, 34 Fed. R. Civ. P. 60(b)(2)........................................................................................................... 33, 34 Fed. R. Civ. P. 60(b)(6)........................................................................................................... 33, 34 Fed. R. Evid. 403 .......................................................................................................................... 37 FEDERAL REGULATIONS 37 C.F.R. 41.77(b) ..................................................................................................................... 20 LEGISLATIVE MATERIALS 145 Cong. Rec. H11804-05, 1999 WL 1015352 .......................................................................... 27 TREATISES
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TABLE OF AUTHORITIES (continued) Page(s) Manual of Patent Examining Procedure 2686.04 (8th ed. rev. 8 July 2010) ....................... 17, 35 Manual of Patent Examining Procedure 2687 (8th ed. rev. 8 July 2010) .................................... 8
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INTRODUCTION This case has been pending for twelve years. The long arc of this litigation has included three trials, a full merits appeal to the Federal Circuit, and extensive proceedings to address the spoliation issues presented on remand. Despite having chosen this forum, Hynix now seeks to undo this Courts and the Federal Circuits final adjudication of its validity challenges, arguing that recent reexaminations somehow justify extraordinary relief: summary judgment in its favor, a new patent trial, or a stay just as the Court nears judgment.1 But Hynix ignores that most of the claims tried in this case have been confirmed in reexamination. Hynix also ignores that it could have sought reexamination years ago, before its invalidity challenge was tried to a jury, and before the Court and the parties expended enormous resources prosecuting this highly complex case to judgment. Instead of requesting prior or parallel reexamination, Hynix elected to present its invalidity challenge solely in this Court. After the jury returned a verdict of no invalidity, Hynix continued to sit on its hands even as Samsung and Micron began to request reexaminations of Rambuss patents. Hynix itself filed no reexamination requests until 2009, on the eve of this Courts first entry of judgment in this case. Hynix offers no explanation for this striking and inexcusable delay; the only plausible inference is that Hynix sought to gain a tactical advantage by exploiting the decade-plus pendency of this case, and by presenting defenses seriatim in the hope that something would eventually stick. That is not how our system of justice works. By now, this litigation has progressed so far that basic principles of finality, taken together with the stringent requirements for preclusion or a new trial, foreclose the extraordinary relief Hynix seeks. Because Hynix has already lost on its patent defenses, and the Federal Circuit has already affirmed that result, the mandate rule stands as a bulwark against relitigation of them. The reexamination results asserted by Hynix, in any event, cannot bear the weight
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See Hynix Mot. for Summ. J, or in the Alternative, Partial Summ. J. on the Issue of the Colalteral Estoppel Effect of Reexaminations., Oct. 17, 2012 (D.E. 4164) (SJ Mot.); Hynix Mot. for New Trial, or in the Alternative, Motion for Stay, Oct. 17, 2012 (D.E. 4166) (New Trial Mot.); Hynix Mot. for Leave to File Supp. Reply, Oct. 17, 2012 (D.E. 4165) (Mot. for Leave). Rambus submits this consolidated opposition to these motions pursuant to the Stipulation and Order Permitting a Consolidated Opposition to Hynixs Motions, Nov. 20, 2012 (D.E. 4189). -1RAMBUSS OPP. TO HYNIXS MOT. FOR SUMMARY JUDGMENT, ETC. CASE NO. 00-20905-RMW
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of Hynixs arguments. Not one of the claims-in-suit has been cancelled. Instead, seven of the ten claims-in-suit, from the 918, 105, and 916, and 020 patents, have been confirmed in reexamination. As Hynix acknowledges, confirmations for six of these seven claims are not subject to appeal. Hynixs motions rest heavily on non-final BPAI and PTAB (collectively, the Board) decisions rejecting the remaining three claims-in-suit: claim 33 of the 120 patent, claim 28 of the 916 patent, and claim 16 of the 863 patent. These reexamination proceedings are not yet complete, and remain subject to review in the Federal Circuit. Regardless of what ultimately happens with these three claims in reexamination, Hynix will remain an adjudged infringer of seven confirmed claims. These results do not justify the extraordinary forms of relief Hynix seeks: Summary Judgment: Hynixs summary judgment bid suffers from a fundamental flaw. Hynix conflates two legally distinct bases for relief: (1) the statutory cancellation of a previously issued patent claim, which occurs only after the PTO publishes a certificate cancelling any claim of the patent finally determined to be unpatentable, 35 U.S.C. 316(a) (2011); and (2) the doctrine of collateral estoppel, which refers to the preclusive effect of a judgment in foreclosing relitigation of issues that have been actually and necessarily decided in earlier litigation, In re Reynoso, 477 F.3d 1117, 1122 (9th Cir. 2007). Once these doctrines are properly framed, it becomes clear that neither supports the relief Hynix seeks. Statutory cancellation has not occurred for any of the tried claims. Given the lack of any statutory cancellation, Hynix has instead rested its motion on collateral estoppel. But Hynix cannot satisfy the most basic requirement of collateral estoppelidenticality of issues across proceedings. This is because, inter alia, reexamination is governed by a preponderance-of-evidence standard that is far more lenient than the clear-and-convincing standard that Hynix had the burden of meeting, and failed to meet, in this case. Other collateral estoppel factors likewise require denial of summary judgment. Not one of the three adverse Board decisions involving a tried claim is final, because Congress has mandated that an inter partes reexaminationand all of the reexaminations relied upon by Hynix for preclusion are inter partesis not final for preclusion purposes until the exhaustion of appeals. Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 642-48 (Fed. Cir.
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2011). And the seven claims confirmed in reexamination are not identical to the related claims that Hynix asserts as the basis for estoppel. Even apart from these doctrinal failings, this Court should exercise its discretion against giving the reexaminations preclusive effect. In fashioning the inter partes reexamination scheme, Congress had put in statutory estoppel provisions to prevent a losing party in civil litigation from getting another bite at the apple by maintaining inter partes reexamination, see 35 U.S.C. 317(b) (2011), a limit Hynix evaded only by suing Rambus separately rather than joining in the earlier-filed Micron litigation. That tactic positioned Hynix to get its own separate trial, and then to invoke Microns reexaminations even if it lost at trial. Applying preclusion would reward Hynix for multiplying litigation and contravene the legislative design behind inter partes reexamination. The confirmation of seven claims-in-suit further weighs strongly against preclusion. New Trial: As an alternative to collateral estoppel, Hynix asks this Court to vacate its claim construction, as well as the jurys verdict that the claims in suit were infringed and not invalid. But Hynix does not get a do-over years later just because its trial strategy did not produce the outcome it desired. Unwinding these proceedings at this late stage would be extraordinarily costly and wasteful, with no ultimate effect on this Courts damages analysis. Because, on the record before this Court, the damages here, including the RAND rate, are based on licensing rates for infringing products, without distinction among individual patent claims, the rejection of three claims-in-suit, even if affirmed by the Federal Circuit, would still leave Rambus with the same award. Hynix failed to present any evidence at trial for valuing damages on a claim-by-claim basis, and thereby waived any challenge to a damages award based on productbased royalties. In any event, the examination results are not newly discovered evidence, because Hynix, among other things, failed to exercise reasonable diligence in pursuing reexaminations. Nor can the Federal Circuits decision in In re Rambus Inc., 694 F.3d 42 (Fed. Cir. 2012), justify a new trial, since Hynix stipulated to the construction of memory device used by this Court and thereby waived any challenge to that construction. Hynix further failed to
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establish prejudice, as the PTO confirmed claims with that limitation under an even broader construction of memory device than what Hynix now asserts. Stay: The case for a stay is weaker than when this Court rejected Hynixs request to stay Case No. 05-00334 pending reexaminations in 2008. Then, as now, the fact that Hynix failed to diligently pursue reexamination, and filed its own petitions only after it had suffered an adverse patent verdict, weighed heavily against a stay. But at this point, the patent issues have been fully litigated, and the outcome affirmed by the Federal Circuit. With only the RAND issues to be resolved pursuant to the Courts spoliation decision, a stay would add complexity to this case, rather than simplify it, and cause substantial prejudice to Rambus. Leave for Supplemental Reply: Hynix cannot demonstrate good cause, let alone the manifest injustice required by Rule 16(e), to plead a new collateral estoppel defense at this late hour. The allegedly invalidating prior art references Hynix now seeks to assert have been publicly available for decades, yet Hynix did not begin filing requests for ex parte reexamination until 2009. Nor did Hynix seek inter partes reexaminations, even though it could have done so years ago. Hynixs lack of diligence forecloses its belated motion for leave, not to mention the prejudice that further delay would cause Rambus, and the fact that Hynixs new defense is meritless in any event. FACTUAL BACKGROUND I. Hynix Failed To Prove Invalidity For Each Of The Ten Tried Claims, And The Court Awarded Damages Based On Licensing Royalties For Products Rather Than Specific Patent Claims In August 2000, Hynix and Micron filed suit against Rambus in different fora on opposite coasts on successive days, in what the Court has found to be a coordinated, dual-front litigation against Rambus. Hynix Semiconductor Inc. v. Rambus Inc., 2009 WL 292205, at *5 (Feb. 3, 2009) (CE Order). In response to Hynixs claim for declaratory relief of invalidity, Rambus asserted that Hynixs SDRAM and DDR products infringed fifteen separate Rambus patents. See Rambuss Answer to Second Amended Complaint and Amended Counterclaim, Nov. 25, 2002 (D.E. 249). In December 2004, the Court ordered Rambus to reduce, to no more than ten, the number of patent claims it would assert at trial. See D.E. 640, Dec. 17, 2004
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(requiring [r]eduction of claims to 10 by Rambus ); Order for Adjustment of Pretrial Schedule, Jan. 11, 2005 (D.E. 695). To comply with the order, Rambus selected ten claims from six patents for trial, while preserving the non-elected claims. See Rambuss Election of Ten Claims for Trial, Jan. 21, 2005 (D.E. 705).2 In March 2006, the parties validity and infringement contentions for the ten elected patent claims were tried to a jury. Following summary judgment practice and trial, Hynixs SDRAM products were found to infringe all five patent claims asserted against them,3 and Hynixs DDR SDRAM products were found to infringe all ten claims. All of the claims were also found not invalid. Hynix filed a motion for a new trial on patent validity, which the Court denied. See Order Denying Hynixs Mot. for a New Trial on Invalidity, Jan. 16, 2009 (D.E. 3875). The Federal Circuit affirmed. Hynix Semiconductor Inc. v. Rambus Inc., 645 F.3d 1336, 1353 (Fed.Cir. 2011) (Hynix II) (commending the Courts comprehensive and well-reasoned opinion denying Hynixs motion for a new trial). At trial, the jury was asked to make a separate award of damages for each of the two infringing classes of product (i.e., SDRAM and DDR SDRAM), without differentiation among individual patent claims. See Special Verdict, Apr. 24, 2006 (D.E. 2053). This approachwhich was agreed to by the partieswas consistent with the record evidence on SDRAM and DDR license agreements that Rambus had entered into in 2000, which licensed Rambuss entire patent portfolio, rather than just individual patent claims, for use in those products. See Wu Decl. in Support of Rambuss Consolidated Oppn, concurrently filed, Ex. A (Patent Trial Tr. 1054:15-1055:21) (describing these as agreements to pay royalties for the use of Rambuss patents in SDR and DDR SDRAM) (Teece). This approach was consistent with the record evidence regarding licensing terms that Rambus proposed to Hynix in 2000, which would have licensed the entire Rambus patent portfolio for SDR and DDR DRAM to Hynix, without
2
The ten claims are: Patent No. 5,915,105, claim 34; Patent No. 6,034,918, claims 24 and 33; Patent No. 6,324,120, claim 33; Patent No. 6,378,020, claims 32 and 36; Patent No. 6,426,916, claims 9, 28, 40; Patent No. 6,452,863, claim 16. 3 SDRAM infringed claim 24 of the 918 patent, claim 9 of the 916 patent, claim 28 of the 916 patent, claim 33 of the 120 patent, and claim 16 of the 863 patent. See Special Verdict Form, Apr. 24, 2006 (D.E. 2053); Clarified and Corrected Order on Rambuss Mot. for Summ. J. of Infringement, Jan. 19, 2005 (D.E. 706).
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any distinction among patent claims. See Wu Decl. Ex. B (Patent Trial Trial Ex. 5669) (licensing presentation), at 4 (offering license for all patents owned by Rambus which are infringed by currently available SDR and DDR products); see also Wu Decl. Ex. C (Patent Trial Ex. 5679) (proposed license agreement), at 8-9 (similar). It was also consistent with the RDRAM and Other DRAM license agreement between Rambus and Hynix. See Wu Decl. Ex. D (Conduct Trial Ex. 4028), at 3 (license for all patents, patent applications in all countries of the world which, during the term of this Agreement, are owned by Rambus .). Rambuss licensing and damages expert David Teece opined that there was no significant difference between licensing the entire patent portfolio and licensing a small subset of that portfolio, because the real value of a patent portfolio comes from key patents that are important to todays leading edge technology. Wu Decl. Ex. A (Patent Trial Tr. 1138:18-1139:15); see also id. Ex. A (Patent Trial Tr. 1062:201063:16). After trial, Rambus accepted a remittitur to royalty rates commensurate with those in the Hitachi license agreement. Order Granting Hynixs Mot. for a New Trial, July 14, 2006 (D.E. 2197); Notice of Acceptance of Remittitur, July 27, 2006 (D.E. 2229). At trial, Hynix never presented any evidence, nor argued, that the royalty rate would be different depending on which of Rambuss patent claims would be found infringed and not invalid. Rather, Hynix argued that Rambuss proposed rates were too high given Hynixs financial difficulties, and relative to how much other companies charged for their patent licenses. See e.g., Wu Decl. Ex. A (Patent Trial Tr. 3398:2-17) (counsel arguing that Hynix would not have agreed to rates because it was losing money); id. Ex. A (Patent Trial Tr. 2163:14-2165:14) (testimony from Hynix expert Weinstein regarding Hynix royalties for patents owned by other companies). After trial, consistent with its trial presentation and with the verdict form, Hynix moved for JMOL and a new trial, mounting claim-specific arguments for invalidity, but did not seek a reduction of damages in the event the Court granted relief for a subset of claims. See Hynixs Mot. for JMOL that Rambuss Asserted Claims Are Invalid for Failure to Satisfy the Written Description Requirement of 35 U.S.C. 112, Apr. 12, 2006 (D.E. 2008); Hynixs Mem. in Support of Mot. for a New Trial on Invalidity Due to Prior Art, May 16, 2006 (D.E. 2078).
