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IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA – SAN JOSE DIVISION RAMBUS, INC., Plaintiff, v. HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA INC., SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P., NANYA TECHNOLOGY CORPORATION, NANYA TECHNOLOGY CORPORATION U.S.A., Defendants. Case No. C 05-00334 RMW SAMSUNG’S MOTION FOR SEPARATE PATENT TRIALS AND TO STAY THE PATENT TRIAL PENDING RESOLUTION OF THE HYNIX I APPEAL AND THE RE-EXAMINATIONS, AND MEMORANDUM IN SUPPORT Hearing Date: Time: Courtroom: Judge: September 19, 2008 9:00 a.m. 6 Hon. Ronald M. Whyte

RAMBUS, INC., Plaintiff, v. Case No. C 05-02298 RMW SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG AUSTIN SEMICONDUCTOR, L.P., Defendants.

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TABLE OF CONTENTS

Rambus’s Patent Infringement Claims Against Samsung Should Be Tried Separately............................................................................................................................ 7 A. Consolidation Is Permitted Only if a Consolidated Trial Would Be Fair and Convenient, Would Not Prejudice the Parties, and Would Serve Judicial and Litigant Economy ............................................................................................. 7 Separate Patent Trials Are Required ....................................................................... 8 1. The Hynix I Verdict Will Substantially Prejudice Samsung’s Ability to Defend Against Rambus’s Patent Infringement Claims ......................... 8 A Consolidated Trial Would Confuse the Jury and Prejudice Samsung ...................................................................................................... 9 A Consolidated Patent Trial Would Risk Admission of Prejudicial Evidence That Is Inadmissible Against Samsung ..................................... 11 A Consolidated Patent Trial Would Unfairly Support a Prejudicial Primary Trial Theme by Rambus.............................................................. 12

The Patent Infringement Claims Against Samsung Should be Stayed ............................. 13 A. B. The Balancing of the Equities Supports the Issuance of a Stay............................ 13 A Stay of Rambus’s Patent Infringement Claims Against Samsung Pending the Resolution of the Hynix I Appeal and the Re-Examinations Would Serve Judicial Economy and Further Efficient Resolution of the Relevant Issues ..................................................................................................................... 14 Prematurely Proceeding to Trial on Patent Infringement Would Prejudice Samsung and a Stay Would Not Harm Rambus in Any Real Way ...................... 16

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TABLE OF AUTHORITIES

ASCII Corp. v. STD Entm't. USA, Inc., 844 F.Supp. 1378 (N.D. Cal. 1994)................................ 13 Acco Brands, Inc., v. ABA Locks Mfrs. Co., Ltd., 501 F.3d 1307 (Fed. Cir. 2007) ........................ 9 Angelo v. Armstrong World Indus., Inc., 11 F.3d 957 (10th Cir. 1993) ..................................... 6, 7 Astec Am., Inc. v. Power-One, Inc., No. 6:07-cv-464, 2008 U.S. Dist. LEXIS 55100 (E.D. Tex. July 15, 2008) ....................................................................................................................... 14 Barr Labs. v. Abbott Labs., 978 F.2d 98 (3d Cir. 1992) ............................................................. 7, 8 CMAX, Inc. v. Hall, 300 F.2d 265 (9th Cir. 1962)........................................................................ 10 City of Harper Woods Employees Ret. Sys. v. ATX, Inc., No. C 04-04362 MJJ, 2005 WL 318813 (N.D. Cal. Feb. 7, 2005)..................................................................................................... 5 Colt Defense LLC v. Heckler & Koch Defense, Inc., No. 2:04 cv 258, 2004 U.S. Dist. LEXIS 28690 (E.D. Va. Oct. 22, 2004) .......................................................................................... 7 Commc'ns., Inc. v. TranSwitch Corp., 303 F. Supp. 2d 1027 (N.D. Cal. 2003) ............................. 4 In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.Supp.2d 1022 (N.D. Cal. 2005)....... 15 E.E.O.C. v. HBE Corp., 135 F.3d 543 (8th Cir. 1998) ................................................................... 5 Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983) ................................................... 14 Henderson v. Prado, Nos. C-05-0234............................................................................................. 5 Hirst v. Gertzen, 676 F.2d 1252 (9th Cir. 1982) ............................................................................. 8 Houseman v. U.S. Aviation Underwriters, 171 F.3d 1117 (7th Cir. 1999)..................................... 5 Hynix Semiconductor Inc., v. Rambus Inc., No. CV-00-20905-RMW, 2006 WL 2458761 (N.D. Cal. Aug. 22, 2006)............................................................................................................. 10 Incumaa v. Ozmint, 507 F.3d 281 (4th Cir. 2007) ........................................................................ 12 Jinro Am. Inc. v. Secure Invs., Inc., 266 F.3d 993 (9th Cir. 2001) ............................................... 12 Kittel v. First Union Mortgage Corp., 303 F.3d 1193 (10th Cir. 2002) ....................................... 12 Korea Wheel Corp. v. JCA Corp., No. C05-1590C, 2005 WL 3454335 (W.D. Wash. Dec. 16, 2005) ....................................................................................................................................... 12 Landis v. N. Am. Co., 299 U.S. 248 (1936)............................................................................. 10, 11 Lentek Int’l, Inc. v. Sharper Image Corp., 169 F.Supp.2d 1360 (M.D. Fla. 2001)....................... 14
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Los Angeles Mem. Coliseum Comm'n v. Nat’l Football League, 634 F.2d 1197 (9th Cir. 1980) ............................................................................................................................................. 15 Malcolm v. Nat’l Gypsum Co., 995 F.2d 346, Fed. R. Civ. P. 42 (b) ............................................. 5 MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556 (E.D. Va. 2007) ............................ 12, 13 Quintanilla v. City of Downey, 84 F.3d 353 (9th Cir. 1996) .......................................................... 6 RULES Fed. R. Civ. P. 42(b) ....................................................................................................................... 5

