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Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 1 of 14

1 Gregory P. Stone (SBN 078329) Rollin A. Ransom (SBN 196126)


Andrea Weiss Jeffries (SBN 183408) SIDLEY AUSTIN LLP
2 Fred A. Rowley, Jr. (SBN 192298) 555 West Fifth Street, Suite 4000
MUNGER, TOLLES & OLSON LLP Los Angeles, CA 90013-1010
3 355 South Grand Avenue, 35th Floor Telephone: (213) 896-6000
Los Angeles, CA 90071-1560 Facsimile: (213) 896-6600
4 Telephone: (213) 683-9100 Email: rransom@sidley.com
Facsimile: (213) 687-3702
5 Email: gregory.stone@mto.com Pierre J. Hubert (Pro Hac Vice)
Email: andrea.jeffries@mto.com Craig N. Tolliver (Pro Hac Vice)
6 Email: fred.rowley@mto.com McKOOL SMITH PC
300 West 6th Street, Suite 1700
7 Peter A. Detre (SBN 182619) Austin, TX 78701
Rosemarie T. Ring (SBN 220769) Telephone: (512) 692-8700
8 Jennifer L. Polse (SBN 219202) Facsimile: (512) 692-8744
MUNGER, TOLLES & OLSON LLP Email: phubert@mckoolsmith.com
9 560 Mission Street, 27th Floor Email: ctolliver@mckoolsmith.com
San Francisco, CA 94105
10 Telephone: (415) 512-4000
Facsimile: (415) 512-4077
11 Email: peter.detre@mto.com
Email: rose.ring@mto.com
12 Email: jen.polse@mto.com
13 Attorneys for RAMBUS INC.
14 UNITED STATES DISTRICT COURT
15 NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
16
RAMBUS INC., CASE NO.: C 05-00334 RMW
17
Plaintiff, RAMBUS’S REPLY BRIEF IN SUPPORT
18 OF MOTION FOR PARTIAL SUMMARY
vs. JUDGMENT RE MANUFACTURERS’
19 PATENT EXHAUSTION AFFIRMATIVE
HYNIX SEMICONDUCTOR INC., et al., DEFENSES
20
Defendants. Date: December 10, 2008
21 Time: 2:00 p.m.
Before: Hon. Ronald M. Whyte
22 Place: Courtroom 6, 4th Floor
23 RAMBUS INC., CASE NO.: C 05-02298 RMW
24 Plaintiff,
25 vs.
26 SAMSUNG ELECTRONICS CO., LTD.,
et al.,
27
Defendants.
28
RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 2 of 14

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RAMBUS INC., CASE NO.: C 06-00244 RMW
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Plaintiff,
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vs.
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MICRON TECHNOLOGY INC., et al.,
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Defendants.
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 3 of 14

1 TABLE OF CONTENTS
Page
2
I. INTRODUCTION ............................................................................................................ 1
3
II. ARGUMENT .................................................................................................................... 2
4
A. The Manufacturers Concede That They Have No Legal Authority to
5 Support Their Novel “Upstream” Exhaustion Theory.......................................... 2
6 B. Quanta Does Not Justify the Expansion of the Patent Exhaustion Doctrine
Sought by the Manufacturers ................................................................................ 2
7
C. Even if the “Logic and Policy” of Quanta Supported the Manufacturers’
8 “Upstream” Exhaustion Theory, Their Patent Exhaustion Defenses Would
Still Be Foreclosed ................................................................................................ 5
9
1. The Manufacturers’ Arguments and Analyses Are Inconsistent
10 With and Contrary to the Reasoning in Quanta........................................ 5
11 2. The Manufacturers Provide No Factual Support for Their Assertion
That Controllers “Substantially Embody” the Claimed Inventions
12 and Make No Attempt to Show that the Accused DRAMs Are
Merely “Incidental”................................................................................... 7
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III. CONCLUSION ............................................................................................................... 10
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-i- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 4 of 14

1 TABLE OF AUTHORITIES
Page
2
Cases
3
Cyrix Corp. v. Intel Corp.,
4
846 F. Supp. 522 (E.D. Tex. 1994) ........................................................................................... 3
5
Excelstor Tech., Inc. v. Papst Licensing GmbH & Co. KG,
6 542 F.3d 1373 (Fed. Cir. 2008)................................................................................................. 5