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II.
In Reexamination, The PTO Confirmed Seven Of The Ten Tried Claims The ten tried claims have been subject to numerous reexamination proceedings
before the PTO. These include ex parte reexaminations initiated by Hynix, as well as inter partes reexaminations initiated earlier by Samsung and Micron. Samsung is no longer participating in the reexaminations. See Wu Decl. Ex. E (Samsung Statement of Non-Participation, dated February 11, 2010, for reexamination of 120 patent); id. Ex. F (same for 916 patent); id. Ex. G (same for 863 patent); id. Ex. H (same for 020 patent). For years after its defeat at trial, Hynix did not seek reexamination of the tried claims. In 2009 and 2010, as the Court entered final judgment and the Federal Circuit appeal commenced, Hynix belatedly filed multiple requests for ex parte reexamination of the tried claims. All of Hynixs eleventh-hour ex parte reexamination requests failed. For six of the ten claims tried here, the PTO either denied ex parte reexamination outright, finding that Hynix failed to establish a substantial new question of patentability, or confirmed the claims after granting reexamination. In fact, once the inter partes reexaminations filed by Micron and Samsung are considered, seven of the ten tried claims have been confirmed by the PTO examiner in reexamination, in many cases over the same prior art that Hynix is now advancing. Some claims have been confirmed multiple times in reexamination. Hynixs DDR products infringe all seven of these confirmed claims, and Hynixs SDRAM products infringe two of the seven claims, i.e. claim 24 of the 918 patent and claim 9 of the 916 patent. As Hynix has acknowledged, decisions confirming six of the seven claims are not subject to appeal. New Trial Mot. at 4-5. Three other claims have been rejected in interlocutory Board decisions in inter partes reexamination initiated by Samsung and Micron. Two of the three claimsclaim 33 of the 120 patent and claim 28 of the 916 patentwere initially confirmed by the PTO examiner, but the confirmations were subsequently reversed by the Board. The last claim, claim 16 of the 863 patent, was recently rejected by the Board. For all three claims, reexamination is pending and the BPAI decision is not final, and that will remain the case until the exhaustion of appeals, including appeals to the Federal Circuit. That is because the certificate of reexamination that officially confirms, cancels, or amends a claim will not issue until after all appeals are concluded.
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35 U.S.C. 316 (2011);4 Manual of Patent Examining Procedure 2687 (8th ed. rev. 8 July 2010) (MPEP). The reexamination status of each of the ten tried claims are summarized below. Claims 24 of the 918 patent: Hynix requested reexamination of this claim on February 23, 2009, in ex parte reexamination No. 90/010,420. See Taylor Decl. in Support of Hynix Mots., Oct. 17, 2012, Ex. 42 (Advisory Action, Mar. 26, 2010). The PTO examiner confirmed the claims validity over the Bennett reference, which is the same reference Hynix now contends renders the claim invalid. See id. at 2; SJ Mot. at 21. The reexamination certificate has yet to issue because reexamination proceedings are ongoing for claim 18 of the same patent, a claim that was not tried in this case. The examiner and the Board rejected claim 18, which is an independent claim from which confirmed claims 24 and 33 depend, and the Federal Circuit affirmed while adopting a claim construction different from that of the Board and the examiner. See In re Rambus, 694 F.3d at 45, 50. Rehearing proceedings remain pending in the Federal Circuit; Rambus filed a petition for rehearing, and the panel has ordered the PTO to file a response. Wu Decl. Ex. I (Federal Circuit Docket, No. 2011-1247). Claim 33 of the 918 Patent: In the 420 reexamination requested by Hynix, the PTO confirmed this claims validity over prior art references iAPX, Lofgren, Bazes, and iRAM. See Taylor Decl. Ex. 42, at 2. iAPX and Lofgren are among the same references that Hynix is now asserting against this claim. SJ Mot. at 22. As noted above, the reexamination certificate for this patent has not issued because an appeal regarding claim 18, which was not tried here, is pending in the Federal Circuit. Claim 33 of the 120 patent: There are two separate, ongoing reexamination proceedings regarding this claim, one of which has led to an interlocutory rejection by the Board. First, in May 2010, Hynix requested an ex parte reexamination that resulted in the PTO examiner The relevant inter partes reexaminations are governed by 35 U.S.C. 311-18 as it existed prior to September 16, 2012. On that day, the Leahy-Smith American Invents Act (AIA) took effect and replaced inter partes reexaminations with a new inter partes review process. Flo Healthcare Solutions, LLC v. Kappos, -- F.3d --, 2012 WL 5200330, at *13 n.4 (Fed. Cir. Oct. 23, 2012) (Newman, J., additional views). The AIA provides that [t]he provisions of Chapter 31 of Title 35, United States Code [i.e. 35 U.S.C. 311-318], as amended by this paragraph, shall continue to apply to requests for inter partes reexamination that are filed before [September 16, 2012] as if subsection (a) [i.e. the AIAs inter partes review provisions] had not been enacted. Public Law 112-29, sec. 6(c)(3)(C), Sept. 16, 2011.
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confirming claim 33 over the Bennett and Fujishima references. Wu Decl. Ex. J (Final Office Action, Aug. 26, 2011, for reexamination No. 90/011,005) at 2-16. The reexamination is ongoing because Rambus appealed the rejection of other claims of this patent, which were not tried in this case, to the Board. Wu Decl. Ex. K (Notice of Appeal, Dec. 27, 2011). Second, in merged inter partes reexaminations Nos. 95/000,178 and 95/001,152, first filed by Samsung in October 2006 and merged by the PTO with a subsequent 2009 request by Micron, see Wu Decl. Ex. L (Decision, Sua Sponte, to Merge Reexamination Proceedings, July 21, 2009) (120 patent) at 2 & n.1, the PTO examiner initially confirmed the validity of this claim over Bennett in view of the Wicklund, Bowater, or Olson references.5 Taylor Decl. Ex. 10 (Decision on Appeal, Jan. 19, 2012) at 3. In February 2010, Samsung filed a notice of non-participation. Wu Decl. Ex. E. On appeal the Board then reversed and rejected the claim in light of those references. Taylor Decl. Ex. 10 at 3, 17-18. Rambuss request for rehearing is pending before the Board. Wu Decl. Ex. M (Bibliographic Data, Reexamination No. 95/001,152, updated Nov. 14, 2012). If rehearing is denied, Rambus can appeal to the Federal Circuit. 35 U.S.C. 315 (2011). Claim 32 of the 020 patent: This claim has been confirmed in two separate reexamination proceedings. First, Hynix requested ex parte reexamination of this claim in May 2010, reexamination No. 90/010,993, during the pendency of the Federal Circuit appeal in this case. See Taylor Decl. Ex. 43 (Notice of Intent to Issue Ex Parte Reexamination Certificate, Sept. 7, 2010). The PTO confirmed that the claim is valid over the Bennett and Inagaki references. See id. at 7; see also Taylor Decl. 118. The reexamination certificate issued on November 30, 2010. Wu Decl. Ex. N. Second, this claim was subject to merged inter partes reexamination proceedings, Nos. 95/001,026 and 95/001,128, which Micron and Samsung filed in 2008. See Wu Decl. Ex. O (Decision, Sua Sponte, to Merge Reexamination Proceedings, Jul. 21, 2009) (020 patent) at 2. In February 2010, Samsung filed a notice of non-participation in these merged proceedings. Wu Decl. Ex. H. In these proceedings, the PTO examiner confirmed this claims validity over prior art references iAPX, Inagaki, and iRAM. Wu Decl. Ex. P (Right of
5
In each of the merged inter partes reexaminations regarding claims-in-suit, Rambus objected to the decision to merge proceedings.
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Appeal Notice, June 11, 2010) at 2, 62-64. iAPX and Inagaki is the same combination that Hynix now claims renders this claim invalid. Taylor Decl. 62-63. Micron did not appeal the confirmation of this claim. Taylor Decl. 62. Claim 36 of the 020 patent: The PTO examiner also confirmed this claim over iAPX and Inagaki, in the merged 026 and 128 reexaminations filed by Micron and Samsung regarding the 020 patent. Wu Decl. Ex. P at 2, 54-55. Hynix now also asserts iAPX and Inagaki against this claim. Taylor Decl. 74. Micron has appealed the confirmation of this claim to the Board. Taylor Decl. 73. No decision has issued. Claim 9 of the 916 patent: Hynix and its allies have failed to invalidate this claim in two separate reexamination proceedings. First, in ex parte reexamination No. 90/010,924, which Hynix filed in May 2010, the PTO denied the reexamination request and found that Hynix failed to raise a substantial new question of patentability with respect to, among other prior art, the Bennett reference. Taylor Decl. 119; see also Taylor Decl. Ex. 44 (Decision Denying Ex parte Reexamination, June 21, 2010). Second, in the merged inter partes reexaminations Nos. 95/000,166 and 95/001,122, filed by Samsung in August 2007 and merged by the PTO with another request by Micron, see Wu Decl. Ex. Q (Decision, Sua Sponte, to Merge Reexamination Proceedings, Mar. 9, 2009) (916 patent) at 2, the PTO examiner confirmed the validity of this claim over numerous references. See Taylor Decl. Ex. 45 (Right of Appeal Notice, Aug. 6, 2010), at 125-127, 129, 131-32. Samsung filed a notice of non-participation for these merged proceedings in February 2010. Wu Decl. Ex. F. The inter partes reexamination certificate has not issued because Micron appealed the confirmations of claims 26 and 28 of this patent to the Board, which rejected those claims, see Taylor Decl. Ex. 14 (Decision on Appeal, June 14, 2012), and rehearing proceedings with respect to those two claims remain pending before the Board. See Wu Decl. Ex. R (Bibliographic Data, Reexamination No. 95/001,122, updated Aug. 17, 2012). But the confirmation of claim 9 is not at issue in that pending rehearing. Cf. Taylor Decl. Ex. 14 (discussing only claims 26 and 28). Claim 28 of the 916 patent: Hynix did not request reexamination of this claim. In merged inter partes reexaminations 166 and 122 filed by Micron and Samsung, the PTO
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examiner had confirmed claim 28s validity over Bennett, Taylor Decl. Ex. 45 at 130, but the Board then reversed and rejected this claim, Taylor Decl. Ex. 14. As noted, Rambuss petition for rehearing is pending before the Board. If the Board does not grant rehearing, Rambus will have the option of appealing to the Federal Circuit. See 35 U.S.C. 315 (2011). Claim 40 of the 916 patent: Hynix and its allies have failed to invalidate this claim in separate proceedings. In ex parte reexamination 924, the PTO denied Hynixs request to reconsider this claims validity in light of Bennett, just as it did for claim 9 of the same patent. Taylor Decl. 119; Taylor Decl. Ex. 44 at 14-15. In inter partes reexamination 166 and 122, the PTO examiner confirmed this claim over iAPX in view of Lofgren. Taylor Decl. Ex. 45 at 128. Bennett, iAPX, and Lofgren are the same references Hynix now seeks to assert against this claim. SJ Mot. at 21. Claim 40 is not at issue in the ongoing Board proceeding regarding claim 28. Claim 16 of the 863 patent: In merged inter partes reexamination Nos. 95/000,250 and 95/001,124 requested by Samsung and Micron, the first of which was filed in June 2007, see Wu Decl. Ex. S (Decision, Sua Sponte, to Merge Reexamination Proceedings, Mar. 6, 2009) (863 patent) at 2, the PTO examiner found claim 16 anticipated by iAPX. In February 2010, Samsung filed a notice of non-participation. See Wu Decl. Ex. G. Recently, the Board affirmed the rejection of claim 16. Supp. Brown Decl. in Support of Hynix Mots., Nov. 2, 2012, Ex. 46 (PTAB Decision of Oct. 23, 2012). Rambus has requested rehearing before the Board. Wu Decl. Ex. DD (Electronic Acknowledgment Receipts, Nov. 20, 2012, for Requests for Rehearing). If that is denied, the rejection will be subject to appeal to the Federal Circuit. A reexamination certificate will not issue until all appeals are exhausted. Claim 34 of the 105 patent: As Hynixs expert acknowledged, this claim was confirmed by the examiner in the course of each of three ex parte reexaminations filed by Hynix. Taylor Decl. 113. Hynix filed the first of these reexamination requests in February 2009, on the eve of entry of final judgment in this case. The PTO confirmed the claim and issued a reexamination certificate. See Wu Decl. Ex. T (Notice of Intent to Issue Ex parte Reexamination Certificate, Mar. 24, 2010); Wu Decl. Ex. U (Reexamination Certificate, June 29, 2010). Hynix also subsequently filed two additional reexamination requests, the first of which was denied
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outright by the PTO (Taylor Del. 113), and the last resulted in a reexamination certificate confirming the claim. Taylor Decl. Ex. 40 (Notice of Intent to Issue Ex parte Reexamination Certificate, Sept. 7, 2010); Wu Decl. Ex. V (Reexamination Certificate, Dec. 7, 2010). III. Hynix Relies On Reexamination Of Claims Not Tried In This Case In addition to the interim Board decisions rejecting three claims, Hynix also asserts preclusion on the basis of reexaminations involving claims that are not at issue in this case. Claims 10, 14, 22, 23 of Patent No. 6,182,184: This inter partes reexamination was filed by Samsung in August 2007, and it was later merged with a similar request Micron filed on November 17, 2008. See Wu Decl. Ex. W (Decision, Sua Sponte, to Merge Reexamination Proceedings, Mar. 6, 2009) (184 patent). Samsung filed a notice of non-participation in February 2010. Wu Decl. Ex. X. The examiner rejected claims 1-23 of the 184 patent, and confirmed claims 24-29. See Taylor Decl. Ex. 16 (Decision on Appeal, Jan. 19, 2012), at 2. The Board affirmed the rejection of claims 1-23. Id. The Board has denied rehearing and Rambus did not appeal the decision to the Federal Circuit. None of the claims from the 184 patent was tried here. Claim 26 of the 916 Patent: Although three other claims of this patentclaims 9, 28, and 40were tried here, claim 26 was not. In the same inter partes reexamination decision that rejected claim 28, the Board also rejected claim 26. Taylor Decl. Ex. 14. As noted above, the PTO confirmed claims 9 and 40, decisions which have not been appealed, and the reexamination of claims 26 and 28 remain pending.6 Claim 4 the 120 Patent: In the same inter partes reexamination decision that rejected claim 33 of the 120 patent, the Board also rejected claim 4, but claim 4 was not tried in this case. Taylor Decl. Ex. 10 at 2. As noted, Rambuss petition for rehearing remains pending
6
Hynix also cited inter partes reexaminations involving Patent No. 6,546,446, claims 1 and 2, and Patent No. 6,584,037, claim 34. SJ Mo. at 20-21. However, Hynixs expert did not opine that these claims are identical to the tried claims for purposes of collateral estoppel. See Taylor Decl. 89, 94, 99, 100. In any event, the reexaminations involving the 446 and 037 patents remain pending. See Wu Decl. Ex. Y (Bibliographic Data, Reexamination No. 95/001,154, updated Oct. 17, 2012, and Docket Excerpt) (037 patent) (appeal pending); id. Ex. Z (Bibliographic Data Reexamination No. 95/001,109, updated Sept. 26 2012, and Docket Excerpt) (446 patent) (rehearing pending).