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NOTICE OF MOTION

PLEASE TAKE NOTICE that on September 19, 2008, at 9:00 a.m., or as soon thereafter as the matter may be heard by the Courts, Defendants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., and Samsung Austin Semiconductor, L.P. (collectively, “Samsung”) will and hereby do move this Court for an order that Rambus’s patent infringement claims against Samsung in Rambus Inc. v. Hynix Semiconductor Inc., et al., Case No. C 05-00334 RMW and Rambus Inc. v. Samsung Semiconductor Co., Ltd., et al., Case No. C 05-02298 RMW will be tried separately from the patent infringement claims that Rambus has asserted against the Hynix, Micron, and Nanya entities in those two cases as well as in Rambus’s suit against Micron, Rambus Inc. v. Micron Technology, Inc., et al., Case No. C 0600244 RMW. Samsung also moves the Court for a stay of the proceedings against Samsung pending resolution of the anticipated appeal of the forthcoming final judgment in Hynix Semiconductor Inc., et al. v. Rambus Inc., Case No. C 00-20905 RMW (“Hynix I”) and the pending reexaminations which have been granted to date on multiple patents-in-suit. These requests are based on this Notice of Motion, Samsung’s Motion for Separate Patent Trials and to Stay the Patent Trial Pending Resolution of the Hynix I Appeal and the ReExaminations, and Memorandum in Support, the pleadings and papers on file in these actions, and any other matters presented to the Court at the time of hearing. WEIL, GOTSHAL & MANGES, LLP

By: /s/ David J. Healey David J. Healey MATTHEW D. POWERS (Bar No. 104795) Email: matthew.powers@weil.com EDWARD R. REINES (Bar No. 135930) Email: edward.reines@weil.com WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065
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Telephone: (650) 802-3000 Facsimile: (650) 802-3100 DAVID J. HEALEY (admitted pro hac vice) Email: david.healey@weil.com ANITA E. KADALA (admitted pro hac vice) Email: anita.kadala@weil.com WEIL, GOTSHAL & MANGES LLP 700 Louisiana, Suite 1600 Houston, TX 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 Attorneys for Defendants SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., and SAMSUNG AUSTIN SEMICONDUCTOR, L.P.

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MOTION AND MEMORANDUM OF POINTS AND AUTHORITIES Rambus’s patent claims against Samsung must be tried separately under Federal Rule of Civil Procedure 42(b) to avoid undue prejudice to Samsung and provide Samsung with a fair and impartial trial. First, if the patent infringement claims are consolidated, Rambus will no doubt

seek to admit the Hynix I jury verdict of validity and infringement, which will inevitably substantially prejudice Samsung’s ability to defend against Rambus’s patent infringement allegations against Samsung. Second, fundamental differences in the manufacturers’

circumstances make a fair and impartial trial impossible if the patent claims are tried on a consolidated basis due to the distinct relationship of Samsung and its impact on remedies and willfulness. Third, a consolidated patent trial would prejudice Samsung because Rambus is likely to offer evidence that is possibly admissible against another manufacturer but inadmissible and highly prejudicial against Samsung, creating otherwise unnecessary and prejudicial evidentiary disputes. Fourth, a consolidated trial would unfairly validate Rambus’s portrayal of Samsung requests that the Court try the

the manufacturers as Rambus’s collective “Goliath.” patent infringement claims separately.

