letter from mm to court

8/14/2019 Letter From MM to Court

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December 29, 2008

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Weil, Gotshal & Manges llp 2 0 1 R E D W O O D S H O R E S PA R K WAY

R E D W O O D S H O R E S , C A 9 4 0 6 5

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A U S T I N

B E I J I N G

B O S T O N

B U D A P E S T

D A L L A S

F R A N K F U R T

H O N G K O N G

H O U S T O N

L O N D O N

M I A M I

M U N I C H

N E W Y O R K

PA R I S

P R A G U E

P R O V I D E N C E

S H A N G H A I

WA R S A W

WA S H I N G T O N , D . CBY E-FILING AND EMAIL

Honorable Ronald M. WhyteUnited States District CourtNorthern District of California280 South 1st StreetSan Jose, CA 95113

Re: Rambus Inc. v. Hynix Semiconductor, Inc. et al. , C05-00334; Rambus Inc. v. Samsung Semiconductor Co., Ltd. et al. , C05-02298; Rambus Inc. v. Micron Technology, Inc. et al. , C06-00244

Your Honor:Pursuant to the Courts request, the Manufacturers submit this letter to set forth

their position regarding phases in the January 2009 Trial, order of presentation and proof, theManufacturers reservation of rights, and the proposal by Micron, Samsung, and Hynix regardinga Micron-only liability trial in which Samsung and Hynix would be bound by the jury verdict,with Rambuss claims against Nanya relating to DDR2 and DDR3 products to be deferred andincluded in the liability trial between Rambus, Samsung, and Nanya relating to Rambuss SDRand DDR SDRAM claims against Samsung and Nanya.

The Manufacturers proposal regarding not contesting infringement was set forthin their letter to the Court dated December 19, 2008 (attached hereto as Exhibit A). Micron,Samsung, and Hynixs proposal regarding a Micron-only liability trial in January 2009, in whichSamsung and Hynix would not participate before the jury but which Samsung and Hynix agreewould bind them (and which would bind Rambus as to Samsung and Hynix), was made at theDecember 19, 2008 hearing and was addressed in a December 22, 2008 letter to counsel forRambus (attached hereto as Exhibit B).

This letter brief further addresses and supplements these two proposals, addressesissues raised by Rambus in a December 24, 2008 telephonic meet and confer, and addresses

Case 5:05-cv-00334-RMW Document 3003 Filed 12/29/2008 Page 1 of 10


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Honorable Ronald M. WhyteDecember 29, 2008Page 2

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Weil, Gotshal & Manges LL P

Rambuss counter-proposal set forth in a December 29, 2008 email (attached hereto as ExhibitC ).

I. Manufacturers Proposal Not To Contest Infringement

The terms of the Manufacturers proposal to not contest infringement werespecified in their December 19 letter. Rambus raised several concerns during the parties meetand confer session and has now made certain counter-proposals. The concerns and counter-proposals fall into three categories: 1) the meaning of the Manufacturers not contestinginfringement and what issues relating to infringement were the Manufacturers reserving; 2) what

should the jury be told regarding infringement; and 3) without a trial on the remaininginfringement issues, what would the record be on appeal of infringement of the limitations theCourt has ruled on in the event that the Federal Circuit changed the Courts claim constructions.These issues are discussed below.

Rambus also expressed concerns and made counter-proposals regarding theordering of the liability and damages phases and the ordering of presentation and proof at trial.These last two issues are addressed in Sections II and III of this letter.

1. Meaning of The Manufacturers Not Contesting Infringement;Reserved Issues

The Manufacturers made clear in their December 19 letter, at the December 19hearing, and in their December 24 meet and confer with Rambus that their proposal to notcontest infringement was manifestly not a concession of infringement (as Rambus has describedit) but rather a proposal that they not contest infringement at trial, while preserving their abilityto appeal the claim construction and the Courts November 24 Order granting in part Rambussmotions for summary judgment of infringement. Specifically, the Manufacturers would notcontest whether the following limitations are met in the Accused Products:

data output synchronously with respect to a rising edge transition of the externalclock signal and synchronously with respect to a falling edge transition of theexternal clock signal (696 claim 4 and 446 claim 3);

data output in response to a rising and falling edge transition of an externalclock signal (020 claim 36);

sampling [or receiving] data synchronously with respect to the external clock signal (184 claim 14; 051 claim 27; 863 claim 16); and



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synchronous integrated circuit device, memory device, dynamic random accessmemory device (051 claim 43; 120 claim 33; 916 claim 28; 863 claim 16; 037claim 34; and 696 claim 4).