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before the Board. ARGUMENT I. Summary Judgment Must Be Denied A. The Mandate Rule Bars Reconsideration Of Patent Validity As a threshold matter, Hynix cannot overcome the mandate rule to re-open the patent validity issues that have been finally resolved by this Court and affirmed by the Federal Circuit. Unless remanded by this court, all issues within the scope of the appealed judgment are deemed incorporated within the mandate and thus are precluded from further adjudication. Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1383 (Fed. Cir. 1999) (emphasis added); see also Amado v. Microsoft Corp., 517 F.3d 1353, 1360 (Fed.Cir. 2008) ([t]he mandate rule precludes reconsideration of any issue within the scope of the judgment appealed from not merely those issues actually raised .). The mandate rule promotes predictability and finality by notifying parties of the matters that remain open on remand and committing the rest to final resolution, safeguards stability in the administration of justice, and preserves the proper allocation of authority in the tiered federal court structure . United States v. Kennedy, 682 F.3d 244, 253 (3d Cir. 2012); see also In re Sanford Fork & Tool Co., 160 U.S. 247, 255 (1895) (a court cannot vary [the mandate], or examine it for any purpose other than execution; or give any other or further relief; or review it, even for apparent error, upon any matter decided on appeal; or intermeddle with it, further than to settle so much as has been remanded); United States v. Thrasher, 483 F.3d 977, 981-82 (9th Cir. 2007). The Federal Circuit has affirmed the Courts determination of no invalidity, and only remanded for reconsideration of the spoliation issue . Hynix I, 645 F.3d at 1355. That limited remand precludes Hynix from revisiting the patent validity issues it already litigated and lost. See Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1355-57 (Fed. Cir. 2009) (reversing, as barred by mandate, summary judgment of invalidity entered on remand, where the Federal Circuit remanded only infringement and damages issues); Amado, 517 F.3d at 1360 (where injunction has been affirmed on appeal, the mandate rule would prevent the district court from dissolving the injunction ab initio, though the court could modify prospective relief).
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It would be inconsistent with the Federal Circuits mandate to now hold the patents invalid after it has affirmed the Courts determination of no invalidity. Relying on Mendenhall v. Barber-Greene Co., 26 F.3d 1573 (Fed. Cir. 1994), Hynix argues that the interlocutory Board decisions it has cited constitute exceptional circumstances that justify sidestepping the mandate. Cf. SJ Mot. at 8. But this case is a far cry from Mendenhall. There, the Federal Circuit applied collateral estoppel on the basis of a district court invalidity judgment that involved the same patent claims as the case in which estoppel was invoked, and the invalidity judgment had itself been affirmed by the Federal Circuit on appeal. Mendenhall, 26 F.3d at 1583 (the invalidity judgment , as affirmed by this court, presents an exceptional circumstance). Here, the non-final decisions upon which Hynix relies rejected only three of the ten tried claims; the other seven claims have been confirmed by the PTO examiner in reexamination. For those seven claims, Hynix essentially argues that the Court should undo the Federal Circuits mandate because the Board has rejected other claims, but Hynix offers no authority holding the Boards rejection of different claims should justify that drastic course. And even with respect to the three rejected claims, the reexaminations remain pending and subject to Board rehearing and Federal Circuit review.7 It makes little sense to undo a Federal Circuit mandate affirming this Courts finding of no invalidity on the basis of interlocutory decisions that the Federal Circuit has not even reviewed. There is thus neither clear error nor manifest injustice in adhering to the Federal Circuits mandatewhich issued in litigation Hynix initiated at a time and place of its choosingwhen the reexamination decisions cited by Hynix are either interlocutory or involve patent claims that are not even at issue in this case. Cf. Mendenhall, 26 F.3d at 1582; Yankee Atomic Elec. Co. v. United States, 679 F.3d 1354, 1361 (Fed. Cir. 2012) (requiring manifest injustice for departure from mandate). B. None Of The Claims Has Been Cancelled To invoke statutory cancellation as a basis for summary judgment, Hynix must
7
The only reexamination ruling asserted by Hynix for which appeals have been exhausted is the ruling involving the 184 patent, but that patent was not tried here.
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show that the PTO has actually issued certificates cancelling all ten infringed claims. See SJ Mot. at 9 (acknowledging that [w]here reexamination determines claims in an issued patent to be unpatentable, the PTO Director issues a certificate cancelling those claims.). But the PTO has not done so for any claim at issue, and is in no position to issue such certificates. The PTO examiner has confirmed seven of the ten claims, including one confirmed by certificate and five others confirmed in decisions not subject to appeal. As for the three tried claims rejected by Board decisions, no certificates will issue until after the exhaustion of all appeals, including to the Federal Circuit. See 35 U.S.C. 316(a) (2011) (when the time for appeal has expired or any appeal proceeding has terminated, the Director shall issue and publish a certificate .). Even assuming that cancellation certificates for the three claims ultimately issue, Hynix will remain an adjudicated infringer of seven claims. Statutory cancellation, therefore, cannot support a summary judgment that terminates Hynixs liability to Rambus. The cases on statutory cancellation cited by Hynix are completely inapposite, because each involves situations where all claims in suit have been rejected in reexamination after the exhaustion of all appeals. See Translogic Tech., Inc. v. Hitachi, Ltd., 250 Fed. Appx 988, 2007 WL 2973955 (Oct. 12, 2007) (non-precedential) (vacating judgment of infringement after affirming PTOs rejection of all infringed claims);8 Flexiteek Americas, Inc. v. Plasteak, Inc., Report and Recommendation, No. 08-60996-CIV-COHN/SELTZER (S.D. Fla. Sept. 10, 2012) (recommending relief from judgment after PTO issued reexamination certificate cancelling the sole claim-in-suit); cf. Standard Havens Prods., Inc. v. Gencor Indus., Inc., No. 93-1208, 1993 WL 172432 (Fed. Cir. May 21, 1993) (Standard Havens III) (non-precedential) (stating that injunction would become inoperative if reexamination rejection is upheld by court).9 Moreover, caution is warranted in considering any suggestion that an administrative reexamination by an executive agency could compel changes to the Federal Circuits mandate, because that would render the judicial decision a mere advisory opinion and In In re Translogic Tech., Inc., 504 F.3d 1249 (Fed. Cir. 2007), the Federal Circuit affirmed the PTOs rejection of those same claims. 9 In the Standard Havens litigation, the PTO had rejected in reexamination all claims of the sole parent at issue in Standard Havens III. See Standard Havens Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360, 1366 (Fed. Cir. 1991) (Standard Havens II).
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contravene the separation of powers. See Plaut v. Spendthrift Farms, Inc., 514 U.S. 211, 218 (1995) (Congress cannot vest review of the decisions of Article III courts in officials of the Executive Branch); Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 113-14 (1948) (similar). While the precise effect of a PTO reexamination on a court decision, if any, has not been settled by the Federal Circuit,10 the PTO recently acknowledged that [i]f a federal court awards relief to a patent holder against an infringer, a subsequent reexamination decision that the patent is invalid does not disturb the judgment of the court or alter its binding effect on the parties. Response of Appellee Director of the U.S. PTO Opposing Rehearing and Rehearing En Banc at 14, In re Baxter Intl Inc., No. 2011-1073, 2012 WL 4667630 (Fed. Cir. Sept. 10, 2012), at *14; see also generally In re Baxter Intl, Inc., -- F.3d --, 2012 WL 5275335, at *1 (Fed. Cir. Oct. 26, 2012) (OMalley, J., concurring); id. at *2-*4 (Newman, J., dissenting). C. Collateral Estoppel Must Be Denied Unable to show statutory cancellation of any claim, Hynix seeks summary judgment of invalidity on the basis of collateral estoppel, but that fails also. 1. The Different Legal Standards In Reexamination And Civil Actions Defeat Preclusion
It is axiomatic that preclusion does not apply where, as here, the decision asserted as the basis of estoppel applied a less strict legal standard than the case in which the estoppel is invoked. See, e.g., Clark v. Bear Stearns & Co., 966 F.2d 1318, 1322 (9th Cir. 1992) (collateral estoppel does not preclude claims that have a different burden of proof than previously decided claims); Littlejohn v. United States, 321 F.3d 915, 924 (9th Cir. 2003) (differences in the burden of proof prevent issue preclusion); 18 Wright & Miller, Federal Practice & Procedure 4422 (2d ed. 2012) (issue preclusion may be defeated by shifts in the burden of persuasion or changes in the degree of persuasion required); Restatement (Second) of Judgments 28(4) (similar). In PTO examinations and reexaminations, the standard of proofa preponderance of
10
Translogic and Standard Heavens III, cited by Hynix, are non-precedential decisions. However, in In re Swanson, 540 F.3d 1368, 1380 n.5 (Fed. Cir. 2008), the Federal Circuit noted that an attempt to reopen a final federal court judgment of infringement on the basis of a reexamination finding of invalidity might raise constitutional problems.
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evidenceis substantially lower than in a civil case, In re Swanson, 540 F.3d at 1377; see also In re Caveney, 761 F.2d 671, 674 (Fed. Cir. 1985) (preponderance of the evidence is the standard that must be met by the PTO in making rejections). In this civil action, Hynix must prove invalidity by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. Pship, 131 S. Ct. 2238, 2242 (2011); see also 35 U.S.C. 282. The fact that the Board has, in interlocutory decisions, found certain claims unpatentable by a preponderance of the evidence does not establish that Hynix has met the much heavier burden of proving them invalid by clear-and-convincing evidence. See 18 Wright & Miller, Federal Practice & Procedure 4422 (a party who has carried the burden of establishing an issue by a preponderance of the evidence is not entitled to assert preclusion in a later action that requires proof of the same issue by a higher standard); Dias v. Elique, 436 F.3d 1125, 112930 (9th Cir. 2006) (denying preclusive effect to administrative decision that applied a substantial evidence standard because the subsequent court action requires proof by a preponderance of the evidence); Jim Beam Brands Co. v. Beamish & Crawford Ltd., 937 F.2d 729, 734-36 (2d Cir. 1991) (denying preclusion to PTO trademark decision involving legal standard different from court proceeding); see also One Lot Emerald Cut Stones & One Ring v. United States, 409 U.S. 232, 234 (1972) (the difference in the burden of proof in criminal and civil cases precludes the application of the doctrine of collateral estoppel). Conversely, for the same reason, a court determination of no invalidity does not bind the PTO. MPEP 2686.04 (Since the clear and convincing standard is harder to satisfy than the preponderance standard, a courts holding of patent validity is not controlling on the PTO). Hynixs sole argument regarding the difference in legal standards is, in essence, that its clear-and-convincing burden is inequitable because of the pending reexaminations. SJ Mot. at 15 -16. That is foreclosed by the plain text of 35 U.S.C. 282, which provides that each patent claim shall be presumed valid. This presumption, and the clear-and-convincing standard that flows from it, is a statutory command that governs in all patent infringement actions. See i4i, 131 S. Ct. at 2249-52. As the Supreme Court recently explained, [n]othing in 282s text suggests that Congress meant to enact a standard of proof that would rise and fall with the
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facts of each case. Id. at 2250; see also id. at 2249 (relevant precedents do not indicate, even in dicta, that anything less than a clear-and-convincing standard would ever apply to an invalidity defense raised in an infringement action) (emphasis added). The clear-and-convincing standard applies, for example, irrespective of whether the allegedly invalidating prior art reference was considered by the PTO during examination. Id. at 2249-52. Regardless of what occurs in PTO proceedings, Hynix cannot alter section 282s requirement that it prove invalidity by clear and convincing evidence. The difference between that heightened standard and the more lenient preponderance standard operative in reexamination proceedings necessarily defeats preclusion for all ten claims. See, e.g., Dias, 436 F.3d at 1129-30. Hynixs principal authority on this score, Flexiteek, is beside the point because it did not apply collateral estoppel at all; rather, it involved granting Rule 60(b) relief from judgment based on statutory cancellation of a patent claim. Cf. SJ Mot. 16. Hynix fares no better with authorities that applied collateral estoppel based on a prior court decision, see, e.g., Mendenhall, 26 F.3d 1573, because civil actions are uniformly governed by the clear-andconvincing standard of section 282. The cases Hynix cites applying estoppel on the basis of Board decisions are equally unavailing. Virtually all of them involve PTO interference proceedings,11 in which the challenger had failed to meet the lower standard of proof in the interference proceeding, and was therefore precluded in a subsequent court action imposing the higher clear-and-convincing burden of proof for invalidity. See Coakwell v. United States, 292 F.2d 918, 920-921 (Ct. Cl. 1961) (applying preclusion against party that filed later application and failed to prove priority of invention in interference proceeding); Meritor Transmission Corp. v. Eaton Corp., No. 1:04CV178, 2006 WL 3951711 (W.D.N.C. Sept. 26, 2006) (similar). Here, that the Board may have met a preponderance burden of proof does not establish that Hynix has met the higher clear-and-convincing burden mandated by section 282. The sole reexamination estoppel case cited by Hynix, Tan v. Integrated Silicon Solutions, Inc., No. C07-06166 WHA, 2008 WL 2340217 (N.D. Cal. June 5, 2008), did not consider the difference in legal standards
11
In an interference proceeding, the party challenging the first-filed patent application bears the burden of proof by a preponderance of the evidence, Bosies v. Benedict, 27 F.3d 539, 542-43 (Fed. Cir. 1994). - 18 RAMBUSS OPP. TO HYNIXS MOT. FOR SUMMARY JUDGMENT, ETC. CASE NO. 00-20905-RMW
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between reexamination and civil actions, and thus provides no reasoned basis to negate the settled principle that differences in legal standards defeat preclusion. See, e.g., Restatement (Second) of Judgments 28(4). That principle suffices, without more, to defeat collateral estoppel, and the Court need not look further to deny Hynix summary judgment. 2. Reexamination Results For The Tried Claims Are Not Final
Moreover, the reexamination results Hynix citedexcept for the reexamination of the 184 patent, which was not tried hereare not final. All of the decisions Hynix offers as the basis for estoppel arise from inter partes reexaminations. These decisions do not satisfy the finaljudgment requirement for estoppel, because Congress has specifically mandated that an inter partes reexamination decision can have preclusive effect only after the conclusion of the reexamination proceeding, including the exhaustion of all appeals to the Federal Circuit. Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 642-48 (Fed. Cir. 2011); 35 U.S.C. 315 & 317 (2011).12 The inter partes reexamination scheme is designed to prevent a reexamination requester from getting two bites at the invalidity apple; an inter partes reexamination and a district court lawsuit can proceed in parallel, but a final decision in one proceeding precludes pending litigation on the same issues by the reexamination requester in the other proceeding. See 35 U.S.C. 315, 317 (2011). Once an inter partes reexamination is final, the requester 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) (2011) (emphasis added). As the Federal Circuit held, under section 315(c) estoppel [of a district court case] requires exhaustion of all appeals rights, including appeals to this court, in the inter partes reexamination proceeding. Bettcher, 661 F.3d at 644.13 This construction flows from the As noted above, the pre-AIA version of 35 U.S.C. 311-18 governs the inter partes reexaminations relevant here. Supra at 7-8 & n.4. 13 Section 315(c) is paralleled by 35 U.S.C. 317(b) (2011), which allows a final decision in a civil action to preclude an inter partes reexamination by the party that lost in court. By using the term final decision, the Federal Circuit held, Congress intended that the section applies after
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structure of the statute and the placement of section 315(c) in a provision that otherwise addressed appeals. See id. Moreover, the structure of the reexamination proceedings suggests that reexamination is not final prior to the exhaustion of all appeals rights. Id. at 647 (discussing reexamination procedure); see also 37 C.F.R. 41.77(b) (providing that a Board decision reversing the examiners decision to confirm constitutes a new ground of rejection and shall not be considered final for judicial review). And unlike district court proceedings that result in an enforceable judgment before appeal, an inter partes reexamination certificate issues only upon the completion of appeals. See 35 U.S.C. 316(a) (2011); see also Bettcher, 661 F.3d at 645 ( 316 defines a determination of patentability to occur only after all appeals have terminated). Until then, an inter partes reexamination is not final and cannot have preclusive effect. Bettcher, 661 F.3d at 642-48. While Hynix is not a requester in the inter partes reexaminations it now invokes, section 315(c) reflects Congressional intent that an inter partes reexamination not be treated as final for preclusion purposes until the exhaustion of all appeals. It would be beyond strange for a reexamination decision to be non-final, for preclusion purposes, with respect to the requester that actually participated in the reexamination, but final with respect to another party. Tellingly, Hynix has failed to cite a single case applying preclusion to an inter partes reexamination decision prior to the exhaustion of all appeals. Hynixs reliance on Mendenhall is unavailing, because the case did not involve an inter partes reexamination and in any event applied preclusion only on the basis of a Federal Circuit determination of invalidity. See Mendenhall, 26 F.3d at 1583. Tan, 2008 WL 2340217, involved an ex parte reexamination, not an inter partes reexamination. Cf. In re Peng Tan, No. 2008-1421, 2008 WL 4972985 (Fed. Cir. Oct. 29, 2008) (ex parte reexamination appeal of same claim as Tan). Tan thus had no reason to consider finality in the context of the statutory inter partes scheme.14 Other authorities cited by Hynix are equally inapposite. See e.g., Lummus Co. v. Commonwealth Oil Refining Co., 297 F.2d 80 (2d any appeals, Bettcher, 661 F.3d at 646 (citation omitted). 14 Even for an ex parte reexamination, the Federal Circuit has held that the Boards reexamination decision rejecting the subject claims is subject to judicial review, and therefore is not a final adjudication of the matter. Standard Havens II, 953 F.2d at 1366 n.2 (declining to stay appeal pending reexamination).