Samsung also seeks a stay of the January trial setting.

A stay pending resolution of the

expected appeal to the Federal Circuit in Hynix I will further efficiencies and judicial economy in resolving Rambus’s patent infringement claims against Samsung. In addition, Samsung has

filed over the last two years several requests for inter partes re-examination and a request for ex parte re-examination of Rambus’s patents. Detailed office action has been received rejecting all

claims of five of the patents-in-suit. Other re-examination proceedings have found substantial new questions of patentability. Because the same examiner is handling these other cases and

they are based on the same specification and involve overlapping issues, similar office actions are expected. If the Federal Circuit decides in favor of Hynix on its claim construction or written description challenges, a patent trial would likely be unnecessary. And even if the Federal Circuit decides in favor of Rambus, its rulings on claim construction, written description, and obviousness, although not binding on Samsung, would certainly influence subsequent
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proceedings in this litigation.

Likewise, the re-examinations could entirely moot the case

regardless of the Federal Circuit’s actions: the detailed office action on five of the patents-in-suit demonstrates a significant likelihood that Rambus’s claims will not survive re-examination (especially in their current form). Rambus would not suffer any substantial prejudice from a stay because it is not a manufacturer or seller of product, but rather licenses its technology, and thus, money damages is its real interest, which may be sought whenever the stay is lifted. BACKGROUND When the Court consolidated for trial the manufacturers’ claims and counterclaims against Rambus that arose from Rambus’s JEDEC misconduct, it explained that it would be “premature to decide whether all the patent claims in all three of the 05-06 Cases should be coordinated for purposes of trial.” June 25, 2007 Further Case Mngmt. Order, Section V (‘334 Docket Entry 222) (stating that the January 19, 2009 patent trial date was reserved for either “the trial or first trial (if more than one)” (emphasis added); see also Jt. Case Mngmt. Order (Apr. 24, 2007) (‘334 Docket Entry 174) at §1.b., Attachs. C, D (referring to “5-06 Patent Trial(s))”) (emphasis added). The Court returned the issue for the first time a year later, on July 16, 2008, when it issued its Patent Trial Scheduling Order and stated that its schedule “proceeds on the expectation of holding a consolidated trial.” Patent Trial Scheduling Order (‘334 Docket Entry 1963). The Court also

invited the parties to file a motion requesting severance by August 1, 2008 for good cause. Id. ARGUMENT I. RAMBUS’S PATENT INFRINGEMENT CLAIMS AGAINST SAMSUNG SHOULD BE TRIED SEPARATELY. A. Consolidation Is Permitted Only if a Consolidated Trial Would Be Fair and Convenient, Would Not Prejudice the Parties, and Would Serve Judicial and Litigant Economy.

A court’s discretion to consolidate claims against different defendants for trial is limited by the overriding consideration of achieving a fair and impartial trial. 26 interest in judicial convenience against the potential for delay, [jury] confusion, and prejudice 27 caused by consolidation.” Commc’ns., Inc. v. TranSwitch Corp., 303 F.Supp.2d 1027, 1028 28
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(N.D. Cal. 2003); see also Malcolm v. Nat’l Gypsum Co., 995 F.2d 346, 350 (“The benefits of efficiency can never be purchased at the cost of fairness.”) (2d Cir. 1993); FED. R. CIV. P. 42(b) (permitting deconsolidation of an action for trial for convenience, avoidance of prejudice, and economy). This Court has explained that “[c]onsiderations of convenience and economy must

yield to a paramount concern for a fair and impartial trial.” Henderson v. Prado, Nos. C-050234 VRW, C-05-4220 VRW 2007 WL 1229330, at *1 (N.D.Cal. Apr. 24, 2007); see also City of Harper Woods Employees Ret. Sys. v. ATX, Inc., No. C 04-04362 MJJ, 2005 WL 318813, at *1 (N.D. Cal. Feb. 7, 2005) (“a court cannot permit the benefits of convenience and judicial economy to outweigh the concern for a fair and impartial trial.”). Although Federal Rule of Civil Procedure 42(a) allows consolidation of “actions . . . involv[ing] a common question of law or fact” to further judicial convenience, in the interest of ensuring that parties receive a fair and impartial trial, Rule 42(b) permits a court to order separate trials of claims in consolidated actions “for convenience, to avoid prejudice, or to expedite and economize.” FED. R. CIV. P. 42(b). Under the plain language of Rule 42(b), any of these

factors—convenience, avoidance of prejudice, or furtherance of efficiency and economy—justify a separate trial. See, e.g., Houseman v. U.S. Aviation Underwriters, 171 F.3d 1117, 1121 (7th

Cir. 1999) (“only one of these criteria . . . need be met before a court can order separation”); see also E.E.O.C. v. HBE Corp., 135 F.3d 543, 551 (8th Cir. 1998) (“[c]onsolidation is inappropriate . . . if it leads to inefficiency, inconvenience, or unfair prejudice to a party.”). B. Separate Patent Trials Are Required.