7 Hynix Semiconductor Inc. v. Rambus Inc.,


No. C-00-20905 RMW, 2008 WL 4155655 (N.D. Cal. Sept. 5, 2008) .................................... 2
8
Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc.,
9
381 F.3d 1111 (Fed. Cir. 2004)................................................................................................. 4
10
Quanta Computer, Inc. v. LG Elec., Inc.,
11 __ U.S. __, 128 S. Ct. 2109 (2008) .................................................................................. passim

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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-ii- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 5 of 14

1 I. INTRODUCTION
2 The Manufacturers’ opposition brief confirms that there is no legal support for
3 their “upstream” patent exhaustion theory and that, even if this “upstream” exhaustion theory
4 were legally viable, the undisputed facts here foreclose the application of patent exhaustion as a
5 matter of law. Indeed, the Manufacturers candidly admit that they are unable to cite a single case
6 in which patent exhaustion was applied “upstream” in the manner the Manufacturers advocate.
7 Instead, the Manufacturers rely on purported “logic and policy” arguments that they attempt to
8 derive from the Quanta decision. Such arguments fail as a matter of law and fact.
9 Boiled down, the Manufacturers’ arguments depend on, first, characterizing
10 (explicitly or implicitly) all of Rambus’s patent rights as a single “invention” or “set of
11 inventions” covering a “memory system,” and, second, contending that Rambus would obtain
12 improper double recoveries if it is allowed to receive separate compensations for different aspects
13 of this “memory system.” But Rambus’s “inventions” are defined by the patent claims, not the
14 Manufacturers’ self-serving characterizations. And the patent claims asserted in this case are
15 embodied in the Manufacturers’ accused DRAMs. To the extent that the Manufacturers contend
16 that their DRAMs do not embody each and every element of the Asserted Claims, such
17 contentions relate to noninfringement, not patent exhaustion. If the Manufacturers are correct that
18 the accused DRAMs do not infringe the Asserted Claims, then affirmative defenses like patent
19 exhaustion would not even come into play.
20 Moreover, even if the Manufacturers had presented a legal basis for an “upstream”
21 exhaustion theory, under Quanta they would still need to show that the licensed memory
22 controllers at least “substantially embody” the Asserted Claims and that the accused DRAMs are
23 merely “incidental” to the claimed inventions. Under the undisputed facts, the Manufacturers
24 have not made even a prima facie showing that this is the case. The only factual evidence cited
25 by the Manufacturers is the testimony of Graham Allan. But Mr. Allan has never even attempted
26 to compare the licensed memory controllers to the Asserted Claims in order to determine whether
27 and to what extent the controllers embody the claim elements. To the contrary, Mr. Allan and the
28 Manufacturers all assume for the purposes of this Motion that the accused DRAMs embody each
RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-1- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 6 of 14

1 and every element of the Asserted Claims. Finally, the Manufacturers do not even attempt to
2 argue that the DRAMs are merely “incidental” to the Rambus Asserted Claims, let alone offer
3 evidence to support such an argument. Thus, the Manufacturers’ arguments are fatally flawed as
4 a matter of fact as well as law.
5 II. ARGUMENT
6 A. The Manufacturers Concede That They Have No Legal Authority to Support
Their Novel “Upstream” Exhaustion Theory
7

8 Not surprisingly, the Manufacturers concede that they “have not been able to
9 locate a case that specifically addresses the factual scenario before this Court.” Opp’n at 12.
10 That is because there is none. The affirmative defense of patent exhaustion simply does not apply
11 to the factual circumstances here, for the reasons explained in Rambus’s opening brief. 1 The
12 Manufacturers’ inventive “upstream” exhaustion theory has never before been adopted and would
13 represent a significant departure from patent exhaustion precedent.
14 B. Quanta Does Not Justify the Expansion of the Patent Exhaustion Doctrine
Sought by the Manufacturers
15