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Cir. 1961) (analyzing finality of court decision); Abbott GMBH & Co., KG v. Centocor Ortho Biotech, Inc., No. 09-11340-FDS, 2012 WL 1593182 (D. Mass. May 4, 2012) (interference proceeding); Meritor, 2006 WL 3951711 (same). Since finality is an essential element of preclusion, Reynoso, 477 F.3d at 1122, the lack of final reexamination determinations alone forecloses Hynixs estoppel bid based on the reexamination of any claim tried here. 3. Validity Issues Are Not Identical Between The Seven Confirmed Claims And The Other Claims Considered By The Board
For the seven claims confirmed in reexamination, the decisions Hynix now asserts do not even involve the same claims as those Hynix was found to infringe, and Hynixs failure to establish identicality across claims provides yet another ground to deny estoppel. It is settled that each claim must be considered as defining a separate invention. Jones v. Hardy, 727 F.2d 1524, 1528 (Fed. Cir. 1984). Each claim contains different terms and limitations, and raised different validity issues. Even putting the difference in burden and lack of finality of the Board decisions to one side, to establish preclusion, Hynix must show that the differences do not lend[] patentable significance to the [tried claim], thereby altering the issues bearing on obviousness determination. Ohio Willow Wood Co. v. ALPS South, LLC, No. 2:04-cv-1223, 2012 WL 2196083, at *10 (S.D. Ohio June 15, 2012). Hynix failed to make this showing. The seven confirmed claims are substantively different from the related claims asserted by Hynix, and some of those differenceswhich are, for each of the seven claims, far from exhaustiveare discussed below. a. 918 patent, claim 24
Hynixs expert Mr. Taylor asserts that this claims invalidity is established by the Boards rejection of claim 26 of the 916 patent as anticipated by Bennett. Claim 24 of the 918 patent requires that the synchronous memory device of the claim receive both first block size information and a first read request from a single bus controller. Taylor Decl., 43. In Bennett, by contrast, the parameters stored in the configuration register are sent to the memory by a maintenance processor, id. 42, 45, while the alleged read commands are sent by master processors separate from the maintenance processor, id. 45-46. Mr. Taylor argues that the
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combination of the maintenance processor and one of the master processors in Bennett should be considered the bus controller of claim 24. Id. 47. But the Board did not even consider the issue of whether the two processors identified by Mr. Taylor in Bennett could together constitute the bus controller of claim 24. In any event, Bennett makes clear that that they could not because, as Mr. Taylor ignores, the maintenance processor is not connected to Bennetts Versatile Bus that carried control signals such as the alleged read commands; it instead sends configuration information over a different bus, the VM Bus. See Taylor Decl., Ex. 31 (Bennett), Fig. 4 (showing Maintenance Processor connected to VM Bus separate from Versatile Bus); id. col. 83:67 - col. 84:1 ([t]he reader may be reminded that configuration parameterization will not transpire through or on the Versatile Bus). Mr. Taylor fails to explain how different processors that send their signals on different buses could together be considered one bus controller. b. 918 patent, claim 33
Contrary to Hynixs contention, this claim is not identical to claim 4 of the 120 patent, nor identical to claim 22 of the 184 patent. See Taylor Decl. 54. As Mr. Taylor acknowledges, claim 33 includes the term read request, which is a narrower term than the (read) operation code considered by the Board. Id. 58. In this case, Rambus and Hynix agreed, consistent with the Federal Circuits decision in Infineon, that a read request is a series of bits used to request a read of data from a memory device where the request identifies what type of read to perform. Id. 48. See also Rambus Inc. v. Infineon Techs. AG, 318 F.3d 1081, 1093 (Fed. Cir. 2003). Mr. Taylor argues that iAPX identifies the type of read to perform, because it distinguishes a read request and an RMW [read-modify-write] read request. Id. 58. But this is contradicted by the positions that Hynix and Mr. Taylor took in this litigation. In opposing summary judgment of infringement, Hynix, supported by Mr. Taylor, argued that there were only two potential types of reads that would satisfy the construction of read request: page mode reads and normal mode reads. Hynixs Oppn to Rambuss Mot. for Summ. J. of Infringement, Feb. 11, 2004, at 10 (D.E. 383). Hynix argued that the read and read with autoprecharge commands in the accused products, which are distinguished by the
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state of the A10 bit, are not different types of reads. Id. Even though the patent specification describes a bit in the AccessType field that determines whether the memory device is to be precharged, the Court held that there was a triable issue of fact as to whether read and read with autoprecharge were two different types of reads. Clarified and Corrected Order on Rambuss Motion for Summary Judgment of Infringement, Jan. 25, 2005, at 5-7 (D.E. 706). It follows a fortiori that since an RMW read request does not even appear in the patent specification, there is at least a triable issue as to whether it constitutes a type of read. c. 020 patent, claims 32
Mr. Taylor argues that claim 32 the 020 patent is invalid based on the Boards rejections of claim 4 of the 120 patent and claim 14 of the 184 patent. Taylor Decl. 63. But claim 32 of the 020 patent is directed to an integrated circuit device. In contrast, claim 4 of the 120 patent and claim 14 of the 184 patent are directed to a synchronous memory device and a memory device, respectively. Id. 64. The Board opinions for these two claims found that the multiple chips constituting the memory module of iAPX together were a memory device within the meaning of Rambuss claims. Id., Ex. 10 at 6-11; Ex. 16 at 12-30. But the term integrated circuit device is entirely different; it has been construed by both the Federal Circuit and this Court as a circuit constructed on a single monolithic substrate, commonly called a chip. Claim Construction Order, Nov. 15, 2004, at 9-11 (D.E. 621) (emphasis added). Clearly, the memory module of iAPX on which the Boards rejections rely is not an integrated circuit device as required by claim 32 of the 020 patent. d. 020 patent, claim 36
Hynixs identicality contention for this claim fails for the same reason as it did for claim 32 of the same patent. Claim 36, like claim 32, is directed to an integrated circuit device. Hynix, again, relies on Board decisions regarding memory device and synchronous memory device, Taylor Decl., 74 & Exs. 10, 16, which presented invalidity issues different from those regarding an integrated circuit device. e. 916 patent, claim 9
Mr. Taylor compares claim 9 of the 916 patent to claim 26 of the 916 patent,
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which the Board found was anticipated by Bennett, and claim 33 of the 120 patent, which the Board found was obvious over the combination of Bennett and Wiklund, Olson, or Bowater. Taylor Decl., 85. Claim 9 of the 916 patent requires responding to an operation code that includes precharge information. Id. 86. Mr. Taylor relies on the Board rejection of claim 33 of the 120 patent that also includes a precharge information limitation. Id. 93. That rejection, however, has no relevance here because it was based on an understanding of precharge information at odds with the Courts construction of the term. Specifically, the Board understood precharge information to constitute[] non functional descriptive material . . .[that] does not require the memory device to precharge, decide to precharge, or even have the ability to do either, based on that information. Id., Ex. 10 at 21. But here the Court, following Hynixs proposed construction, construed precharge information as information denoting whether the sense amplifiers and/or bit lines (or a portion of the sense amplifiers and/or bit lines) should be precharged. Claim Construction Order, Nov. 15, 2004, at 21-23 (D.E. 621). Thus, contrary to the understanding on which the Boards rejection was based, precharge information does require the memory device to decide to precharge . . . based on that information. f. 916 patent, claim 40
With respect to claim 40 of the 916 patent, Mr. Taylor notes that claim 26 of the 916 patent, from which claim 40 depends, was rejected by the Board as anticipated by Bennett. Taylor Decl., 96. Mr. Taylor compares the additional limitations in claim 40 to claim 22 of the 184 patent which the Board found was obvious over the combination of iAPX and Lofgren. Id. 97. Thus, with respect to claim 40 of the 916 patent, Mr. Taylor relies on a combination of Bennett, iAPX, and Lofgren. But the Board never found that it was obvious to combine all three of these references and it follows that the Boards rejections cannot be extended to claim 40. g. 105 patent, claim 34
Mr. Taylor claims that claim 34 of the 105 patent is invalid in view of the combination of iAPX, Inagaki, and Lofgren, based on the Boards rejection of claims 22 and 23 of the 184 patent. Taylor Decl., 27. The Board found claim 22 of the 184 patent obvious over the combination of iAPX and Lofgren, and claim 23 of the 184 patent obvious over the
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combination of iAPX and Inagaki. Id. The cited Board ruling did not find that it would have been obvious to combine the teachings of iAPX and Lofgren and Inagaki, and the obviousness of the combination of all three references does not follow from the Boards decisions combining iAPX with each of Lofgren and Inagaki individually. It might be obvious to combine a chair with wheels to obtain a rolling chair or to combine a chair with rockers to obtain a rocking chair, but those combinations do not make it obvious to combine a chair with both wheels and rockers. Moreover, as Mr. Taylor concedes, the claims of the 184 patent require the generation of a single internal clock signal using a delay locked loop circuit, while claim 34 of the 105 patent requires that first and second internal clock signals be generated. Taylor Decl., 28. Mr. Taylor asserts that this difference is not significant because Lofgren discloses that, using its disclosed delay locked loop, several internal delayed clocks with different delays can be generated from delay line 18 for application to subsequent logic circuitry. Taylor Decl., 34 (citing Lofgren, Figure 5 and page 6. lines 13-18). Mr. Taylor is contradicted by Lofgren itself: Figure 5 does not show several internal delayed clocks but, rather, delayed versions of a data signal. Taylor Decl., Ex. 33 (Lofgren), Fig. 5 and p. 6, lines 2-6. (A data signal is applied to the delay line 18 via a buffer inverter 142, and the outputs of the various blocks of the line 18 may be employed to provide signals of different desired delays.) (emphasis added). Lofgren does not disclose the generation of first and second internal clocks.15 4. The Court Should Exercise Its Discretion To Deny Estoppel
Even aside from Hynixs failure to satisfy the mandatory estoppel elements of identical legal standards, finality, and identical issues, the Court also has broad discretion in determining whether to apply non-mutual collateral estoppel. See Findings of Fact and Conclusions of Law on Spoliation and the Unclean Hands Defense, Sept. 21, 2012 (9/21/12 Order), at 45-46 (D.E. 4160); see also id. at 46 (finding that discretion is further triggered because Hynixs use of preclusion is offensive, not defensive). It should exercise that discretion The Boards decision regarding the 863 patent suggests that the combination of Lofgren, Inagaki, and iAPX would render obvious a claim that requires the generation of first and second internal clock signals using a delay locked loop. Supp. Brown Decl. Ex. 46. This decision has not been raised by Hynix in connection with claim 34 of the 105 patent. In any event, Rambus strongly disagrees with the Boards conclusion and has requested rehearing.