Consolidating the patent infringement claims for trial would substantially prejudice Samsung. 1. The Hynix I Verdict Will Substantially Prejudice Samsung’s Ability to Defend Against Rambus’s Patent Infringement Claims.

In Hynix I, Rambus obtained a jury verdict against Hynix that various Farmwald/Horowitz patents are not invalid and were infringed by Hynix. Decl. of Melanie Sarwal in Supp. of

Samsung’s Mot. for Separate Patent Trials and to Stay the Patent Trial Pending Resolution of the Hynix I Appeal and the Re-Examinations, and Memorandum in Support (“Sarwal Decl.”), Ex. 1
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[Special Jury Verdict Form, Hynix I].

Rambus is asserting those same patents and claims See Sarwal Decl., Ex. 2

against the other manufacturers in these subsequent proceedings.

[Rambus’s Jul. 20, 2007 Supp. Disclosure of Asserted Claims and Infringement Contentions] at 3. Rambus will no doubt seek to introduce the Hynix I verdict during the trial currently set for

January, to attempt to demonstrate that its patents are not invalid and infringed, as well as evidence of a reasonable royalty. But the verdict is inadmissible against Samsung, and

admitting it into evidence in a consolidated trial, even with a limiting instruction, would infect the proceedings and deprive Samsung of a fair trial on the merits because a jury cannot be expected to compartmentalize such significant evidence and consider it only in a limited, albeit instructed, manner. In this circumstance, separate trials are warranted to avoid the possibility that evidence admissible only on a certain issue may prejudice a party in the minds of the jury on other issues. See, e.g., Quintanilla v. City of Downey, 84 F.3d 353, 356 (9th Cir. 1996) (ordering separate trials because evidence admissible against only one defendant was potentially prejudicial to another defendant and confusing to the jury); Angelo v. Armstrong World Indus., Inc., 11 F.3d 957, 965 (10th Cir. 1993) (ordering separate initial trial of certain claims to avoid introduction of evidence that would be prejudicial to those claims but necessary for the other claims). 2. A Consolidated Trial Would Confuse the Jury and Prejudice Samsung.

Trying Rambus’s patent infringement claims against the manufacturers on a consolidated basis would be detrimentally confusing to the jury and prejudicial to Samsung. 21 A consolidated patent trial would present an unnecessary and prejudicial risk of jury 22 confusion on the issue of infringement, because the Samsung products that Rambus has accused 23 24 Given the large number of accused products and the substantial number of asserted patent claims 25 (currently 25), scattered among four different manufacturers, it would be extremely difficult and 26
1

of infringement are products distinct from the accused products of the other manufacturers.1

27 28

Sarwal Decl., Ex. 3 Rambus’s Apr. 3, 2006 Disclosure of Asserted Claims and Infringement Contentions (‘2298); Sarwal Decl., Ex. 4 [Rambus’s Feb. 23, 2007 Disclosure of Asserted Claims And Infringement Contentions (‘334 Action)]; Sarwal Decl., Ex. 2 [Rambus’s Jul. 20, 2007 Supp. Disclosure of Asserted Claims and Infringement Contentions].
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confusing for a jury to maintain distinctions between the manufacturers’ products, track which claims each product allegedly infringes, and be clear which features are at issue. As a result, consolidation would unnecessarily create the risk that the jury will consider evidence of alleged infringement by one manufacturer’s product in relation to another manufacturer’s entirely different product. The inclusion of these myriad products in a consolidated trial would be

unduly prejudicial to Samsung. See, e.g., Barr Labs. v. Abbott Labs., 978 F.2d 98, 115 (3d Cir. 1992) (using separate trial to eliminate presentation of lengthy evidence and simplify evidence for jury); Angelo, 11 F.3d at 964 (same); see also, e.g., Colt Defense LLC v. Heckler & Koch Defense, Inc., No. 2:04 cv 258, 2004 U.S. Dist. LEXIS 28690, at *15 (E.D. Va. Oct. 22, 2004) (severing trademark infringement claims against two defendants when the same trademarks were at issue, but the products alleged to have infringed were not the same and the two defendants were unrelated because the court “perceive[d] a risk of prejudice to the defendants . . . [and] the possibility of jury confusion over the evidence required to prove these claims.”) Separate trials are also warranted because prejudicial jury confusion is inevitable on the issue of damages. Jury confusion in the area of damages evidence is very likely because of the In determining a reasonable

variety of factors and history in relation to each manufacturer.