16 Quanta was faithful to “over 150 years” of patent exhaustion case law, Quanta
17 Computer, Inc. v. LG Elec., Inc., __ U.S. __, 128 S. Ct. 2109, 2113 (2008), and, as the Court
18 previously recognized, any suggestion by the Manufacturers that Quanta represents or supports a
19 “sweeping change” in the law is without merit, see Hynix Semiconductor Inc. v. Rambus Inc., No.
20 C-00-20905 RMW, 2008 WL 4155655, at *4 (N.D. Cal. Sept. 5, 2008). Nevertheless, the
21 Manufacturers argue that the “logic and policy” of Quanta dictate that the Court should expand
22 the exhaustion doctrine to cover circumstances in which, they admit, it has never been applied
23 before. Opp’n at 12. Although the Manufacturers’ “logic and policy” arguments in this regard
24 are not a model of clarity, they appear to be based on a misreading of Quanta.
25

26 1
The Manufacturers’ statement that “Rambus has failed to cite to any authority to support their
argument that exhaustion is inapplicable in this case” is obviously incorrect. Opp’n at 12.
27 Rambus’s opening brief cited numerous cases that demonstrate that patent exhaustion applies
only on a postsale, downstream basis, once an “authorized sale” has occurred. See Mot. at 5, 9.
28
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-2- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 7 of 14

1 In Quanta, the Supreme Court confirmed that an authorized sale of an article can
2 exhaust patent rights “with respect to the article sold.” 128 S. Ct. at 2119. There were two main
3 aspects to the Court’s holding. First, the doctrine applies to method patents. Id. at 2115. Second,
4 the “article sold” may exhaust patent rights only if it embodies each and every element of the
5 claimed invention – which the Manufacturers do not even allege to be the case here – or if (1) the
6 only reasonable and intended use of the “article sold” is to practice the claimed invention; and (2)
7 the “article sold” “substantially embodies” the claimed invention. Id. at 2119-20. To
8 “substantially embody” the claimed invention, the “article sold” must be a material part of the
9 invention and “all but completely” practice the invention, and any additional parts or processes
10 needed to practice the invention must be merely “incidental.” Id. at 2120. Finally, the patent that
11 must be “substantially embodied” is the patent at issue in the litigation. See id. at 2121. “[T]he
12 exhaustion analysis is not altered by the fact that more than one patent is practiced by the same
13 product. The relevant consideration is whether [the “articles sold”] exhaust [the patent at issue in
14 the case].” Id.
15 Nothing in this holding permits an “upstream” manufacturer of unlicensed
16 components to raise a patent exhaustion defense based on its customers’ purchases of entirely
17 different licensed components from other manufacturers, even if the unlicensed and licensed
18 components were intended to operate together. Indeed, the Manufacturers admit that “Quanta
19 does not directly address this precise situation.” Opp’n at 12. Quanta does not involve this
20 situation because it involved the prototypical factual context triggering patent exhaustion
21 concerns: a downstream purchaser of licensed products accused of infringement based upon its
22 use of licensed products. 2 Such facts are indisputably not present here.
23 The Manufacturers’ theory is ultimately based on affirmative defenses the
24 Manufacturers contend might be available to other companies – i.e., downstream users such as
25 OEMs. For example, using the example of Dell as an OEM, the Manufacturers argue that “[t]he
26
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See also, e.g., Cyrix Corp. v. Intel Corp., 846 F. Supp. 522, 537-41 (E.D. Tex. 1994) (holding
27 that patent exhaustion applied where the patentee Intel had licensed the asserted patent to TI and
ST, and the accused infringer Cyrix had purchased the accused products from TI and ST).
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-3- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 8 of 14

