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1 2 3 4 5 6 7 8 9 10 RAMBUS INC., Plaintiff, v. BROADCOM CORP., Defendant. ____________________________________/ RAMBUS INC., Plaintiff, v. LSI CORPORATION Defendant. ____________________________________/ RAMBUS INC., Plaintiff, v. MEDIATEK INC., Defendant. ____________________________________/

*E-Filed 6/13/11*

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION

No. C 10-05437 RS ORDER GRANTING IN PART AND DENYING IN PART MOTIONS TO STAY

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No. C 10-05446 RS

No. C 10-05447 RS

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RAMBUS INC., Plaintiff, v. STMICROELECTRONICS N.V.; STMICROELECTRONICS INC., Defendants. ____________________________________/

No. C 10-05449 RS

I. INTRODUCTION On December 1, 2010, plaintiff Rambus filed separate patent infringement actions against defendants Broadcom, LSI Corporation, Mediatek, and STMicroelectronics. In these suits, Rambus alleges that defendants’ respective products infringe various patents flowing from different patent groups: the Farmwald/Horowitz (FH), Barth, and Dally patents. On the same day that Rambus filed these infringement actions, it also instituted proceedings at the International Trade Commission (ITC) involving all three of the Barth patents and three out of the six Dally patents asserted in the district court cases.1 Under 28 U.S.C. section 1659, on timely request by a respondent in an ITC proceeding, the district court must stay a civil action with respect to “any claim that involves the same issues involved in the proceeding before the Commission.” Thus, all defendants filed motions requesting mandatory stays of litigation involving the Barth patents and the overlapping Dally patents and discretionary stays of the remainder of their cases. Rambus does not contest staying litigation with respect to the Barth patents and all of the Dally patents. Thus, defendants’ motions to stay litigation of those patents are granted.2 The contested issue is whether the Court should also stay litigation of

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Rambus asserts the following FH patents in this action: U.S. Patent Nos. 6,034,918; 6,038,195; 6,260,097; 6,304,937; 6,426,916; 6,564,281; 6,584,037; 6,715,020; 6,751,696; and 7,209,997. The Barth patents involved in both this case and the ITC proceeding are U.S. Patent Nos. 6,470,405; 6,591,353; and 7,287,109. The six Dally patents at issue in this suit are U.S. Patent Nos. 6,542,555; 7,099,404; 7,580,474; 7,602,857; 7,602,858; and 7,715,494. The latter three Dally patents are also part of the ITC suit. 2 In a fifth related case, No. C 10-5448 RS, Rambus asserts only the Dally patents against Nvidia Corporation. The Court previously granted Nvidia’s motion to stay its suit until a final determination in the ITC proceeding. In the sixth case filed concurrently with these suits, No. C 105445 RS, Rambus and Freescale Semiconductor, Inc. reached a settlement.
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the FH patents until the end of the ITC action and/or until reexamination proceedings of them at the U.S. Patent & Trademark Office (PTO) are completed.3 Based on the parties’ submissions and oral argument, and for the reasons stated below, defendants’ motions to stay litigation of the FH patents are denied. II. LEGAL STANDARD A district court may, in its discretion, stay proceedings as part of its inherent power “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). In determining whether to grant a stay, the court weighs the following factors: (1) possible damage caused by the imposition of a stay; (2) hardship or inequity that would result from going forward; and (3) “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.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). The party seeking a stay bears the burden of demonstrating its necessity. See Clinton v. Jones, 520 U.S. 681, 708 (1997). III. DISCUSSION Pursuant to 28 U.S.C. section 1659, proceedings with respect to the Barth and Dally patents that are at issue in the ITC suit shall be stayed “until the determination of the Commission becomes final.” Defendants argue that Rambus will not suffer any harm from a similar stay of the FH patents until the end of the ITC action. As all of the FH patents have expired or will expire shortly, Rambus is unable to seek injunctive relief in this suit.4 Thus, according to defendants, a stay would not