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against estoppel here. First, applying estoppel in these circumstances would reward Hynix for its strategy of multiplying litigation by suing in this Court. Under 35 U.S.C. 317(b) (2011), once a final decision has been entered against a party in a civil action that the party has not met its burden of proving the invalidity of any patent claim, then any inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office . Hynix argues that this statutory estoppel does not apply because it is not a party to the inter partes reexaminations at issue, which were initiated by Samsung and Micron (though Samsung is no longer participating). SJ Mot. at 10 n.5. However, that Hynix is even able to make this argument is the fruit of the joint Hynix/Micron strategy of filing coordinated, dual-front court actions against Rambus. CE Order, 2009 WL 292205, at *5. Hynixs choice to sue in this Court, rather than joining the action Micron filed a day earlier, not only ensured separate invalidity trials on two coasts, but also positioned each party to try evading section 317(b). Had Hynix joined Microns suit, that suit would have produced a single patent trial, with the same outcome for those joined plaintiffs. If that trial led to a final determination of no invalidity, then neither Hynix nor Micron could maintain an inter partes reexamination challenge. But by splitting their declaratory judgment claims in separate courts, Hynix and Micron have put themselves in positions where, even if one of them loses in court and is estopped from maintaining an inter partes reexamination, it could still try to assert collateral estoppel if the other prevails in an inter partes reexamination. That is precisely what happened here. Hynix did not join in any of the inter partes reexaminations at issue, no doubt due to the statutory estoppel it would face after the final determination in this case that the claims are not invalid. But thanks to the dual-front litigation strategy, Micron is still able to press forward with inter partes reexaminations, including on claims that Hynix already tried and lost. This is an improper endrun around section 317(b) the Court should not condone. The Supreme Courts fear that improper use of non-mutual issue preclusion will likely increase rather than decrease the total amount of litigation, Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 330 (1979), is particularly magnified here, because Hynixs strategy of
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multiplying litigation contravenes the statutory objectives undergirding inter partes reexamination. Cf. Ganem v. Heckler, 746 F.2d 844, 854 (D.C. Cir. 1984) (discretion must be exercised consistent with the statutory purposes). Congress enacted the inter partes reexamination statute in 1999 with the goal of providing a desirable alternative to litigation in the Federal Court, MPEP 2601, and to reduce expensive patent litigation in U.S. district courts, 145 Cong. Rec. H11804-05, 1999 WL 1015352. To ensure that inter partes reexamination functions as an alternative to court litigation rather than just an additional weapon in the accused infringers arsenal, Congress put in place estoppel provisions to guard against harassment of [the] patent holder. Id.16 But multiplicative and repetitive invalidity challenges are exactly what Hynix and Microns litigation strategy has spawned. Claim 32 of the 020 patent and claims 9 and 40 of the 916 patent, for example, have been found not invalid by this Court, confirmed in ex parte reexamination requested by Hynix, and then confirmed again in inter partes reexaminations. Given section 317(b), repetitive litigation on that scale would not have been possible but for Hynix and Microns strategy of deliberately multiplying litigation. There is no support in law for repeated bites at the apple. Burson v. Carmichael, 731 F.2d 849, 854 (Fed. Cir. 1984). By choosing to litigate its invalidity challenges in this Court, Hynix assumed the risk that the outcome here could be different from other proceedings. Second, [t]he existence of inconsistent prior judgments is perhaps the single most easily identified factor that suggests strongly that neither should be given preclusive effect. CE Order, 2009 WL 292205, at *3 (quoting 18A Wright & Miller, Federal Practice & Procedure 4465.2 (2d ed. 2002)). If the Court determines that the validity issues and legal standards in reexamination are identical to those decided in this caseand they certainly are not identical, as shown abovethen the inconsistency between those decisions independently defeats preclusion. See id. at *3-*4; see also Parklane Hosiery, 439 U.S. at 330 (collateral estoppel may also be Congress recently strengthened the policy against duplicative litigation. The AIA now bars a declaratory judgment plaintiff from initiating a subsequent inter partes challenge. See 35 U.S.C. 315(a) (Sept. 16, 2012) (An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent). And delay is no longer allowed; a party sued for infringement may not initiate an inter partes review if more than one year has passed since it was served with the civil complaint. See 35 U.S.C. 315(b) (Sept. 16, 2012).
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unfair to the defendant if the judgment relied upon as a basis for the estoppel is itself inconsistent with one or more previous judgments in favor of defendants). Even setting aside the Federal Circuits mandate of no invalidity, the PTO has independently confirmed the patentability of seven of the ten claims in reexamination. See supra at 8-12. For example, claim 34 of the 105 patent has been confirmed as patentable in three separate ex parte reexaminations requested by Hynix. Supra at 11-12. Claims 32 and 36 of the 020 patent have each been confirmed as patentable in inter partes reexaminations initiated by Samsung and Micron, with the former further confirmed in an ex parte reexamination . Supra at 9-10. Hynix claims that the validity issues for the seven confirmed claims are identical to the issues decided in reexamination of related claims. SJ Mot. at 4-5, 20-22. Even if that were so, the decisions on the related claims would be directly in conflict with the PTO decisions confirming the patentability of the seven claims. As Hynix acknowledged, confirmations of six of the seven claims are not subject to appeal. New Trial Mot. at 4-5.17 It would be highly unfair, to say the least, to preclude Rambus from disputing the patentability of claims that the Court and the Federal Circuit have held not invalid, and that the PTO has confirmed in reexamination. See CE Order, 2009 WL 292205 at *3-*4. II. Hynixs Alternative New Trial Motion Is Meritless As an alternative to collateral estoppel, Hynix asks this Court to hold a new trial on validity issues that this Court and the Federal Circuit have already and finally resolved. To unwind these proceedings at this late stage would be extraordinarily costly and wasteful. It would also be unjust, for Hynix failed to exercise reasonable diligence in pursuing reexaminations, leaving it to allies to file inter partes reexaminations and waiting to file its own requests until after an adverse judgment in this case was imminent. And, critically, none of it would make any
17
Hynix complains that appeals are not available for these confirmations because they were either ex parte reexaminations by Hynix without the right of appeal, or they were inter partes reexaminations requested by a third party that has elected not to pursue its rights. SJ Mot. at 4-5. But there is a sound policy reason for this result. 35 U.S.C. 317(b) (2011) prevents Hynix itself from maintaining an inter partes reexamination after the Federal Circuits mandate of no invalidity. Thus, far from being a procedural quirk, Hynixs inability to participate in inter partes reexamination flows from Congresss policy against repeated bites at the apple for a party in Hynixs position.
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practical difference to Hynixs liability to Rambus, because the damages award here is based on the royalty rates for infringing products, without distinction among patent claims, and Hynix long ago forfeited any argument for claim-by-claim damages. Because the amount of damages would not change even if a small subset of the tried claims is ultimately cancelled, no new damages trial is warranted. A. The Reexaminations Have No Impact On The Amount Of Damages Or The RAND Rate As discussed above, Hynixs collateral estoppel bid fails as a matter of law, and Hynix cannot show statutory cancellation of any tried claim. In any event, even if certificates of cancellation ultimately issue for three claims, each Hynix SDRAM and DDR device would still infringe other claims found not invalid by this Court (as affirmed by the Federal Circuit), and confirmed by the PTO in reexamination. Since the amount of Hynixs liability is based on rates used in licensing Rambuss entire patent portfolio for use in specific products, rather than rates for each individual patent claim, no new damages trial would be warranted. First, Hynix has forfeited any plea for reduced damages in the event some of the claims are found invalid, because Hynix never made this argument at trial, even though the jury could have returned a verdict invalidating some, but not all, claims. See A-1 Ambulance Service, Inc. v. County of Monterey, 90 F.3d 333, 338 (9th Cir. 1996) (defendant waived the argument by failing to raise it at trial); Baden Sports, Inc. v. Molten USA, Inc., 556 F.3d 1300, 1308 (Fed. Cir. 2009) (similar). The amount of damages awarded was not predicated on the infringement of particular claims; instead, it was predicated on infringement by particular products. Hynix never presented evidence to show how royalties could be determined on a claim-by-claim basis, rather than on the basis of infringing products. Indeed, Hynixs own proposed verdict form asked the jury to determine royalty rates on a product-by-product basis without any differentiation among patent claims. See Joint Pretrial Statement for the Patent Trial, Feb. 2, 2006, Ex. 14 (D.E. 1649). After the verdict, Hynix further cemented its waiver when it moved for a new trial and JMOL on invalidity by presenting claim-specific arguments, but failed to ask the Court to reduce damages or grant a new damages trial in the event the Court found only some claims
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invalid. See Energy Transp. Grp., Inc. v. William Demant Holding A/S, -- F.3d --, 2012 WL 4840813, at *12 (Fed. Cir. 2012) (rejecting argument that damages should be lessened after one of two patents was found not infringed on JMOL motion, because [d]efendant waived this argument by not asking the district court to reduce the damages award in the event it granted their motion for JMOL). Indeed, Hynixs waiver here is stronger than in Energy Transportation, for there the defendant at least presented an alternate sales base to the jury for calculating damages if one of the patents were to be later invalidated. Id. Hynix never did so here. Because Hynix did not argue at trial or on appeal that the calculation of past damages depended on the number of patents infringed, the mandate rule bars re-assessing damages on the basis of the number of infringed claims. See Fresenius U.S.A., Inc. v. Baxter Intl, Inc., No. C 03-1431 PJH, 2011 WL 2160609, at *2 (N.D. Cal. May 26, 2011) (Fresenius III); see also PSKS, Inc. v. Leegin Creative Leather Prods., 615 F.3d 412, 420 (5th Cir. 2010) (the mandate rule precludes litigation of waived issues on remand because they were never raised in district court). Second, the Federal Circuit has squarely held that a royalty award should not be disturbed upon reversal as to a subset of claims, where all the products at issue still infringed other claims, and where the prior damages award was not made on a claim-by-claim basis. See Tivo, Inc. v. Echostar Commcns Corp. 516 F.3d 1290, 1312 (Fed. Cir. 2008) (after reversing infringement as to two of four claims, holding that [b]ecause the damages calculation at trial was not predicated on the infringement of particular claims, and because we have upheld the jurys verdict that all of the accused devices infringe the [other two] claims, we affirm the damages award entered by the district court.); see also Fresenius III, 2011 WL 2160609, at *2-*3 (denying new trial on damages after one of three infringed patents was found invalid on appeal). That would be precisely the situation here if the reexamination proceedings eventually result in the cancellation of the three claims. The authorities relied upon by Hynix are inapposite. Cf. New Trial Mot. at 12-13. In NTP, after reversing infringement with respect to a subset of tried claims, the Federal Circuit merely remanded for the district court to determine the effect of any alteration of the jury verdict on the district courts damages award, because the jury verdict did not specify the
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specific devices and services determined by the jury to infringe each separately asserted claim. NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1326 (Fed. Cir. 2005). In other words, unlike in Tivo and unlike in this case, in NTP it was not clear that all the accused devices still infringed after reversal as to some of the patent claims. And the NTP court did not require any alteration of damages, but only remanded to the district court for further consideration. The Federal Circuit reached a similar result in Verizon Serv. Corp. v. Vonage Holdings Corp., 503 F.3d 1295 (Fed. Cir. 2007). Contrary to Hynixs contention (New Trial Mot. at 12), Verizon did not hold that a new trial on damages was required because it reversed the construction of one of three patents. Rather, the Federal Circuit merely remanded the question of whether to modify damages for consideration by the district court in the first instance, Verizon, 503 F.3d at 1310. Moreover, in Verizon it was unclear whether all the accused devices still infringed after reversal as to one of the patents. Verizon, 503 F.3d at 1307-08 (approving appellants argument that it was prejudiced by the district courts [claim construction] error, because several of its devices would not have been shown to infringe under the correct claim construction). Hynixs reliance on Memphis Community School Dist. v. Stachura, 477 U.S. 299 (1986), is less availing still. There, a new damages trial was required because the jury was instructed to render a single damages award that encompassed distinct species of damages, each of which was subject to separate proof: economic loss, emotional distress, and the abstract value of constitutional rights, the last of which was reversed on appeal. Id. at 302-304, 312-13. That is not the case for the asserted claims in Rambuss patent portfolio. Hynix never presented separate proof for valuing damages on a claim-by-claim basis. Consistent with Hynixs own proposed verdict form and with Hynixs damages presentation at trial, the jury and the Court awarded royalties for each infringed product, without differentiation among patent claims. Third, Hynix is mistaken in arguing that no damages evidence remains in the record in light of the Courts spoliation decision. See New Trial Mot. at 13. As Rambus has explained in its Brief Regarding the Courts Determination of a RAND Rate Pursuant to its September 21, 2012 Order, Nov. 13, 2012 (D.E. 4182), at 3 (quoting Hynix Semiconductor v. Rambus Inc., 609 F. Supp. 2d 951, 969 n.11 (N.D. Cal. 2009)), the conduct trial on the JEDEC
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issues has generated a substantial body of evidence relevant to the particular remedy that the Court choselimiting Rambus to a reasonable, non-discriminatory royalty. See 9/21/12 Order at 64-65 (holding that the appropriate sanction is to strike from the record evidence supporting a royalty in excess of a reasonable, non-discriminatory royalty). B. Hynix Failed To Satisfy The Stringent Requirements For Avoiding The Federal Circuits Mandate Of No Invalidity Hynix seeks a new validity trial under Federal Rule of Civil Procedure 59, arguing that validity should be retried because of newly discovered evidence, in the form of reexamination evidence, and because of erroneous jury instructions, due to the Federal Circuits decision in In re Rambus Inc., 694 F.3d 42. New Trial Mot. 6, 10. But a Rule 59 motion must be brought [n]o later than 28 days after the entry of judgment. Fed. R. Civ. P. 59(b). This Court entered judgment in favor of Rambus more than 3 years ago, and the Federal Circuit affirmed the Courts determination of no invalidity. The district court cannot give relief beyond the scope of that mandate, and may take up only matters left open by the mandate. Laitram Corp. v. NEC Corp., 115 F.3d 947, 951 (Fed. Cir. 1997). The only issue left open here is spoliation. Hynix II, 645 F.3d at 1355. The exceptions to this rule are narrow, requiring a showing of exceptional circumstances such as a substantial change in the evidence. Tronzo v. Biomet, Inc., 236 F.3d 1342, 1349 (Fed. Cir. 2001).18 In particular, Hynix must show that significant new evidence, not earlier obtainable in the exercise of due diligence, has come to light. United States v. Bell, 5 F.3d 64, 67 (4th Cir. 1993). As for Hynixs effort to obtain a new trial on the basis of the claim construction ruling in In re Rambus, Hynix must show that the opinion constitutes an intervening decision that changes the controlling law. Amado, 517 F.3d at 1359; Bell, 5 F.3d at 67 (noting mandate rule exception for showing that controlling legal authority has changed dramatically) (citation omitted). These exceptions for newly discovered evidence and changes
18
Other courts have suggested that a trial court may not properly consider an issue foreclosed by an appellate court mandate based upon newly discovered evidence. E.g., United States v. Fernandez, 506 F.2d 1200, 1203 (2d Cir. 1974) (explaining that the law of the case (as embodied in the Supreme Court mandate rule) prevents the lower court from considering newly discovered evidence) (citation omitted). - 32 RAMBUSS OPP. TO HYNIXS MOT. FOR SUMMARY JUDGMENT, ETC. CASE NO. 00-20905-RMW
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in controlling law are similar to grounds for relief from the judgment under Rule 60(b)(2) (newly discovered evidence) and Rule 60(b)(6). See Phelps v. Alameida, 569 F.3d 1120, 1131-34 (9th Cir. 2009) (explaining that a change in the law may justify relief under Rule 60(b)(6)). Hynix failed to satisfy these requirements. C. Hynix Cannot Show That The Reexamination Decisions Constitute Newly Discovered Evidence Hynix cannot show, as it must, that (1) the evidence relied on in fact constitutes newly discovered evidence within the meaning of Rule 60(b); (2) [it] exercised due diligence to discover this evidence; and (3) the newly discovered evidence [is] of such magnitude that production of it earlier would have been likely to change the disposition of the case. Feature Realty, Inc. v. City of Spokane, 331 F.3d 1082, 1093 (9th Cir. 2003) (Rule 60(b)(2)) (citation omitted). 1. The Reexamination Decisions Are Not Newly Discovered, And Hynix Did Not Pursue Them With Sufficient Diligence
To be newly discovered, the evidence must have existed at the time of the trial. Jones v. Aero/Chem Corp., 921 F.2d 875, 878 (9th Cir. 1990). None of the cited reexamination decisions existed at the time of trial, and therefore could not constitute newly discovered evidence. Hynix is wrong to suggest that Standard Havens I held to the contrary (New Trial Mot. at 6); the passage quoted by Hynix reflected the appellants argument, not the Federal Circuits holding, which was addressed to the propriety of a stay of injunction pending appeal. See Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 515 (Fed. Cir. 1990) (Standard Havens I) (Gencor also asserts that the action by the PTO is newly discovered evidence under Rule 60). In fact, in Standard Havens II, Federal Circuit subsequently rejected an argument that pending reexaminations required a new trial. 953 F.2d at 1372. At most, the reexaminations results here could be treated as newly discovered evidence only on the theory that the references cited in the reexaminations existed at the time of trial, and that the reexaminations analysis is (somehow) derivative evidence. Cf. TDM Am.