In addition, it is the Manufacturers position that the Courts disposition on summary judgmentof the limitation regarding sampling data after a programmable number of clock cycles of theexternal clock (285, claim 16) is also dispositive of the variable latency limitations of thefollowing claims:

037, claim 34 (sampling data after a delay time)

696, claim 4 (data output after programmable delay)

051, claim 27 (sampling data after programmed delay)

051, claim 43 (sampling data after predetermined delay)

916, claim 28 (data output after programmable delay)

The Manufacturers do not concede infringement and do not agree to abandon their appealrights or summary motions currently pending that relate to infringement (in particular,Samsungs and Nanyas separate motions for summary judgment of non-infringement of themethod claims). They further do not agree to abandon their defenses relating to exhaustion,which are the subject of a pending motion for summary judgment by Rambus and which, if thatmotion is denied, Manufacturers propose be tried during the damages phases, as discussed intheir December 19 letter.

The approach proposed by the Manufacturers is entirely proper, and would be themost efficient way to resolve the remaining disputes. After the remaining issues are tried, theCourt can enter final judgment regarding infringement, validity, and damages. 1 Once there isfinal judgment, the parties may appeal the judgment. Romoland Sch. Dist. v. Inland Empire

Energy Ctr., LLC , 548 F.3d 738 (9th Cir. 2008) (Except in limited circumstances not currently

at issue, parties may only appeal from, and appellate courts only have jurisdiction over, finaldecisions of the district courts. See 28 U.S.C. 1291.). Indeed, the claim construction issues

1 To the extent Rambuss counter-proposal implies that the Court should enter a final order oninfringement prior to the January 2009 Trial, see Dec. 29, 2008 Email at para. 1, theManufacturers believe that it would be premature and unnecessary for the Court to do so until allissues are final.



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and other infringement-related issues identified by the Manufacturers can be appealed, even if the infringement issues are not tried. Cf. Howmedica Osteonics Corp. v. Wright Med. Tech.,

Inc. , 540 F.3d 1337, 1343 (Fed. Cir. 2008) (plaintiff stipulated to a final judgment of non-infringement because it could not prove infringement under the courts claim construction);

Budde v. Harley-Davidson, Inc. , 250 F.3d 1369, 1371, 1375 (Fed. Cir. 2001) (plaintiff appealed judgment of non-infringement which it requested following the courts claim construction order).

Rambus counter-proposes that the Courts final order adjudicating infringementhave the same force and effect as if it had been entered after a full trial and jury verdictdetermining Rambuss infringement claims in Rambuss favor. Dec. 29, 2008 Email at para. 3.

Although, the Manufacturers propose to not contest infringement (which as described above isnot a concession of infringement), they do not propose to pretend there was a full trial andadverse jury verdict or that the Courts final order should be treated as the equivalent of anadverse jury verdict following a full trial. As a result, the Manufacturers do not agree withRambuss counter-proposal.

Rambus further counter-proposes that the Manufacturers counterclaims for adeclaratory judgment of non-infringement be dismissed with prejudice. See id. TheManufacturers do not agree to these two proposals. The Manufacturers will agree to dismisswithout prejudice their counterclaims for a declaratory judgment of non-infringement.

2. What The Jury Should Be ToldThe Manufacturers believe that the jury should simply be told by the Court during

the liability phase that it is only being asked to determine the validity of the claims at issue.Rambus counter-proposes that the jury shall be instructed as to which specific products havebeen found to infringe which specific patent claims. See Dec. 29, 2008 Email at para. 6. The

jury need not be told, and should not be told, during its determination of validity that theManufacturers are not contesting infringement. Infringement is simply not relevant to thevalidity determination, and permitting Rambus to refer to or argue regarding infringement wouldunfairly prejudice the Manufacturers by inviting the jury to consider that irrelevant proceduralposture. Rambus further maintained during the parties December 24 meet and confer thatRambus should be able to argue that the Manufacturers products infringe as an element of Rambuss proof of the commercial success of its purported inventions for purposes of secondaryconsiderations of non-obviousness. However, as the Manufacturers explained to Rambus, if Rambus is permitted to put on evidence of commercial success, 2 the Court can instruct the jury,

2 Whether Rambus will be able to put forth any evidence of commercial success is now in doubtin light of the Courts Order On The Manufacturers Daubert Motion No. 1 To PrecludeTestimony Of Robert Murphy On Secondary Considerations Of Non-Obviousness, in which theCourt precluded Mr. Murphy, Rambuss sole proposed expert witness on commercial success,



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with appropriate safeguards, that for purposes of determining commercial success, it shouldassume that the Manufacturers products practice the claims at issue.