royalty, the hypothetical license negotiation is typically assumed to occur when the accused infringer began to infringe. The timing of the hypothetical license negotiation for each of the

four manufacturers for some or all accused products will vary greatly, because the accused products for each manufacturer are different, distinct generations of products are at issue, and Samsung was for several years licensed by Rambus. For example, Samsung has a number of Finally, Samsung

different types of products that are not accused for any other manufacturer.

has a different hypothetical negotiation date of June 7, 2005 because it was licensed prior to that time (whereas other manufacturers who have been in litigation with Rambus since 2000 likely have much earlier hypothetical negotiation dates). Further, Samsung’s most favored licensee provisions are admissible and highly probative of how the hypothetical negotiation would be resolved, and this set of facts is likely to confuse the jury when presented in the context of four different manufacturers. See, e.g., Order Denying
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Rambus’s Mot. for Summ. J. on Samsung’s Counterclaims I, II, and III (Jul. 9, 2008), at 2-4, 7-8 (considering Samsung’s most favored licensee and renewal provisions and noting that “the MFL in Section 3.8 is difficult to interpret”), Samsung’s Opp. To Rambus’s Mot. for Summ. J. on Counts I-III of Samsung’s Counterclaims (Jun. 9, 2008) at 12-14, 18-24 (reviewing most favored licensee provision and renewal provisions). Samsung’s license rights also impact on willfulness,

as do its pending re-examination requests and the rulings to date on those requests. Given the complex nature of the case and the many products at issue for each manufacturer, it would be unnecessarily difficult for the jury to appropriately apply the various economic, market, historical, and licensing factors for the hypothetical license negotiations of each manufacturer. See, e.g., Barr Labs., 978 F.2d at 115 (separate trial of the issue of relevant product market enhanced juror comprehension of complex issue). The risk of prejudice to the Separate

manufacturers in the fact-determinative process is too great to permit consolidation.

trials are warranted in order to “simplif[y] the issues for the jury” and reduce the “danger of unnecessary jury confusion.” Hirst v. Gertzen, 676 F.2d 1252, 1261 (9th Cir. 1982). 3. A Consolidated Patent Trial Would Risk Admission of Prejudicial Evidence That Is Inadmissible Against Samsung.

Consolidation also would be prejudicial and unfair to Samsung because Rambus is likely, as it did in the Conduct Trial, to offer evidence that may be admissible against one manufacturer 18 but inadmissible and highly prejudicial as to Samsung. 19 Trial, disputes over evidence that may be admissible as to one defendant but inadmissible—and 20 highly prejudicial—as to others would also be a problem in a consolidated patent trial. The 21 resulting prejudice requires separate trials. See supra I.A.1. 22 Indeed, during the Conduct Trial, the Court admitted exhibits against Hynix that would be 23 inadmissible and prejudicial to other manufacturers. 24 6523 as evidence of Hynix’s beliefs but not as evidence of Micron or Nanya’s beliefs. 25 exhibit, an email from Mr. Tabrizi of Hyundai (Hynix) stated that the first five claims of U.S. 26 Patent S/N 5,995,443 (a Farmwald/Horowitz patent), if not invalid, covered “all DDR memories.” 27 3-5-08 Trial Tr. at 3964:21-3966:15. 28
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Based on the proceedings in the Conduct

For example, the Court admitted Exhibit This

Admission of this exhibit in a consolidated patent trial

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against Hynix on the issue of willfulness or the issue of damages or the issue of indirect infringement2 would be irreparably prejudicial to Samsung on indirect infringement, willfulness and damages. It is simply unrealistic to assume that the jury would be able to consider this

evidence only against Hynix and not against Samsung. Samsung should not have to defend against evidence that would not be admissible in a Samsung-only trial, and Samsung could not be expected to counter the jury’s inevitable consideration of such evidence, in some way, in relation to all the manufacturers. 4. A Consolidated Patent Trial Would Unfairly Support a Prejudicial Primary Trial Theme by Rambus.