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LLC v. United States, 100 Fed. Cl. 485, 491 (Ct. Cl. 2011) (treating ex parte reexamination proceedings as newly discovered evidence on the theory that the facts to which the reexamination pertained were in existence before the courts decision). Under this theory, the diligence requirement for either Rule 59(a) or Rule 60(b) relief becomes critical. See United States v. Cimera, 459 F.3d 452, 461 (3d Cir. 2006) (Evidence is not newly discovered if it was actually known or could have been known by the diligence of the defendant or his counsel.); U.S. Steel v. D. DeMatteo Constr. Co., 315 F.3d 43, 52 (1st Cir. 2002) (similar). The timing of the reexamination resultsviz., when they are discoveredis at least in part within the control of the party instituting the reexaminations. If a party learns of prior art that it believes invalidates a patent in suit, reasonable diligence requires the party to file any reexamination request promptly. In Amado v. Microsoft, 517 F.3d 1353, defendant Microsoft filed a reexamination petition challenging the claims in suit following entry of judgment. See id. at 1363. Microsoft later filed a motion for relief from the judgment under Rule 60(b)(6),19 citing, as newly discovered evidence, statements made by the patentholder in the reexamination process. Id. The district court denied the motion, citing Microsofts lack of diligence in filing the petition. Id. Microsoft was aware of the prior art grounding its reexamination request well before trial, the Court explained, yet did not file the reexamination petition until after the unfavorable judgment was entered. Id. On appeal, the Federal Circuit upheld the district courts reasoning. See id. Amados reasoning applies with equal force here. Hynix could have obtained its newly discovered evidence sooner had it acted with reasonable diligence. The invalidations of the claims-in-suit that Hynix seeks to invoke result exclusively from inter partes reexaminations requested by Micron and Samsung, and which Hynix itself could have filed years ago. Samsung filed the inter partes reexamination requests of the 120 patent and the 916 patent in October
19
It does not matter that Amado analyzed the defendants reexamination evidence under Rule 60(b)(6)s catch-all ground for such terms as are just, rather than Rule 60(b)(2) or Rule 59. The Amado court applied the same diligence requirement that controls the relief based on purported newly discovered evidence under Rule 60(b)(2). Compare 517 F.3d at 1363, with Jones, 921 F.2d at 878. And Hynix acknowledged that Rule 59 and Rule 60 standards are essentially the same. New Trial Mot. 6 n. 9
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2006 and August 2007. Samsung first filed the inter partes reexamination in which the examiner invalidated claim 16 of the 863 patent in June 2007. Microns reexamination requests came even later. If Hynix wanted to try to use non-final reexamination decisions at trial, Hynix itself could have and should have filed similar inter partes reexaminations petitions long ago; Hynix would not have been statutorily estopped from pursuing inter partes reexaminations until the verdict is affirmed on appeal. See 35 U.S.C. 317(b) (2011). But Hynix did not file its reexamination requests for the 120, 020, and 916 patents until spring 2010, over a year after the entry of judgment. By then, Hynix would have faced the prospect of section 317(b) estoppel if it requested inter partes reexaminations, and it therefore could pursue only ex parte reexaminations on those claims. Cf. MPEP 2686.04 (PTO may suspend inter partes reexamination if a District Court decision is pending appeal due to the real possibility that the 35 U.S.C. 317(b) estoppel may attach in the near future). There is no reason why Hynix, in the exercise of due diligence, could not have sought reexamination before trial or before entry of judgment. The iAPX reference grounding the inter partes challenge to claim 16 of the 863 patent has been cited by Hynix throughout this litigation. See Wu Decl. Ex. AA (Hynixs Second Supplemental Invalidity Contentions, served Feb. 21, 2003). The principal prior art cited by the Board in invalidating Claim 28 of the 916 patent and claim 16 of the 863 patent is the Bennett patent. While Hynix and the other Manufacturers have claimed that they did not discover the Bennett reference until July 25, 2008 (see Manufacturers Public Oppn to Rambus Inc.s Mot. to Strike Portions of the McAlexander Expert Rep., Case No. C-05-00334-RMW, Oct. 24, 2008) (D.E. 2391)), nothing suggests it could not have been discovered sooner with reasonable diligence. Bennett was first published in 1988. See Taylor Decl. Ex. 31. Hynixs lack of diligence is even more striking when its own failed ex parte reexaminations are considered. Hynix filed its ex parte reexamination requests regarding claim 32 of the 020 patent, claim 33 of the 120 patent, and claims 9 and 40 of the 916 patent between March and May 2010more than a year after entry of judgment against Hynix. There can be no question that these reexamination requests could have been filed sooner, as these were based on
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Bennett. Hynix also delayed in seeking reexamination of Claim 34 of the 105 patent, and Claims 24 and 33 of the 918 patent. Hynix filed its requests challenging these claims in February 2009, on the eve of final judgment and nearly 3 years after the patent trial. Hynix was aware of the iAPX and Lofgren references underlying its challenge to Claim 33 of the 918 patent long before the patent trial. See Wu Decl. Ex. AA (Hynixs Second Supplemental Invalidity Contentions). Hynix knew about the Inagaki reference cited in its request addressing Claim 34 of the 105 patent by May 11, 2007, see Wu Decl. Ex. BB (Joint Preliminary Invalidity Contentions in the Coordinated Cases, Case No. C 05-00334 RMW, served May 11, 2007, Appendix A-1 at 12), and Inagaki itself was published in 1982, Taylor Decl. Ex. 32 (Inagaki). And, as noted, there was no reason why Hynix could not have discovered earlier the Bennett reference grounding its reexamination request challenging Claim 24 of the 918 patent. The upshot is that Hynixs unexplained and inexcusable delay in seeking reexamination precludes relief at this belated juncture. Amado, 517 F.3d at 1363. 2. The Reexamination Decisions Are Not Admissible Evidence
In any event, no new trial is warranted as the reexamination decisions are not even admissible evidence. The Federal Circuit has held that, as a general rule, evidence of nonfinal reexamination determinations is of little relevance and presents a risk of jury confusion. KTec, Inc. v. Vitax Mix Corp, 696 F.3d 1364, 2012 WL 3856914. at *8 (Fed. Cir. Sept. 6, 2012). Non-final reexaminations, the Court has explained, are of little relevance to the jurys independent deliberations on the factual issues underlying validity, while the risk of jury confusion if evidence on the non-final PTO proceedings were introduced was high. Callaway Golf Co. v. Acushnet Co., 576 F.3d 1331, 1343 (Fed. Cir. 2009). Nor has this analysis been limited to grants of reexamination or initial office actions. Courts have refused to admit evidence of PTO claim rejections. E.g., DataQuill Ltd. v. High Tech Computer Corp., -- F. Supp. 2d --, 2011 WL 6013022, at *15 (S.D. Cal. Dec. 1, 2011) (noting that courts have held that because PTO interim rejections are not binding, they are generally not relevant to issue of invalidity); Tesco Corp. v. Weatherford Intl Inc., 750 F. Supp. 2d 780, 794 (S.D. Tex. 2010) (deeming rejection inadmissible). They have also excluded evidence of other purportedly advanced
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reexamination determinations. E.g., Belden Techs. Inc. v. Superior Essex Commcns, 802 F. Supp. 2d 555, 569 (D. Del. 2011) (refusing to grant a new trial to admit reexamination evidence even assuming a Notice of Intent to Issue Reexamination Certificate is considered final by the PTO, and no further action can be taken by the examiner). Hynix argues that the reexamination results in this case are properly admitted because the examiners have closed prosecution and three of the tried claims have received BPAI decisions of rejection. New Trial Mot. at 9; Hynix Supp. Mem. In Support of Mots., Nov 2, 2012 (D.E. 4179), at 1. But this does not change the irrelevant and highly prejudicial nature of these reexamination results. As noted, reexaminations are conducted without a presumption of validity, such that examiner determinations as to whether a claim should be confirmed or rejected using a completely different standard have no probative value in a court proceeding. Tesco, 750 F. Supp. 2d at 794. What is more, any potential relevance is far outweighed by the risk of prejudice. See Fed. R. Evid. 403. The evidence entails an inherent risk that jurors will accord undue weight to what appears to be a final document and might improperly defer to the PTOs initial determination. IA Labs CA, LLC v. Nintendo Co., Ltd., 857 F. Supp. 2d 550, 552 (D. Md. 2012). The reexaminations of the tried claims have not resulted in final rejections. The most that Hynix can say is that three of the claims were the subject of Board rejections; as Hynix acknowledges, Rambus still has the final option of pursuing an appeal to the Federal Circuit. New Trial Mot. at 9. To avoid the prospect of the jury giving these nonfinal determinations undue weight, the district court would need to give the jury a detailed explanation of reexamination proceedings and stress its limited value. Cf. K-Tec, 696 F.3d 1364, 2012 WL 3856914, at *8 (holding that district court did not abuse its discretion in noting that disputed prior art was before the PTO in reexamination, along with explanation and caveat that they ha[d] really no value). Yet that could only confuse the jury and invite it to focus on collateral matters like the different burdens applicable in the two proceedings. As one court has explained, [d]elving into the details of the reexamination and providing the necessary context of the PTO structure and processes would inevitably waste time and detract from the key issues in the lawsuit. IA Labs, 857 F. Supp. 2d at 552.