3. The Record On Appeal

The Manufacturers believe, and explained to Rambus during the December 24meet and confer, that the record submitted by the parties in connection with Rambuss summary

judgment motions is adequate for resolving infringement issues. That record identifies the issuesthat are dispositive of the infringement issue, including how the claim constructions wouldrender the accused products infringing or non-infringing and what non-infringement contentions

by the Manufacturers are in question. See Howmedica , 540 F.3d at n.3. Cf. Jang v. BostonScientific Corp. , 532 F.3d 1330 (Fed. Cir. 2008). Rambus has counter-proposed that thesummary judgment record be supplemented by Mr. Murphys reports regarding infringement andsuch other evidence as Rambus may choose to submit as part of an offer of proof. See Dec. 29,2008 Email at paras. 1 and 4. The Manufacturers disagree. The record developed on summary

judgment included expert declarations on the issues on which the Court entered summary judgment. If an additional record is to be made by Rambus, that would trigger the need for aresponse by the Manufacturers. There is no justification for post-summary judgmentsupplementation of the record. In addition, no offer of proof is necessary when infringement isno longer contested. In any event, it is unclear how any of the parties would be permitted tosupplement, at trial, any additional evidence on infringement issues that have been decided on

summary judgment or mooted by the Courts claim construction rulings.3

II. Order of the Liability and Damages Phases at the January 2009 Trial

At the September 24, 2008 hearing, the Court tentatively ruled that the January2009 Trial be separated into a liability phase and a damages phase, where liability would be tried

from testifying to the non-technical aspects of commercial success and from expressing anopinion that the inventions enjoyed commercial success. See Order at 8, 9-10.

3 In addition, Rambus counter-proposes that a final order adjudicating infringement will be based

on, among other things, Rambuss factual submissions (i.e.

, Mr. Murphys reports regardinginfringement and such other evidence as Rambus may choose to submit). However, Rambusfurther counter-proposes that [a]n appeal with regard to this finding of infringement can betaken only to the extent the finding depends upon the claim construction order, the November 24,2008 Order, or both. See Dec. 29, 2008 Email at para. 1. Rambuss proposal would bar anappeal that addresses the additional factual submissionseven though the Court has not had anopportunity to address the additional factual submissions on the merits. The Manufacturerscannot agree to Rambuss counter-proposal.



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first and then, if necessary, damages would be tried to the same jury immediately followingliability, with willfulness tried to the Court after damages. See Sept. 24, 2008 Tr. at 4, 5, 30. Inaddition, the Courts December 4, 2008 Order further contemplates separate liability anddamages phases since the parties pretrial submissions with respect to willfulness are not duebefore the beginning of the trial on infringement and validity, but rather are due within ten daysof the end of the damages portion of the trial. See Dec. 4, 2008 Order Memorializing WillfulnessProcedures at 2.

Rambus has argued, and maintained during the December 24 meet and conferwith the Manufacturers, that liability and damages should not be separate phases. In the event

that the two are separate phrases and in light of the Manufacturers proposal to not contestinfringement, Rambus counter-proposes that damages should be tried before liability. See Dec.29, 2008 Email at para. 5. The Manufacturers believe that issues of judicial economy andprejudice against the Manufacturers require that liability and damages be tried in separate phasesand that liability, even if only on the issue of validity, should be tried prior to damages.

Judicial economy would be served by separately trying liability from damages.First, such a separation would simplify the number and complexity of issues that the jury wouldneed to address. See, e.g. , Ciena Corp. v. Corvis Corp. , 210 F.R.D. 519, 521 (D. Del. 2002)([B]ifurcation might enhance jury decision making in two ways: (1) by presenting the evidencein a manner that is easier for the jurors to understand, and (2) by limiting the number of legal

issues the jury must address at any particular time.); see also Troncoso v. Martin Archery, Inc. ,127 F.R.D. 190 (E.D. Wash. 1989) (separating trial into three stagesinfringement, validity andenforceability, and damages). Second, such a separation can be easily made. See, e.g. ,Princeton Biochemicals, Inc. v. Beckman Instruments, Inc. , 180 F.R.D. 254, 256 (D.N.J. 1997)(The trial of the damages question in [a patent infringement suit] is often difficult andexpensive, while being easily severed from the trial of the questions and validity andinfringement of the patent. (citing Smith v. Alyeska Pipeline Serv. Co. , 518 F. Supp. 977, 982-83 (D. Del. 1982))). 4

4 Rambus may argue that damages should not be separated from liability because Rambussevidence of secondary considerations of non-obviousness ( i.e. , commercial success) overlapswith its damages-related evidence. However, this argument fails because the minimal overlap, if Rambus is permitted to present evidence relating to commercial success at all, does not outweighthe judicial economy of separating the phases. See Paine Webber, Jackson & Curtis, Inc. v.