Consolidation would prejudice Samsung’s ability to fairly present its case because the combined presence of all four manufacturers would permit Rambus to create the perception of the 11 manufacturers as a collective Goliath and unfairly subject Samsung to Rambus’s misplaced 12 argument. 13 company, e.g., Sarwal Decl., Ex. 6 2-4-08 Trial Tr. at 340:10-341:15, and emphasized during 14 opening and closing statements the size of the manufacturers by suggesting that the 15 manufacturers, collectively, sold hundreds of millions of dollars of DRAMs. Id. at 318:11-25; 16 Sarwal Decl., Ex. 7 [3-25-08 Trial Tr.] at 5958:20-22. Defendants should not be prejudiced with 17 exaggerated, damaging appearances that result from consolidation. For example, in Alvarado v. 18 FedEx Corp., the court severed the ten plaintiffs’ employment claims against FedEx, fearing that 19 the jury would “be presented with a ‘parade of horribles,’ in which the whole may very well be 20 greater than the sum of its parts.” Nos. C 04-00098 SI and C 04-0099 SI, 2006 WL 1465522, at 21 *1 (N.D. Cal. May 25, 2006) (citation omitted). Similarly, aggregating the manufacturers in this 22 case could create a false, and prejudicial, appearance of exaggerated wrong to Rambus. 23 Consolidation of the patent trial would unfairly benefit Rambus and deprive Samsung of a 24 fair and impartial trial by distorting the jury’s relative perception of the parties. 25 26 27 28
2

During the Conduct Trial, Rambus presented itself as a small and vulnerable

Any efficiencies

Indirect infringement requires proof of intent to infringe the patent, unlike direct infringement, and this email might be argued by Rambus to be evidence of intent of Hynix. See, e.g., Acco Brands, Inc., v. ABA Locks Mfrs. Co., Ltd., 501 F.3d 1307, 1313-14 (Fed. Cir. 2007).
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that could be achieved by trying the patent infringement claims on a consolidated basis cannot overcome the prejudice and potential for jury confusion represented by consolidation. II. THE PATENT INFRINGEMENT CLAIMS AGAINST SAMSUNG SHOULD BE STAYED. The Court should stay the proceedings as they relate to Rambus’s patent infringement claims pending the resolution of the anticipated Hynix I appeal and the multiple pending inter partes and ex parte re-examination requests and orders on those cases, because a stay would conserve the resources that the Court and the parties will expend—potentially needlessly—in litigating and resolving the substantial issues regarding alleged patent infringement and the various defenses to those claims. A. The Balancing of the Equities Supports the Issuance of a Stay.

The Court’s discretion to stay the patent infringement “is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); 11 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2901 (2d ed. 1995). Indeed, the Court has already recognized that it has discretion to stay this case in

order to promote economy of time and effort. Hynix Semiconductor Inc., v. Rambus Inc., No. CV-00-20905-RMW, 2006 WL 2458761, at *1-2 (N.D. Cal. Aug. 22, 2006) (citing CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). In determining considering a stay request, the Court weighs the competing interests: “the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.” Id. The relevant considerations—conservation of the Court’s

and litigants’ time and resources, simplification of issues, and potential hardships, see, e.g., Landis, 299 U.S. at 254-56—all support postponement of the patent trial. In Landis, the

Supreme Court emphasized that the judicial process must “adapt[]” to varying circumstances: because the proceedings involved “great issues . . . great in their complexity, great in their significance,” the fact that a decision in the other proceeding would “settle many [questions of
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law and fact] and simplify them all” justified a stay pending resolution of the other proceeding. Id. at 256. A stay of the proceedings against Samsung pending resolution of the expected appeal of the forthcoming final judgment in Hynix I and the re-examinations would promote judicial and litigant economy, simplify and clarify the issues, avoid the hardship to Samsung represented by trial of patent infringement claims before the Federal Circuit has the opportunity to resolve many of the relevant issues and the PTO can complete the re-examinations, and leave Rambus unharmed in any way cognizable in the stay calculus. B. A Stay of Rambus’s Patent Infringement Claims Against Samsung Pending the Resolution of the Hynix I Appeal and the ReExaminations Would Serve Judicial Economy and Further Efficient Resolution of the Relevant Issues.