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This risk is pronounced here because many of the reexamination results that Hynix seeks to introduce involve different claims from the claims-in-suit. Hynix cites no precedent for admitting reexamination of a different claim to prove invalidity of an infringed claimlet alone one that has been confirmed by a reexamination certificate, such as claim 34 of the 105 patent. If such evidence is admitted, the jury would need to relate the reexaminations to the claims in suit and consider their proper weight given the nature of those proceedings. Presumably, Rambus would be able to respond in kind and seek to introduce reexamination rulings confirming the claims, creating the palpable risk of a patent trial focusing on actions taken by the PTO on the disputed claims and claim language in legally distinct and incomplete proceedings. Hynix invokes the district courts discretionary decision to admit reexamination evidence in Oracle Am. Inc. v. Google, Inc., No. C 10-03561 WHA, 2012 WL 1189898 (N.D. Cal. Jan. 4, 2012). But district courts have very broad discretion to weigh the probative value and prejudicial effects of this evidence, see K-Tec, 696 F.3d 1364, 2012 WL 3856914, at *8, and the Oracle courts reasoning is both inapposite and unpersuasive. It is inapposite because deciding whether to admit reexamination evidence ahead of trial is fundamentally different from assessing whether it warrants relief from the judgment or a new trial. More fundamentally, the Oracle courts analysis fails to account for the non-final nature of a final rejection by the examiner. Oracle, 2012 WL 1189898, at *3. The district court there reasoned that it would be misleading to instruct the jury on the presumption of validity while concealing from the jury the fact that the rationale for the presumptionPTO examiner expertisehas been drawn into question. Id. But [a] claim is not invalidated unless and until the entire reexamination process, culminating in an appeal to the Federal Circuit, has occurred, a final decision is rendered adverse to the patentee, and a certificate is issued by the PTO cancelling the patent claims. ePlus, Inc. v. Lawson Software, Inc., No. 3:09cv620, 2011 WL 2119413, at *3 (E.D. Va. May 24, 2011). Until the entire reexamination review process has run its course, it is uncertain whether the original examiners expertise will be vindicated or undercut. Nor can Hynix rely on Standard Havens I to obtain a new validity trial. Cf. New Trial Mot. at 6. Standard Havens I merely mused in dicta that the appellants arguments raised
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serious questions of law which could necessitate a new trial, 897 F.2d at 515 (emphasis added). The issue presented there was quite different: whether to stay an injunction pending appeal, an inquiry that required balancing the hardship of the appellant with its likelihood of success. Id. at 513. Due to the extreme hardship (impending bankruptcy) confronting the appellant, the panel held that showing a substantial case on the merits sufficed. Id. at 515-16. Here, however, Hynix must meet a far more demanding standard. See Feature Realty, 331 F.3d at 1093 (requiring that supposed new evidence likely would have changed the outcome of the case). Since the reexaminations are not even admissible, it follows a fortiori that Hynix cannot satisfy this requirement. Indeed, in Standard Havens II, the Federal Circuit affirmed denial of a new trial on the ground that pending reexaminations [d]id not yet rise to the level of new evidence as would justify relief under Rule 60. 953 F.2d at 1372 (citation omitted). D. Hynix Cannot Use In re Rambus To Avoid Its Binding Stipulation To The Construction Of Memory Device The decision in In re Rambus, which arose from an ex parte reexamination Hynix belatedly requested in 2009, 694 F.3d at 44, does not work the kind of change in controlling law required for relief from the mandate and a new trial. See Amado, 517 F.3d at 1359; Bell, 5 F.3d at 67. Hynix invokes the Federal Circuits construction of the term memory device to mean a component of a memory subsystem, not limited to a single chip , and its determination that, with this construction, iAPX anticipated claim 18 of the 918 patent (which was not tried here). 694 F.3d at 48, 50-51. But in this case, Hynix specifically agreed before trial that the term memory device meant an integrated circuit device in which information can be stored and retrieved electronically. Joint Claim Construction and Pre-Hearing Statement Pursuant to Patent Local Rule 4-3, Sept. 12, 2003, at 1 (D.E. 326). At the time Hynix stipulated to this construction, the Federal Circuit had already held that integrated circuit device was properly construed as a circuit constructed on a single monolithic substrate, commonly called a chip. See Infineon, 318 F.3d at 1091. These two constructions, one stipulated by Hynix and the other compelled by Federal Circuit precedent, framed this Courts construction. In re Rambus does not change the law governing the construction of memory
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device in this case, much less Infineons construction of integrated circuit device, cf, In re Rambus, 694 F.3d at 47. Because Hynix stipulated to the construction of memory device to mean integrated circuit device, it is bound to that construction by the law of waiver. Hynix interposed no objection to the stipulated construction in the pretrial conference statement, see Fed. R. Civ. P. 16(e) (requiring manifest injustice to modify a final pretrial conference order), and reconfirmed its agreement with that interpretation in the joint proposed jury instructions. Joint Submission of Proposed Preliminary Jury Instructions, Mar. 9, 2009 (D.E. 1788), at 20. As we have repeatedly explained, litigants waive their right to present new claim construction disputes if they are raised for the first time after trial. Lazare Kaplan Intl, Inc. v. Photoscribe Techs., Inc., 628 F.3d 1359, 1376 (Fed. Cir. 2010) (citation and quotation marks omitted). Hynix waived the issue again by failing to challenge the construction of memory device on appeal. Under the mandate rule, [a]n issue that falls within the scope of the judgment appealed from but is not raised by the appellant in its opening brief on appeal is necessarily waived. Amado, 517 F.3d at 1360 (citation omitted). Hynix cannot undo its own forfeiture by filing a reexamination request after the verdict was handed down and then seizing on the result. Nothing in the law of waiver or the mandate rule permits this sort of gamesmanship. Hynixs egregious delay means that In re Rambus cannot even be properly considered an intervening decision. This is not a case where the supposed intervening decision occurred in a completely unrelated case; Hynix itself had requested the reexamination underlying In re Rambus, but Hynix did not make the request until the eve of judgment. Had Hynix not sat on its hands for years, the construction of memory device could have been litigated and resolved in this case before trial, before judgment, or before remand. Notably, Hynix itself advocated a broad construction of memory device in the 334 case, see Rambus Inc. v. Hynix Semiconductor Inc., 569 F. Supp. 2d 946, 972-73 (N.D. Cal. July 10, 2008) and Order Clarifying the Courts Construction of Memory Device, No. C-05-00334 RMW, Nov. 21, 2008 (D.E. 2603), but made no effort to dispute that term in this case until now. Such inexcusable delaywhich may well reflect Hynixs awareness of its waiversuffices to deny relief. See Amado, 517 F.3d at 1363.
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Even if In re Rambus could be treated as intervening authority on a controlling question of law, Hynixs failure to establish prejudice forecloses relief. Under Federal Circuit law controlling a challenge to a claim construction instruction, Bettcher, 661 F.3d at 638-39, it is Hynix that has the burden of establish[ing] that the [alleged claim construction] errors had prejudicial effect, id. at 639; see also NTP, 418 F.3d at 1312 (similar). Hynix made no effort to meet that burden, and in any event the reexamination results show there could be no prejudice. In the very same reexamination that gave rise to In re Rambus, the PTO examiner confirmed both of the tried claims from the 918 patentclaims 24 and 33, each of which contains the memory device limitationdespite rejecting untried claim 18. See Taylor Decl. Ex. 42, at 2 (confirming claims 24 and 33). The PTO examiner issued confirmations despite adopting a broader construction of memory device than the one Hynix now advocates. Compare id. at 17 (PTO examiner construing memory device as a device which allows the storage and retrieval of information) with In re Rambus, 694 F.3d at 50 (construing memory device as a component of a memory subsystem, not limited to a single chip, where the device may have a controller that, at least, provides the logic necessary to receive and output specific data, but does not perform the control function of a CPU or bus controller). Whats more, the PTO examiner confirmed claims 24 and 33 without presuming them valid; that only goes to show that the construction of memory device would not make a difference to the validity disputes in this case, where Hynix faces the much more difficult burden of overcoming the presumption of validity. See NTP, 418 F.3d at 1312 (instruction not prejudicial if it could not have changed the result). Much less could the construction affect claims that do not have the memory device limitation. In particular, claims 32 and 36 of the 020 patent use the term integrated circuit device, which is controlled by Infineon. Both of these claims have been confirmed by examiners; claim 32 was confirmed in two separate reexaminations. III. Hynixs Request For A Stay Pending Reexamination Is Even More Meritless Than Its Similar Request In 2008 Hynix seeks to stay and therefore further delay this case as an alternative to a new trial, but that request fails for many of the same reasons as the Hynixs meritless new trial bid.
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This is not the first time Hynix has sought a stay pending reexaminations. In 2008 in the 05-06 Cases (Case Nos. 05-00334, 05-00298, and 06-00244), Hynix and its allies previously sought, and were denied, a stay pending the outcome of reexaminations for the patents-in-suit.20 The case for a stay of this case, at this juncture, is even weaker. District courts have discretion to grant or reject a request to stay pending the outcome of reexamination proceedings. See Viskase Corp. v. American Natl Can Co., 261 F.3d 1316, 1327-28 (Fed. Cir. 2001) (The court is not required to stay judicial resolution in view of the reexaminations.). In considering whether to stay a case pending reexamination, courts consider three main factors: (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 non-moving party. Telemac Corp. v. Teledigital Inc., 450 F. Supp. 2d 1107, 1111 (N.D. Cal. 2006). These factors did not weigh in favor of a stay of the 05-06 Cases in 2008, and each weighs decisively against a stay in this case today. A. The Advanced Stage Of These Proceedings Weighs Decisively Against A Stay [A] clear rule has developed in cases considering stays that, where 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. Storus Corp. v. Aroa Mktg., Inc., No. C-06-2454 MMC, 2008 WL 540785, *1 (N.D. Cal. Feb. 25, 2008); accord Fresenius Med. Care Holdings, Inc. v. Baxter Intl, Inc., No. C 03-1431 SBA, 2007 WL 1655625 (N.D. Cal. June 7, 2007) (Fresenius I). Consistent with this rule, the vast majority of cases where trial courts elected to stay cases pending reexaminations involve litigation in its
20
In Case No. C-05-00334, Hynix moved to sever and stay its claims in August 2008, ahead of trial in the 05-06 Cases. Hynixs Mot. to Sever and Stay Claims Involving Hynix Aug. 1, 2008, at 8-9 (D.E. 2004). Among other grounds, Hynix sought a stay pending the outcome of reexamination proceedings for the claims in suit. The district court denied that motion and ordered the case to proceed to trial on a consolidated basis. See 9/5/08 Minute Order, Case No. C-05-00334-RMW (D.E. 2217) (setting out proposal for consolidated trial); Wu Decl. Ex. CC (9/24/08 Reporters Transcript 4:3-10, 29:25-30:1, Case No. C-04-00334 RMW) (reconfirming view that the case should proceed on a consolidated basis).
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embryonic stages. Like.com v. Superfish, Inc., No. 09-CV-5805-SBA, 2010 WL 2635763, at *2 (N.D. Cal. June 30, 2010); see also Wireless Recognition Techs. v. A9.com, Inc., Nos. 12-01217 EJD, et al., 2012 WL 4005459, at *2 (N.D Cal. Sept. 11, 2012) (The early stage of a litigation weighs in favor of a stay pending reexamination.). In this respect, the liberal policy that Hynix insists applies to stays pending reexamination (New Trial Mot. 14 (quoting ASCII Corp. v. STD Entmt USA, Inc., 844 F. Supp. 1378 (N.D. Cal. 1994)), is qualified by the stage of the litigation. In fact, there appears to be a growing concern among at least some judges in this district that, on balance, staying a case even in its early stages pending reexamination has not led to the just, speedy, and efficient management of the litigation, but instead has tended to prolong it without achieving sufficient benefits in simplification to justify the delay. Network Appliance Inc. v. Sun Microsystems, No. C-07-06053 EDL, 2008 WL 2168917, at *3 (N.D. Cal. May 23, 2008). The clear rule against staying advanced proceedings applies with special force here, given the completion of trial and appeal on all patent issues. To defer to reexaminations at this point would amount to [a] stay of finality, after the issues of validity and infringement have been litigated and decided by the district court and appealed to the Federal Circuit. Fresenius USA, Inc. v. Baxter Intl, Inc., 582 F.3d 1288, 1305 (Fed. Cir. 2009) (Fresenius II) (Newman, J., concurring); see also Fresenius III, 2011 WL 2160609 at *1 (denying stay on remand after full trial and appeal). B. A Stay Would Make Proceedings More, Not Less, Complex There is no possibility that a stay pending reexamination will simplify the issues in question and trial of the case. Like.com, 2010 WL 2635763, at *2. After Hynix has already had its patent trial and appeal, the reexaminations could not eliminate the need for trial if the claims are cancelled or, if the claims survive, facilitate trial by providing the Court with expert opinion of the PTO. Wireless Recognition, 2012 WL 4005459, at *2 (citation omitted). By keeping the door open to potentially revisit patent issues, a stay could only add to, and render more complex, the remand proceedings here. The Court has now carried out the Federal Circuits mandate and resolved the spoliation issue, with only the amount of royalties modified by the
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spoliation sanction left to be determined. In these circumstances a stay pending reexamination would work a distortion of the role of reexamination. Fresenius II, 582 F.3d at 1305 (discussing suitability of a stay following a Federal Circuit decision affirming and reversing in part the district courts patent determinations, and remanding for recalculation of the proper royalty award) (Newman, J., concurring). Moreover, it is not even clear what a stay would accomplish. Seven of the ten claims here have been confirmed, and confirmations for six of those claims are not subject to appeal: claims 24 and 33 of the 918 patent, claims 9 and 40 of the 916 patent, claim 34 of the 105 patent, and claim 32 of the 020 patent. See SJ Mot. at 5. That means the reexaminations would not finally resolve all issues in the litigation in Hynixs favor even if a stay is granted. Cf. Yodlee, Inc. v. Ablaise, Ltd., No. C-06-07222 SBA, et al., 2009 WL 112857, at *5 (N.D. Cal. 2009). At most, the conclusion of pending reexaminations would only lead to more litigation. Cf. Belden Techs. Inc. v. Superior Essex Commcns LP, No. 08-63-SLR, 2010 WL 3522327, at *2 (D. Del. Sept. 2, 2010) (a stay is not favored when validity or other issue outside the purview of reexamination remain to be tried). C. Hynixs Delay In Pursuing Reexamination, And Its Efforts To Avoid The Adverse Patent Verdict Here, Also Weighs Against A Stay Courts consider evidence of dilatory motives or tactics, such as when a party unduly delays in seeking reexamination of a patent. AT&T Intellectual Property I v. Tivo, Inc., 774 F. Supp. 2d 1049, 1054 (N.D. Cal. March 1, 2011). A request for reexamination made well after the onset of litigation followed by a subsequent request to stay may lead to an inference that the moving party is seeking an inappropriate tactical advantage. Belden, 2010 WL 352237, at *2-*3; see also Affinity Labs of Texas v. Apple Inc., No. 09-04436 CW, 2010 WL 1753206, at *2 (N.D. Cal. Apr. 29, 2010) (finding that the 8-month delay between the filing of a patent infringement action and the filing of reexamination petitions weighed against a stay). Granting stays based on such belated requests also prejudice patentholders. See Belden, 2010 WL 3522327, at *2 (inferring prejudice from a stay request made by a defendant before trial, explaining that [a] request at this late stage is prejudicial to [the patentees] investment in trial
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preparation and does not comport with the notion of judicial efficiency). Hynix elected to bring this suit against Rambus in 2000. It elected to forego filing the inter partes reexamination petitions filed by other manufacturers, and waited until 2009 and 2010 to file its ex parte reexamination requests. Allowing Hynix to delay the entry of judgment, in the face of Federal Court mandate, would reward Hynixs unreasonable delay and unfairly prejudice Rambus. IV. The Court Should Deny Hynix Leave To File A Supplemental Reply Lastly, Hynix seeks leave to file a supplemental reply to Rambuss amended counterclaim, so that it can assert an affirmative defense based on the alleged collateral estoppel effect of the BPAI decisions. Mot. for Leave at Notice at 2. Hynixs motion fails to meet the standard of either Rule 16 or Rule 15 of the Federal Rules of Civil Procedure, and should therefore be denied. A. Hynix Cannot Establish Good Cause, Much Less Manifest Injustice Hynix concedes that its motion is initially governed by Rule 16, and argues that good cause exists for its proposed supplemental reply. See Mot. for Leave at 5; see also Coleman v. Quaker Oats Co., 232 F.3d 1271, 1295 (9th Cir. 2000) (party seeking amendment bears the burden of establishing good cause). But because Hynix is seeking amendment after trial, it must satisfy the more demanding manifest injustice standard. Fed. R. Civ. P. 16(e) (The court may modify the order issued after a final pretrial conference only to prevent manifest injustice). Hynix cannot show good cause, let alone manifest injustice. This good cause standard primarily considers the diligence of the party seeking the amendment. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). As the Ninth Circuit has explained: Although the existence or degree of prejudice to the party opposing the modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving partys reasons for seeking modification. If that party was not diligent, the inquiry should end. Id. (internal citation omitted). Although Hynix contends that it was impossible for Hynix to assert a defense
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based on the BPAI rulings before those rulings were issued, Mot. for Leave at 5, this assertion misses the mark.21 As an initial matter, Hynix cannot meaningfully defend its lack of diligence in failing to seek amendment for nine months after the issuance of the first BPAI decisions that it relies upon. See id. at 2 (citing BPAI decision dated January 19, 2012). More fundamentally, Hynix failed to diligently pursue the potential reexamination challenges in the first place. As discussed above, see supra at 34-36, the Board decisions that Hynix seeks to invoke arise out of inter partes reexaminations that were filed as long ago as 2006 (and which Hynix could have pursued at that time or earlier, but did not). The underlying, allegedly invalidating art has been cited by Hynix in this proceeding as far back as 2003, and was publicly available as long ago as 1982. Yet Hynix took no action until 2009, when it filed the first of its ex parte reexamination petitions. That is the opposite of diligence. See Amado, 517 F.3d at 1363 (denying infringer relief from judgment based on statements made by patentee in reexamination proceeding due to lack of diligence in filing the [reexamination] petition, where infringer was aware of prior art cited in reexamination request well before trial but did not file the reexamination petition until after the unfavorable judgment was entered); see also Jackson v. Laureate, Inc., 186 F.R.D. 605, 608 (E.D. Cal. 1999) (diligence inquiry considers development of matters which could not have been reasonably foreseen or anticipated) (emphasis added). Because Hynix cannot demonstrate that it was diligent, the inquiry should end, Johnson, 975 F.2d at 609. And since Hynix failed to show good cause, it follows that denial of leave would not be manifestly unjust. See Best Buy Stores, L.P. v. Manteca Lifestyle Center, No. 2:10-cv-00389 WBS KJN, 2012 WL 2117670, at *1-*2 (E.D. Cal. June 8, 2012) (lack of diligence prevented relief under either standard). B. Supplementation Is Not Proper Under Rule 15 Even if Hynix could bear its burden of showing manifest injustice, leave to file The claim is also inconsistent with Hynixs proposed supplemental reply. Hynix claims collateral estoppel not only with respect to the Board decisions that are specifically identified in the proposed supplemental reply, but also with respect to any further BPAI/PTAB decisions regarding any related Rambus patents. See Mot. for Leave Ex. A at 19. Clearly Hynix believes that it is not impossible to assert a defense based on BPAI rulings that have not yet issued, and Hynix offers no justification for failing to assert this conditional collateral estoppel defense long ago.