Merrill Lynch, Pierce, Fenner & Smith, Inc. , 587 F. Supp. 1112, (D. Del. 1984) (The questionof commercial success is not ordinarily determined by a detailed analysis of exhaustive andintricate financial data, such as is required for proof of damages, but rather whether the claimed



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It is apparent from the parties briefing related to the Manufacturers Motions forSeparate Patent Trials and To Stay the Patent Trial that complicated issues are involved for bothliability and damages. Even without infringement-related issues, the invalidity issues remaincomplex. Specifically, the technology at issue in this litigation, the state of the art and theknowledge of one of ordinary skill at the pertinent time, and the sufficiency of the disclosures inthe original 1990 patent application are dense subject matters. Similarly, the damages issues arecomplex and multi-faceted. The damages phase will include presentations from all fourManufacturers regarding each Manufacturers unique hypothetical negotiation date; the facts andcircumstances that inform each Manufacturers hypothetical negotiation; each Manufacturersexperts methodologies, analyses, and conclusions; each Manufacturers different criticisms of

the opinions with respect to that Manufacturer by Rambuss damages expert; and eachManufacturers sets of sales data. Indeed, the damages phase is so complicated that the structureof this phasesuch as the whether all the Manufacturers will present their evidence in seriesfollowed by one jury deliberation on damages or whether one Manufacturer will present itsdamages evidence followed by a jury deliberation on damages for that Manufacturerhas notyet been determined.

Rambus argues that trying damages firstbefore validity in a validity-onlyliability trialwould be consistent with the trial protocol followed in Hynix I . See Dec. 29, 2008Email at para. 5. That argument ignores what was actually tried first in Hynix I by Rambusinfringement and damages, not damages alone. Thus, Rambuss argument that the January 2009

Trial should be consistent with the Hynix I Trial is inapt.

Judicial economy is further served by trying liability prior to trying damages.Indeed, there would be no need for a damages trial if the jury finds that the claims-at-trial areinvalid. See, e.g. , Princeton , 180 F.R.D. at 256 (A preliminary finding on the question of liability may well make unnecessary the damages inquiry, and thus result in substantial saving of time of the Court and reduction of expense to the parties.) (quoting Smith , 538 F. Supp. at 983);see also Gen. Patent Corp. v. Hayes Microcomputer , Case No. SA CV07-429-GLT ANX, 1997WL 1051899, at *1 (C.D. Cal. Oct. 20, 1997) (If the patents are found invalid or unenforceablethere will be no need to resolve the infringement and damages claims.). Moreover, if only someof the claims are determine to be valid, the analysis employed in the damages trials will be

affected. Thus, it makes no sense to reorder the phases so that damages would be tried prior toliability, or to assume that the only possible results are that all or none of the Asserted Claimswill be held invalid.

invention is, broadly speaking, an accepted product and a big seller.); see also Princeton Biochemicals, Inc. v. Beckman Instruments, Inc. , 180 F.R.D. 254, 256 (D.N.J. 1997) (same).



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The prejudice to the Manufacturers that was articulated in ManufacturersMotions for Separate Patent Trials and To Stay the Patent Trial not only supports separatedamages trials but also supports damages trials separate from liability. Indeed, if liability anddamages were tried together, the only recourse regarding jury deliberations would be for the juryto consider validity and damages regarding all of the Manufacturers in one deliberation. Thisdoes not resolve the prejudice to the Manufacturers, as the Court sought to do by separatingliability and damages (and where the Manufacturers further proposed to parse the damages phaseinto separate damages trials).

Rambuss suggested trial of damages before liability could further prejudice the

Manufacturers due to the significant risk that, if the jury is asked to evaluate damages first, it willassume (or tend to assume) that liability, if tried later, is already a forgone conclusion.

III. Order of Proof at the January 2009 Trial

If the Court adopts the Manufacturers proposal and determines that infringementwill not be contested at trial, the Manufacturers bear the burden of proof on the only remainingliability issue. There is no question that the party with the burden of proof typically presentsfirst. Anheuser-Busch, Inc. v. John Labatt Ltd. , 89 F.3d 1339, 1344 (8th Cir. 1996) (Ordinarily,the trial court extends the privilege of opening and closing the case to the party that has theburden of proof.) (citing Martin v. Chesebrough-Ponds, Inc. , 614 F.2d 498, 501 (5th Cir.