There is undeniable substantial overlap in the issues of this litigation and Hynix I. Rambus acknowledges the overlap of issues and close relationship between this litigation and Hynix I. In its opening Markman brief, Rambus explained that “many disputed terms in [the 334

case] are common to Hynix I pending before this Court and/or to the Federal Circuit’s opinion in Infineon, both involving patents of the same ancestry as patents at issue here.” Pl.’s Opening Markman Br., filed Aug. 24, 2007, (‘334 Docket Entry 312) at 1:4-6; see also id. at 6:5-6 (“[T]he Manufacturers, including Hynix, dispute approximately twenty terms either common to Hynix I, or very similar to terms from Hynix I.”). Although holding that its claim constructions in Hynix

I are not preclusive on the same issues in this case, the Court construed nearly all claims common to Hynix I and this litigation identically. See Claim Construction Order (Jul. 10, 2008) (‘334 Docket Entry 1960). Although the Court has not yet entered a final judgment in Hynix I, all outstanding issues have been briefed and await decision and entry of final judgment. The issuance of a stay

pending the Federal Circuit’s decision in the Hynix I appeal could greatly simplify the issues in this litigation and even potentially eliminate the need for a patent trial. Issues presented in the Hynix I appeal may lead the Federal Circuit to revisit its claim construction in Infineon and reverse this Court’s claim construction rulings in Hynix I. If the Federal Circuit held in favor of
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Hynix on the claim construction, written description, or obviousness issues from Hynix I, the scope of the patent trial would be greatly reduced and certainly the parties’ approach to the trial would be altered. Even if the anticipated appeal were resolved in Rambus’s favor, the Federal

Circuit’s rulings on claim construction, written description, and obviousness—although not binding on Samsung—would certainly influence proceedings and arguments in this litigation.

And the Federal Circuit’s Hynix I decision will necessarily have to be reconciled with this Court’s holdings in this litigation; it is only a question of when that will occur and how much additional investment of resources by the parties and the Court will be required as a result. A stay of this

proceeding pending an appeal of Hynix I would clearly simplify the issues before the Court and the jury, further judicial economy, and avoid unnecessarily duplicative litigation.3 The Court should also stay the patent infringement proceedings based on the pending reexaminations. See, e.g., MercExchange, L.L.C. v. eBay, Inc., 500 F.Supp.2d 556, 563 (E.D. Va. 2007) (granting stay of proceedings as to one patent when the PTO had issued interim office action finding claims of that patent invalid over prior art). A stay pending re-examination

permits a district court to “avoid inconsistent results, narrow the issues, obtain guidance from the PTO, or . . . avoid the needless waste of judicial resources, especially if the evidence suggests that the patents-in-suit will not survive reexamination.” Id. (citing, inter alia, Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983)). Indeed, this Court has recognized the

“liberal policy in favor of granting motions to stay proceedings pending the outcome of USPTO reexamination or reissuance proceedings.” ASCII Corp. v. STD Entm’t. USA, Inc., 844 F.Supp. 1378, 1381 (N.D. Cal. 1994); see also MercExchange, 500 F.Supp.2d at 563-64 (“[a] review of relevant caselaw indicates that district courts routinely grant pre-trial stays when PTO See, e.g., Incumaa v. Ozmint, 507 F.3d 281, 285 (4th Cir. 2007) (noting that court stayed appeal to await the Supreme Court’s decision on a common issue); Kittel v. First Union Mortgage Corp., 303 F.3d 1193, 1194 (10th Cir. 2002) (staying appeal pending a potentially dispositive state-court ruling to avoid issuing a superceded decision and noting that “any opinion we issue . . . may end up akin to a prohibited advisory opinion”); Korea Wheel Corp. v. JCA Corp., No. C05-1590C, 2005 WL 3454335, at *2 (W.D. Wash. Dec. 16, 2005) (concluding that a stay of confirmation proceedings was appropriate because pending arbitration proceedings might modify the original awarded); see also Jinro Am. Inc. v. Secure Invs., Inc. 266 F.3d 993, 998 (9th Cir. 2001) (explaining that separate trials would permit deferral of costly and possibly unnecessary proceedings pending resolution of potentially dispositive issues).
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reexaminations are underway and evidence suggests that the patents-in-suit may not survive reexamination.”) (citing cases). The multiple pending re-examinations show that it is likely that all or at least some of the pending claims will not survive the re-examination process or will at least not survive in their present form. See Sarwal Decl., Ex. 8 [office action on the ‘020 patent] (rejecting all claims);

Sarwal Decl., Ex. 9 [office action on the ‘120 patent] (rejecting all claims); Sarwal Decl., Ex. 10 [office action on the ‘863 patent (rejecting all claims); Sarwal Decl., Ex. 11 [office action on the ‘184 patent (rejecting all claims); Sarwal Decl., Ex. 12 [office action on the ‘916 patent (rejecting all claims). It would be inefficient and unfair to proceed to a patent infringement trial when

multiple PTO actions suggest that the claims will not likely survive at all, especially in their current form and scope. A stay would give the Court the benefit of the PTO’s guidance and

potentially narrow the issues for trial, and is particularly appropriate given that the claims are in the early discovery stage. C. Prematurely Proceeding to Trial on Patent Infringement Would Prejudice Samsung and a Stay Would Not Harm Rambus in Any Real Way.