1 clear import of Quanta, Cyrix, and other exhaustion cases is that Dell, which constructs memory
2 systems based on fully licensed memory controllers, should be free of infringement claims
3 against the memory system in the products it sells, including claims of infringement by the
4 DRAMs per se.” Id. at 11. Whether an OEM such as Dell could raise a patent exhaustion
5 argument, or whether that theory would also be unavailable to an OEM such as Dell, is simply
6 beside the point. The Manufacturers are not Dell, have not purchased any allegedly licensed
7 memory controllers, and have not used allegedly licensed memory controllers in the Accused
8 Products. Rather, the Manufacturers make and sell infringing DRAMs, are liable for that
9 infringement, and must pay compensatory damages for that infringement.
10 The Manufacturers also raise the specter of “double recoveries,” arguing that
11 Rambus is attempting to collect overlapping royalties from Intel (for memory controllers) and the
12 Manufacturers (for DRAMs) based upon a scheme to “patent around” the patent exhaustion
13 doctrine. Opp’n at 11, 13-14. The Manufacturers apparently argue that patent exhaustion must
14 be applied “upstream” to prevent this alleged double recovery. Even if one ignores the incorrect
15 premise that patent exhaustion may be applied “upstream,” the Manufacturers’ argument lacks
16 merit.
17 Rambus’s patent rights cannot be reduced, as the Manufacturers suggest, to a
18 single conceptual “invention” (see Opp’n at 14) or characterized simply as a “memory system”
19 (see Opp’n at 13-14). It is black letter law that the patent claims define Rambus’s inventions.
20 See Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1115-16 (Fed.
21 Cir. 2004) (collecting cases). Rambus has many different claimed inventions, each of which are
22 defined by the language contained in the specific patent claims. To the extent the Manufacturers’
23 opposition represents an attempt to “morph” all of Rambus’s patent rights into a single
24 “invention” and to unilaterally define that “invention” as a “memory system,” the Manufacturers’
25 arguments would be wrong as a matter of law. Rambus would not obtain “double recoveries” by
26 securing royalties on memory controllers separately from royalties for DRAMs, nothwithstanding
27 the fact that the two products might work together in combination inside an electronics device.
28 See, e.g., Excelstor Tech., Inc. v. Papst Licensing GmbH & Co. KG, 542 F.3d 1373, 1377 (Fed.
RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-4- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 9 of 14

1 Cir. 2008) (“Patent exhaustion prohibits patentees from enforcing patent rights in certain
2 circumstances, but it does not forbid multiple licenses on a single product or even multiple
3 royalties.”). Memory controllers and DRAMs are different products with different patented
4 features. Under the Manufacturers’ “morphing” theory, manufacturers of interconnected
5 computer components would have free reign to produce unlicensed products so long as the
6 ultimate OEM had a license to use other components; all of the interconnected components would
7 “morph” into the licensed component and would be protected from infringement claims. This
8 makes no sense. 3
9 C. Even if the “Logic and Policy” of Quanta Supported the Manufacturers’
“Upstream” Exhaustion Theory, Their Patent Exhaustion Defenses Would
10 Still Be Foreclosed
11 1. The Manufacturers’ Arguments and Analyses Are Inconsistent With
and Contrary to the Reasoning in Quanta
12

13 The Manufacturers’ arguments run afoul of Quanta for numerous reasons. First,
14 although the only products that are even arguably the subject of “authorized sales” are memory
15 controllers, the Manufacturers argue that “the Rambus invention is substantially embodied in each
16 of the major components of the memory systems in which they are used, the methods of their
17 operation, and the memory system as a whole.” Opp’n at 14. But what matters for the purposes
18 of patent exhaustion is whether the memory controllers – the products that are alleged to have
19 been the subject of “authorized sales” – at least “substantially embody” the Rambus Asserted
20 Claims. See Quanta, 128 S. Ct. at 2119-21.
21 When the Manufacturers do argue that “the Rambus patents at issue here are
22 substantially embodied in the licensed controllers” (Opp’n at 1), the Manufacturers do not support
23 this argument with the type of analysis required under Quanta. Rather than attempting to
24 3
Even assuming for the sake of argument that all of Rambus’s patent rights, including claims
covering memory controllers and claims covering DRAMs, could be distilled into a single
25 conceptual “memory system” invention, Rambus would still be entitled to seek compensation
from different manufacturers for the separate infringements committed by each of them. In other
26 words, assuming that manufacturers X and Y were each separately infringing a given patent
claim, manufacturer X would not be excused from its infringements, or from paying
27 compensation for its infringements, merely because a separate infringing entity (manufacturer Y)
had already taken a license.
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-5- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 10 of 14