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Defendants also sought a stay until resolution of two appeals then pending before the Federal Circuit involving some of the same FH patents at issue here. See Hynix Semiconductor, Inc. v. Rambus Inc., 591 F. Supp. 2d 1038 (N.D. Cal. 2006); Micron Technology, Inc. v. Rambus Inc., 255 F.R.D. 135 (D. Del. 2009). On May 13, 2011, the Federal Circuit issued its decisions in those appeals. See Hynix Semiconductor, Inc. v. Rambus Inc., 2011 U.S. App. LEXIS 9728 (Fed. Cir. May 13, 2011); Micron Tech., Inc. v. Rambus Inc., 2011 U.S. App. LEXIS 9730 (Fed. Cir. May 13, 2011). 4 Although these cases are related, they remain four separate suits. For simplicity, these district court cases are referred to collectively in the singular as “this suit.” Furthermore, each defendant separately filed its own motion to dismiss. The Court reviewed all pleadings submitted by the parties. As defendants’ arguments largely overlap, they are addressed altogether within this Order.
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prevent Rambus from obtaining all of the relief to which it ultimately may be entitled in the form of damages. For its part, Rambus raises the potential loss of evidence, including that based on witnesses’ memories or in the control of third parties, were the case to be delayed. It also claims that defendants’ failure to pay royalties for past infringement harms its goodwill and reputation. While Rambus’ claims of prejudice are fairly general, there likely is at least some harm associated with a stay. Even though defendants claim that the technology overlaps significantly between the Barth and FH patent families, the latter patents are not at issue in the ITC case. Thus, unlike a stay in light of an ITC proceeding involving the same patent family, Rambus will not have an opportunity through parallel proceedings to develop any aspects of its case specific to the FH patents. As defendants themselves mention the depositions of employees when discussing their own harm, Rambus’ assertion that it seeks timely access to witnesses is not unreasonable. Ultimately, even if the potential harm to Rambus is minimal, defendants still must demonstrate their own hardship in the absence of a stay and that a stay would benefit the resolution of issues in this case. With respect to hardship in the absence of a stay, defendants argue that they will be harmed by being forced to engage in duplicative litigation. As an initial matter, with or without a stay, there are two proceedings pending. Defendants potentially must engage in discovery, produce employees for depositions, expend effort on claim construction and expert reports, and incur litigation expenses for this district court case either now or after the ITC action. In other words, duplication based on litigation of the FH patents and the ITC proceedings on the Barth and Dally patents in and of itself is not a hardship that weighs in favor of granting a stay. While specific hardship might arise should these actions proceed simultaneously, such as particular strain on expenses or employees, defendants have raised such harm only generally. For instance, they object to subjecting their employees to duplicative depositions, but have not established that it would be less disruptive to expose employees to two depositions based on the likely schedule in light of a stay versus the absence of one. Defendants do not just argue harm from participating in parallel proceedings generally. In their view, the similarities in technology involved in the FH and Barth patents will result in substantial wasted effort in the absence of a stay. Each group of patents is directed to memory
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controllers for semiconductor devices and defendants’ same products are accused of infringing both. Defendants, however, likely overestimate the potential for the ITC action to narrow issues with respect to the FH patents. Foremost, decisions of the ITC are not binding on this court. See Texas Instruments Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1569 (Fed. Cir. 1996). Even if they were, the fact that the ITC action involves different patents means there would be no reason to wait for a final decision, including any potential appeal to the Federal Circuit, to move forward on the FH litigation. In short, there is nothing determinative about the Commission’s final decision on the Barth patents with respect to any issue in this suit. To the extent that the parties, based on overlapping technology, develop relevant tutorials, claim constructions, or prior art arguments, they can realize those potential efficiencies in this case without waiting until the end of the ITC action. Finally, even if the Barth and FH patents involve substantial overlap in technology, many issues that will be highly contested as to each will be patent-family specific. For instance, claim construction and invalidity arguments likely will depend heavily on the particular details of the patents’ respective specifications. Further with respect to defendants’ potential hardship, they also contend that being forced to litigate the district court case itself on two tracks imposes significant harm. In their view, moving forward on the FH patents now, while litigation specific to the Barth and Dally patents is stayed, will multiply discovery obligations, employee disruptions, and expenses within this suit. While the stay imposed on the overlapping ITC patents is “mandatory,” it is mandatory in the sense that the Court must grant it on timely request. Defendants, as they are entitled to do, requested the stay. Although there may be some burden on defendants to move forward with the FH patents, this potential hardship does not weigh heavily in favor of granting a stay. The last factor to consider as to a discretionary stay is whether it will benefit the parties and the Court in terms of “the orderly course of justice.” Defendants suggest that litigating the FH patents on different timing from the Barth and Dally patents will be highly duplicative, thus straining the parties and the Court. As previously discussed, the potential for the ITC action to generate efficiencies in this case does not hinge on waiting until the final decision of the Commissioner. Moreover, to the extent that the different patent families involve overlapping
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technology and issues, progress made with respect to the FH patents in this case may also allow efficiencies to be gained once the stay of the Barth and Dally patents is lifted. In short, a stay of litigation involving the FH patents until the end of the ITC proceeding involving different patent families is not warranted. Finally, defendants also seek a stay based on reexaminations of the FH patents pending at the PTO. They suggest that waiting for the final outcomes has the potential to narrow issues in this suit. According to Rambus, the ten FH patents at issue here have been the subject of seventeen different reexamination proceedings initiated between 2007 and 2010. Of these seventeen challenges, four reexaminations are still pending before the examiners; five have been completed with all claims confirmed and have no appeal pending; six appeals are pending where all claims were confirmed by the examiner; and two appeals are pending where some claims were rejected by the examiner. Overall, nine out of ten of the FH patents are still involved in some stage of reexamination, but only two patents have had any claims rejected to date. Given the various stages of these multiple reexaminations, the sheer number of them, and the relatively few claims cancelled to date, staying this suit until all possible reexamination proceedings are exhausted also is not justified. IV. CONCLUSION Defendants’ motions to stay proceedings in this case with respect to the Barth and Dally patents are granted. The motions to stay litigation of the FH patents are denied.

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IT IS SO ORDERED.

Dated: 6/13/11 RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE

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