Samsung will be prejudiced by preparing for and litigating a patent trial before the Hynix I appeal is decided and the re-examinations are completed. Indeed, “any change in the claim

construction order from the prior litigation . . . could have a dramatic effect on how the parties conduct discovery and prepare for trial.” Astec Am., Inc. v. Power-One, Inc., No. 6:07-cv-464, 2008 U.S. Dist. LEXIS 55100, at *13-14 (E.D. Tex. July 15, 2008). When disputed patent claim terms are being considered in an appeal, the threat of irreparable harm without a stay is recognizable. See, e.g., id. at *6, *13 (granting stay of case based on appeal in earlier case challenging claim construction and other rulings on the same patents when the movant argued that “a stay would ensure the parties avoid the unnecessary risks of proceeding through discovery and trial only to have these rulings altered by the Federal Circuit, thereby potentially forcing the parties to start over in both cases”). And the denial of a

stay pending re-examination creates the irreparable harm of defending against patent infringement claims without the recognized benefit of the resolution of the re-examination proceedings. See
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Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir. 1983) (“One purpose of the reexamination procedure is to eliminate trial of that issue (when the claim is canceled) or to facilitate trial of that issue by providing the district court with the expert view of the PTO (when a claim survives the reexamination proceeding).”); see also Lentek Int’l, Inc. v. Sharper Image Corp., 169 F.Supp.2d 1360, 1362 (M.D. Fla. 2001) (“As several courts, [including the Federal Circuit] have noted, the sponsors of the patent reexamination legislation clearly favored the liberal grant of stays by the district courts when patents are submitted for reexamination as a mechanism for settling disputes quickly and less expensively and for providing the district courts with the expertise of the patent office.”). In contrast to the harm that Samsung would suffer in the absence of a stay, a stay would not prejudice Rambus. Although a stay would represent some delay in these proceedings, the

delay of a potential money damages award—which is what Rambus seeks as its remedy4—if Rambus was ultimately successful does not constitute a recognizable irreparable harm in the stay equation. See, e.g., Los Angeles Mem. Coliseum Comm’n v. Nat’l Football League, 634 F.2d 1197, 1202 (9th Cir. 1980). A stay would not prejudice Rambus because its ability to seek money damages would not be impaired, only postponed until after the stay is lifted. And a stay pending the re-examinations does not represent any “clear tactical disadvantage” to Rambus. In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F.Supp.2d 1022, 1023 (N.D. Cal. 2005). Moreover, the re-examination process is now underway, and the delay involved in postponing trial proceedings until the conclusion of the re-examination process is acceptable and “not

unduly prejudicial in light of the clarity reexamination of the patents-in-suit may bring to the litigation.” Id. at 1024. A balancing of the parties’ relative hardships in this equation weighs in favor of the issuance of a stay.

Rambus represented in the Conduct Trial that “[i]t just asks for fair and reasonable compensation from those people who use its inventions. . . . It just wants to be paid a fair price.” Sarwal Decl., Ex. 7 [3-25-08 Trial Tr.] at 5964:24-5965:14; see also Sarwal Decl., Ex. 13 [2-5-08 Trial Tr.] at 426:12-17 (“we’re not trying to stop you from making these products, we just think you ought to pay us a fair price”).
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CONCLUSION For these reasons, the Court should (1) try Rambus’s patent infringement claims against Samsung in a separate trial; and (2) stay the patent trial until the resolution of the Hynix I appeal and the re-examinations. Dated: August 1, 2008 WEIL, GOTSHAL & MANGES, LLP

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By: /s/ David J. Healey David J. Healey MATTHEW D. POWERS (Bar No. 104795) Email: matthew.powers@weil.com EDWARD R. REINES (Bar No. 135930) Email: edward.reines@weil.com WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 Telephone: (650) 802-3000 Facsimile: (650) 802-3100 DAVID J. HEALEY (admitted pro hac vice) Email: david.healey@weil.com ANITA E. KADALA (admitted pro hac vice) Email: anita.kadala@weil.com WEIL, GOTSHAL & MANGES LLP 700 Louisiana, Suite 1600 Houston, TX 77002 Telephone: (713) 546-5000 Facsimile: (713) 224-9511 Attorneys for Defendants SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG SEMICONDUCTOR, INC., and SAMSUNG AUSTIN SEMICONDUCTOR, L.P.

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