1 demonstrate that the memory controllers are a material part of the Rambus Asserted Claims or
2 “all but completely practice” those claims (Quanta, 128 S. Ct. at 2120), the Manufacturers appear
3 to be making an argument along the following lines:
4 Much like a lock and a key, the memory controller and the DRAM
represent, for purposes of Rambus’s claims, two sides of the same
5 coin; one is useless without the other, and the functionality of each
is dictated by the functionality of the other. In other words, the
6 claimed Rambus inventions are each “substantially embodied”
both in the individual components and in their normal operation in
7 memory systems.
8 Opp’n at 5. But whether a product “substantially embodies” a claimed invention under Quanta
9 turns on the extent to which the product possesses the essential and inventive features of the
10 claimed invention, not whether it is intended for use with, or functionally dictated by, that
11 invention. See Quanta, 128 S. Ct. at 2119-20. Thus, the Manufacturers extended discussions
12 concerning the functionalities and uses of memory controllers and DRAMs do not address the
13 salient point.
14 In addition, the Manufacturers argue that “[e]xhaustion is not limited to patents
15 covering the item sold, but extends also to any other patents that cover uses or combinations of
16 the item sold with other components, at least where the other patents are substantially embodied
17 in the items sold.” Opp’n at 12. This curiously-worded sentence begs the question: whether the
18 “item sold” at least “substantially embodies” any claims of the patents-in-suit. See Quanta, 128
19 S. Ct. at 2121. Whether Rambus has other unasserted patents that might concern memory
20 controllers is simply irrelevant to whether patent exhaustion adheres in this case.
21 Finally, even if the Manufacturers could demonstrate that memory controllers
22 “substantially embody” the Rambus Asserted Claims, exhaustion would only apply “with respect
23 to the article sold” – the controllers. Quanta, 128 S. Ct. at 2119. But memory controllers are not
24 involved here. The Accused Products are DRAM memory devices and the Asserted Claims cover
25 DRAM memory devices under Rambus’s infringement theories. The Manufacturers have never
26 contended that they are purchasers of licensed memory controllers or have otherwise used
27 licensed memory controllers when they manufactured the Accused Products. Thus, patent
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-6- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 11 of 14

1 exhaustion is inapplicable under Quanta, even if the Manufacturers could somehow establish that
2 controllers “substantially embody” the Asserted Claims.
3 2. The Manufacturers Provide No Factual Support for Their Assertion
That Controllers “Substantially Embody” the Claimed Inventions and
4 Make No Attempt to Show that the Accused DRAMs Are Merely
“Incidental”
5

6 As explained above, even if Quanta provided support for the Manufacturers’


7 “upstream” exhaustion theory, the Manufacturers would still need to supply factual evidence that
8 the memory controllers “substantially embody” the Asserted Claims and that the accused DRAMs
9 are merely “incidental” to the claimed inventions. See Mot. at 11-12. The evidence cited by the
10 Manufacturers, however, is plainly insufficient to make even a prima facie showing on either of
11 these points. Indeed, the only evidence provided by the Manufacturers in support of their
12 arguments is citations to the Expert Report of Graham Allan (see Detre Decl. Ex. 12). But Mr.
13 Allan’s testimony does not even come close to establishing that memory controllers “substantially
14 embody” the Asserted Claims. And the Manufacturers do not bother arguing that the accused
15 DRAMs are “incidental” to the claimed inventions, much less support any such argument with
16 evidence.
17 Mr. Allan assumed for the purposes of his report that the Accused Products – the
18 DRAM memory devices – themselves contained or performed all of the elements of the Asserted
19 Claims. See Detre Decl. Ex. 12 (Allan Rep.) at 26:3-27:5. This was proper. Patent exhaustion is
20 an affirmative defense that would only come into play if Rambus’s infringement claims succeed,
21 and Rambus is asserting that the Accused Products themselves, alone, directly infringe the
22 Asserted Claims. See Detre Decl. Ex. 11 (Murphy Rep.) ¶ 33; see id. Ex. S (claim charts
23 comparing Asserted Claims to Accused Products). But if the DRAMs alone embody all of the
24 elements of the Asserted Claims, then it is not possible that the controllers, which are entirely
25 separate components with different structures and functionality, “substantially embody” the
26 Asserted Claims under Quanta.
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-7- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 12 of 14