1980));Fresenius Med. Care Holdings, Inc. v .Baxter Intl, Inc.

, Case No. C 03-01431 SBA(EDL), 2006 WL 1646110, at *2 (N.D. Cal. 2006) (Since it is Fresenius that bears the burden of invalidity, the most critical issue in this case, it is proper for Fresenius to present its evidencefirst at trial.); Ericsson Inc. v. Harris Corp. , Case No. CIV A3:98CV2903D, 1999 WL 604827,at *2 (N.D. Tex. 1999) (A court normally will not realign the parties from their originaldesignations unless the plaintiff no longer retains the burden to prove at least one of its claims orif subsequent events in the case significantly shift the ultimate burden of proof from the plaintiff to the defendant.). If liability and damages are separated, then the Manufacturers should beallowed to present their case first during opening statements, the presentation of evidence, andclosing arguments during the liability phase.

IV. Proposal by Micron, Samsung, and Hynix Regarding the Two Remaining LiabilityTrials

Rambus did not raise any specific concerns in the December 24 meet and conferregarding the proposal made by Micron, Samsung, and Hynix at the December 19 hearing and intheir December 22 letter to Rambus (Exhibit B) that the two remaining liability trials bereconfigured into a first DDR2+ trial (including Rambuss claims relating to DDR2 and certainsubsequent related products as to Micron, Samsung, and Hynix) in January 2009 in whichMicron would try its invalidity case against Rambus and Samsung and Hynix would agree



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(subject to the reservation of rights) to be bound by the jurys verdict (and of course, Rambuswould be bound as to Samsung and Hynix) and a second trial in which Rambuss DDR2+ claimsas to Nanya would be included with Rambuss SDR SDRAM and DDR SDRAM claims as toSamsung and Nanya.

However, in its December 29, 2008, Rambus makes two counter-proposals: thatthe Courts final order determining infringement will also extend to the SDR and DDR productsof Samsung and Nanya that are accused in this case and that all of the Manufacturers shallremain as parties in the upcoming trial. See Dec. 29, 2008 Email at paras. 2, 8. By making acounter-proposal that all of the Manufacturers remain parties in the upcoming trial, Rambus has

rejected outright, without explanation, the proposal made by Micron, Samsung, and Hynix. Thatis, Micron, Samsung, and Hynix proposed that the liability portion of the January 2009 Trialaddress Rambuss DDR2+ claims against Micron only and that, if necessary, damages will betried against Micron, Samsung, and Hynix seriatim immediately after the liability verdict isreturned. See Dec. 22, 2008 Letter. Micron, Samsungs and Hynixs proposal was intended tostreamline the validity trial and make it less confusing to the jury. Accordingly, Micron,Samsung, and Hynix do not agree with Rambuss so-called counter-proposal that allManufacturers remain as parties to the liability phase of the January Trial.

V. Conclusion 5

It is clear from Rambuss December 29, 2008 email that it does not agree to thetrial management proposal outlined in the Manufacturers letters of December 19 and 22, thediscussion at the December 19 hearing, and this letter. The Manufacturers believe that theirproposals can significantly streamline the resolution of the remaining disputes between theparties and result in judicial efficiency and reduction of complexity for the jury. Moreover, theManufacturers believe that the Court may, within its discretion, and should, in the interests of efficiency and justice, order the structure and conditions requested by the Manufacturers. TheManufacturers look forward to further discussions regarding these proposals at the January 6hearing, and share the Courts and Rambuss concerns that the structure of the January trial befinalized at the earliest possible opportunity.

Sincerely,

5 Rambus also made a counter-proposal regarding Rambuss access to trial witnesses employedby or under the control of one or more of the Manufacturers. See Dec. 29, 2008 Email at para. 7.The Manufacturers believe that this counter-proposal is unrelated to the trial managementproposals that have been made and suggest that the parties meet and confer regarding productionof witnesses for trial independent of the issues raised here.



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___/s/ Steven Cherensky___Steven Cherensky

Counsel for Samsung Electronics Co., Ltd.,Samsung Electronics America, Inc., SamsungSemiconductor, Inc., and Samsung AustinSemiconductor, L.P.

cc: Gregory P. Stone (Email: [email protected])

Theodore G. Brown (Email: [email protected])Ken Nissly (Email: [email protected])Bob Freitas (Email: [email protected])Vickie Feeman (Email: [email protected])Jared Bobrow (Email: [email protected])Elizabeth Weiswasser (Email: [email protected])Sven Raz (Email: [email protected])Matthew D. Powers (Email: [email protected])Robert S. Berezin (Email: [email protected])Matthew Antonelli (Email: [email protected])


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