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its supplemental reply should be denied under Rule 15. See Mot. for Leave at 5 (conceding that its proposed supplemental reply must meet the standards of both Rule 16 and Rule 15). Although Rule 15 is more liberal than Rule 16s exacting standard, leave to amend is not to be granted automatically. Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). Grounds for denying leave to amend include undue delay, bad faith or dilatory motive on the part of the movant, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment. Foman v. Davis, 371 U.S. 178, 182 (1962). Each of these factors weighs decisively against permitting Hynixs proposed supplementation.22 Prejudice: Hynix asserts that Rambus will not be prejudiced if Hynix is permitted to file a supplemental reply, notwithstanding that Rambus has already gone through 12 years of litigation, 3 trials, an appeal, and resolution of spoliation issues on remand. As the Ninth Circuit held in Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980 (9th Cir. 1999), even before trial [a] need to reopen discovery and therefore delay the proceedings supports a district courts finding of prejudice from a delayed motion to amend the complaint, id. at 986. Although Hynix claims that any delay would be minimal (Mot. for Leave at 8), it conveniently ignores the alternative requests that it filed: for a new trial, or to stay these proceedings entirely. While Rambus disputes that Hynix is entitled to any of these remedies, Hynix cannot seriously dispute that allowing the assertion of its newly-identified (but long-known) defense will substantially prolong and delay these proceedings. This fact serves both to distinguish the cases upon which Hynix relies and to establish prejudice to Rambus. The cases in Hynixs brief involved relatively brief (if any) delays in ongoing litigation that was far from over. See, e.g., SKF Condition Monitoring, Inc. v. Invensys Sys., Inc., Case No. 07cv1116 BTM (BGS), 2010 U.S. Dist. LEXIS 90305, at *7-*8 (S.D. Cal. Aug. 31, 2010) (motion brought over eight months prior to close of discovery, over a Citing Senza-Gel Corp. v. Seiffhart, 803 F.2d 661, 667 (Fed. Cir. 1986), Hynix contends that the Court need not consider the other Foman factors if prejudice is not established. See Mot. for Leave at 8. This is simply incorrect. In Senza-Gel, the Federal Circuit stated that [w]here there is lack of prejudice to the opposing party and the amended complaint is obviously not frivolous, or made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny such a motion. Senza-Gel, 803 F.2d at 667. Accordingly, at a minimum, the Court must consider both futility and delay/dilatory motivation, even if it finds no prejudice.
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year before the final pretrial conference, and before any trial date set); Aten Intl Co. v. Emine Tech. Co., Case No. SACV 09-0843 AG (MLGx), 2010 U.S. Dist. LEXIS 46226, at *9, *15-*16 (C.D. Cal. Apr. 12, 2010) (motion brought five months before claim construction hearing and eight months before close of discovery; movant indicated agreement to ninety-day extension of discovery and trial schedule); Beery v. Hitachi Home Elecs. (America), Inc., 157 F.R.D. 481, 48283, 484-85 (C.D. Cal. 1994) (motion brought less than eight months after filing of complaint, and permitting amendment allowing additional claims would provide for expenditure of minor additional discovery and trial resources); Howey v. U.S., 481 F.2d 1187, 1191 (9th Cir. 1973) (no prejudice where issues raised in amended third-party complaint could readily have been included in ongoing trial that raised similar, if not identical issues); Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989) (no prejudice where motion filed within a year after complaint originally filed, and before discovery completed); Ziptronix, Inc. v. Omnivision Techs., Inc., Case No. C 10-05525 SBA, 2012 U.S. Dist. LEXIS 108577, at *13-*14 (N.D. Cal. Aug. 2, 2012) (no prejudice from amended complaint because discovery in this case has just begun); see also Senza-Gel, 803 F.2d at 667 (no prejudice where motion was made while trial was on-going, and where trial judge properly rejected movants claim that witness relevant to issue raised by amendment was unavailable to testify). Indeed, in Genentech, the court distinguished the facts of Tenneco Resins, Inc. v. Reeves Bros., Inc., 752 F.2d 630 (Fed. Cir. 1985), in which the Federal Circuit affirmed the trial courts denial of leave to amend a reply to a counterclaim to assert invalidity and unenforceability defenses. The Genentech court noted that [t]he Tenneco plaintiff appealed the district courts denial of leave to amend eleven years after the original complaint had been filed, after numerous proceedings in three different district courts involving four patents, and the conclusion of one trial on the merits. Genentech, 127 F.R.D. at 531 (citing Tenneco, 752 F.2d at 631-33). This case presents a stronger basis for denial of leave to amend than even Tenneco: it has been pending for over twelve years, has already consumed extraordinary amounts of this Courts time, and has seen the completion of three separate trials and entry of judgment. As the Federal Circuit noted in Tenneco, [a] busy district court need not allow itself to imposed upon by the presentation of
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theories seriatim. Tenneco, 752 F.2d at 635 (internal quotations and citation omitted). Rambus seeks and deserves final resolution of its claims respecting patents that a jury has already found infringed and not invalid (and which findings the Federal Circuit has affirmed). The delay that would necessarily follow from Hynixs proposed additional defense readily establishes prejudice to Rambus. Undue Delay/Dilatory Motive: As discussed above, Hynixs delay is both substantial and indefensible. Moreover, as also discussed above, Hynixs deliberate decision not to seek reexamination sooner was clearly the product of its strategy of filing coordinated, dualfront court actions against Rambus, CE Order, 2009 WL 292205, at *5, and an effort to avoid section 317(b)s limitations on inter partes reexaminations. See supra at 34-36. While Rambus believes that this strategic ploy reflects bad faith, at a minimum it evidences a dilatory motive that readily justifies denial of Hynixs motion. See, e.g., Tenneco, 752 F.2d at 634-35. Hynix argues that supplementation may be proper at any stage of the proceedings (Mot. for Leave at 9-10), but the Ninth Circuit has held otherwise. See Harbeson v. Parke Davis, Inc., 746 F.2d 517, 521 (9th Cir. 1984) (finding waiver where party failed to supplement pleading in trial court after having reasonable opportunity to do so). None of Hynixs authorities allowed new pleadings for a party as dilatory and advantage-seeking as Hynix. Some permitted amendment before the conclusion of trial. See BIC Leisure Prods., Inc. v. Windsurfing Intl, Inc., 1 F.3d 1214, 1222 (Fed. Cir. 1993) (leave to amend for second phase of bifurcated trial); Senza-Gel, 803 F.2d at 662-63 (similar); Howey v. United States, 481 F.2d 1187 (9th Cir. 1973) (amending at the start of trial); Nguyen v. United States, 792 F.2d 1500, 1503 (9th Cir. 1986) (leave to amend may be considered after summary judgment). Others allowed supplementation, in the absence of unexcused delay, to address events that occurred after the original pleading. See Otis Elevator Co. v. 570 Building Corp., 35 F. Supp. 348 (E.D.N.Y. 1940) (new acts of infringement that took place after trial); Keith v. Volpe, 858 F.2d 467, 474-75 (9th Cir. 1988) (alleged violation that occurred after entry of consent decree); Raduga USA Corp. v. U.S. Dept. of State, 440 F. Supp. 2d 1140, 1151 (S.D. Cal. 2005) (alleged failure to comply with prior final order, where plaintiffs did not cause any unreasaonbl[e] delay); Griffin v. Cnty. Sch.
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Bd., 377 U.S. 218, 225-26 (1964) (similar). The rule permitting supplemental pleadings is a tool of judicial economy, enabling a court to award complete relief in one action. Keith, 858 F.2d at 473 (citation omitted); Fed. R. Civ. P. 15(d). What Hynix is trying to dowaiting until after a full trial and appeal to request supplementation, even though all facts underlying its new defense were available over a decade ago, in order to reverse its loss on the issue it already triedis a distortion of that objective. Futility: Hynixs motion should also be denied because its proposed additional defense is futile. Hynix claims that the test for futility is the same as that under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See Mot. for Leave at 11:7-13. While Rambus does not necessarily agree, see, e.g., Lockheed Martin, 194 F.3d at 986 (Where the legal basis for a cause of action is tenuous, futility supports the refusal to grant leave to amend.) (emphasis added) (citation omitted), it makes no difference here. As discussed at length above, Hynixs collateral estoppel defense fails as a matter of law for multiple reasons, including without limitation violation of the mandate rule, application of a lesser burden of proof in the reexamination proceedings, the absence of finality, and lack of identicality. See supra at 13-28. Judicial Efficiency: Finally, Hynix contends that allowing its supplemental reply would promote judicial efficiency. But Hynix does not (and cannot) argue that denial of its request would result in a second, separate litigation between the parties. Cf. San Luis & DeltaMendota Water Auth. v. U.S. Dept of Interior, 236 F.R.D. 491, 499 (E.D. Cal. 2006) (allowing amendment of complaint where denial could result in pendency of two, separate actions). Instead, Hynix contends that the controversy between the parties should be settled here and now (Mot. for Leave at 15), rather than on appeal to the Federal Circuit. But as the Court doubtless anticipates, its determination respecting the reexamination issue will likely be raised before the Federal Circuit regardless of which way it resolves the issue. There is no judicial efficiency achieved by permitting Hynixs proposed amendment where the Federal Circuit will ultimately be required to pass on the issue in any event. This factor therefore also militates against Hynixs motion. In sum, none of the relevant considerationswhether the good cause or
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manifest injustice standard under Rule 16 or the various Foman factors under Rule 15 supports granting the relief that Hynix requests. Its motion for leave to file a supplemental reply to Rambuss amended counterclaim should therefore be denied. CONCLUSION For all of the foregoing reasons, the Court should DENY in their entirety (1) Hynixs motion for summary judgment or, in the alternative, partial summary judgment, on the issue of the collateral estoppel effect of reexaminations or Rambuss patents; (2) Hynixs motion for a new trial, or in the alternative, motion for a stay; and (3) Hynixs motion for leave to file a supplemental reply.
Dated: November 20, 2012
MUNGER, TOLLES & OLSON LLP SIDLEY AUSTIN LLP
By:
/s/ Gregory P. Stone Gregory P. Stone Attorneys for RAMBUS INC.
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Rambus'S Opp. To Hynix'S Mot. For Summary Judgment, Etc. CASE NO. 00-20905-RMW

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Rambus'S Opp. To Hynix'S Mot. For Summary Judgment, Etc. CASE NO. 00-20905-RMW

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HYNIX SEMICONDUCTOR, INC., et al., Plaintiffs, vs. RAMBUS INC., Defendant.

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The Court Should Exercise Its Discretion To Deny Estoppel....... 25

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The Court Should Deny Hynix Leave To File A Supplemental Reply................. 45 A. B.

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TABLE OF AUTHORITIES (continued) Page(s)

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