1 Indeed, Mr. Allan was not asked to consider, and made no effort to determine,
2 whether memory controllers embody any of the elements of the Asserted Claims, as shown in the
3 following colloquy from Mr. Allan’s deposition:
4 MR. CAMPIONE: Q. Does your report include any -- I’m
turning now to the opinions expressed in your report as opposed to
5 the assumptions. Does your report include any opinion regarding
whether memory controllers embody or include all of the elements
6 recited in a claim?
7 ....
8 THE WITNESS: I don’t believe so.
9 MR. CAMPIONE: Q. And does your report include any
opinion that memory controllers infringe any of the asserted
10 claims?
11 A. No.
12 ....
13 MR. CAMPIONE: Q. Yes. It’s not expressed in your
opinion as it’s written -- I mean, in your report you don’t express
14 your opinion as to whether a memory controller embodies any
elements of asserted claims; is that right?
15
....
16
THE WITNESS: I honestly don’t know how to answer that
17 question. I’m still not interpreting it properly. There are claims in
the subject matter of the report that refer to memory controllers. I
18 don’t believe I was specifically asked to provide an opinion on
whether the memory controller embodied any of the components
19 of any of the claims.
20 MR. CAMPIONE: Q. So as far as you know, it’s not
currently expressed in your report whether or not memory
21 controllers embody any limitations to the asserted claims?
22 ....
23 HE WITNESS: Yes.
24 MR. CAMPIONE: Q. And just to make sure we’re
comprehensive, is the same true with respect to any method
25 claims? In other words, it’s not expressed in your report whether
or not controllers embody any of the limitations of method claims
26 either; is that right? I think that’s subsumed by your previous
answer.
27
....
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-8- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
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Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 13 of 14

1 THE WITNESS: I wasn’t asked to provide those opinions


and I don’t believe they’re in my report.
2
MR. CAMPIONE: Q. Okay. Did you consider whether
3 memory controllers embody any of the limitations of the asserted
claims? Even though it didn’t end up in your report, did you
4 consider that issue?
5 A. I don’t believe I did.
6 Q. Are you aware of any analysis as to whether memory
controllers embody any of the limitations of asserted claims?
7
A. No.
8

9 Detre Decl. Ex. 16 at 30:4-34:3. Having failed to undertake such an analysis, Mr. Allan is in no

10 position to opine on whether memory controllers “substantially embody” – i.e., “all but

11 completely practice” – the Asserted Claims, and the Manufacturers cannot rely on his testimony.

12 Without his testimony, the Manufacturers’ arguments are entirely unsupported. 4

13 Moreover, there is not even an allegation in the Manufacturers’ opposition that DRAMs

14 are merely “incidental” to the Rambus Asserted Claims. In fact, the Manufacturers state that their

15 opposition “assumes . . . for the purposes of this motion, that the Rambus claims cover the

16 Accused DRAMs.” Opp’n at 10 n.5. This assumption is in accordance with Mr. Allan’s

17 assumption, made for purposes of his patent exhaustion report, that the DRAMs embody each and

18 every element of the Asserted Claims. See Detre Decl. Ex. 12 (Allan Rep.) at 26:3-27:5. Given

19 the Manufacturers’ acknowledgement that the DRAMs must be assumed to embody each and

20 every element of the Asserted Claims, it is not surprising that the Manufacturers do not attempt to

21 establish that the DRAMs are somehow “incidental” to the claimed inventions.

22

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25 4
Even the Manufacturers’ unsupported arguments miss the mark. For example, perhaps the most
aggressive position taken in the Manufacturers’ opposition is the unsupported statement that
26 “[w]ithout a memory controller, the Accused DRAMs do not meet each [and, sic] every limitation
of Rambus’s device claims.” Opp’n at 9. But this is a noninfringement argument, not an
27 argument that supports patent exhaustion. To the extent the Manufacturers succeed in
establishing noninfringement, patent exhaustion as an affirmative defense becomes inapplicable.
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-9- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
CASE NOS. 05-334 RMW; 05-2298 RMW; 06-244 RMW
Case 5:05-cv-00334-RMW Document 2624 Filed 11/25/2008 Page 14 of 14

1 III. CONCLUSION
2 For all of the foregoing reasons, the Manufacturers’ patent exhaustion affirmative
3 defenses are without merit as a matter of law, and partial summary judgment should now be
4 entered in Rambus’s favor on this issue.
5 DATED: November 25, 2008 MUNGER, TOLLES & OLSON LLP
6 SIDLEY AUSTIN LLP
7 McKOOL SMITH PC
8

9
By: /s/ Andrea Weiss Jeffries
10 Andrea Weiss Jeffries
11 Attorneys for Plaintiff RAMBUS INC.
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RAMBUS’S REPLY BRIEF RE MOTION FOR PARTIAL
-10- SUMMARY JUDGMENT RE PATENT EXHAUSTION;
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