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FRANKFURT
HONG KONG
HOUSTON
LONDON
MIAMI
MUNICH
NEW YORK
PARIS
PROVIDENCE
SHANGHAI
WARSAW
WASHINGTON, D.C.
BY E-FILING AND EMAIL
Your Honor:
Pursuant to the Court’s request, the Manufacturers submit this letter to set forth
their position regarding phases in the January 2009 Trial, order of presentation and proof, the
Manufacturers’ reservation of rights, and the proposal by Micron, Samsung, and Hynix regarding
a Micron-only liability trial in which Samsung and Hynix would be bound by the jury verdict,
with Rambus’s claims against Nanya relating to DDR2 and DDR3 products to be deferred and
included in the liability trial between Rambus, Samsung, and Nanya relating to Rambus’s SDR
and DDR SDRAM claims against Samsung and Nanya.
The Manufacturers’ proposal regarding not contesting infringement was set forth
in their letter to the Court dated December 19, 2008 (attached hereto as Exhibit A). Micron,
Samsung, and Hynix’s proposal regarding a Micron-only liability trial in January 2009, in which
Samsung and Hynix would not participate before the jury but which Samsung and Hynix agree
would bind them (and which would bind Rambus as to Samsung and Hynix), was made at the
December 19, 2008 hearing and was addressed in a December 22, 2008 letter to counsel for
Rambus (attached hereto as Exhibit B).
This letter brief further addresses and supplements these two proposals, addresses
issues raised by Rambus in a December 24, 2008 telephonic meet and confer, and addresses
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Rambus’s counter-proposal set forth in a December 29, 2008 email (attached hereto as Exhibit
C).
• data output “synchronously with respect to a rising edge transition of the external
clock signal” and “synchronously with respect to a falling edge transition of the
external clock signal” (‘696 claim 4 and ‘446 claim 3);
• data output “in response to” a rising and falling edge transition of an external
clock 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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In addition, it is the Manufacturers’ position that the Court’s disposition on summary judgment
of the limitation regarding sampling data “after a programmable number of clock cycles of the
external clock” (‘285, claim 16) is also dispositive of the variable latency limitations of the
following claims:
The Manufacturers do not “concede” infringement and do not agree to abandon their appeal
rights or summary motions currently pending that relate to infringement (in particular,
Samsung’s and Nanya’s separate motions for summary judgment of non-infringement of the
method 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 that
motion is denied, Manufacturers propose be tried during the damages phases, as discussed in
their December 19 letter.
The approach proposed by the Manufacturers is entirely proper, and would be the
most efficient way to resolve the remaining disputes. After the remaining issues are tried, the
Court can enter final judgment regarding infringement, validity, and damages.1 Once there is
final 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, ‘final
decisions of the district courts.’ See 28 U.S.C. § 1291.”). Indeed, the claim construction issues
1
To the extent Rambus’s counter-proposal implies that the Court should enter a final order on
infringement prior to the January 2009 Trial, see Dec. 29, 2008 Email at para. 1, the
Manufacturers believe that it would be premature and unnecessary for the Court to do so until all
issues 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 court’s 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 court’s claim construction order).
The 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 have
been 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 the
Manufacturers are not contesting infringement. Infringement is simply not relevant to the
validity determination, and permitting Rambus to refer to or argue regarding infringement would
unfairly prejudice the Manufacturers by inviting the jury to consider that irrelevant procedural
posture. Rambus further maintained during the parties’ December 24 meet and confer that
Rambus should be able to argue that the Manufacturers’ products infringe as an element of
Rambus’s proof of the commercial success of its purported inventions for purposes of secondary
considerations 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 doubt
in light of the Court’s Order On The Manufacturers’ Daubert Motion No. 1 To Preclude
Testimony Of Robert Murphy On Secondary Considerations Of Non-Obviousness, in which the
Court precluded Mr. Murphy, Rambus’s sole proposed expert witness on commercial success,
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with appropriate safeguards, that for purposes of determining commercial success, it should
assume that the Manufacturers products practice the claims at issue.
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 January
2009 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 an
opinion 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, Rambus’s factual submissions (i.e., Mr. Murphy’s reports regarding
infringement and such other evidence as Rambus may choose to submit). However, Rambus
further counter-proposes that “[a]n appeal with regard to this finding of infringement can be
taken 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. Rambus’s proposal would bar an
appeal that addresses the additional factual submissions—even though the Court has not had an
opportunity to address the additional factual submissions on the merits. The Manufacturers
cannot agree to Rambus’s counter-proposal.
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first and then, if necessary, damages would be tried to the same jury immediately following
liability, with willfulness tried to the Court after damages. See Sept. 24, 2008 Tr. at 4, 5, 30. In
addition, the Court’s December 4, 2008 Order further contemplates separate liability and
damages phases since the parties’ pretrial submissions with respect to willfulness are not due
before the beginning of the trial on infringement and validity, but rather are due within ten days
of the end of the damages portion of the trial. See Dec. 4, 2008 Order Memorializing Willfulness
Procedures at 2.
Rambus has argued, and maintained during the December 24 meet and confer
with 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 contest
infringement, 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 and
prejudice against the Manufacturers require that liability and damages be tried in separate phases
and that liability, even if only on the issue of validity, should be tried prior to damages.
4
Rambus may argue that damages should not be separated from liability because Rambus’s
evidence of secondary considerations of non-obviousness (i.e., commercial success) overlaps
with 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 outweigh
the 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 question
of commercial success is not ordinarily determined by a detailed analysis of exhaustive and
intricate 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 for
Separate Patent Trials and To Stay the Patent Trial that complicated issues are involved for both
liability and damages. Even without infringement-related issues, the invalidity issues remain
complex. Specifically, the technology at issue in this litigation, the state of the art and the
knowledge of one of ordinary skill at the pertinent time, and the sufficiency of the disclosures in
the original 1990 patent application are dense subject matters. Similarly, the damages issues are
complex and multi-faceted. The damages phase will include presentations from all four
Manufacturers regarding each Manufacturer’s unique hypothetical negotiation date; the facts and
circumstances that inform each Manufacturer’s hypothetical negotiation; each Manufacturer’s
expert’s methodologies, analyses, and conclusions; each Manufacturer’s different criticisms of
the opinions with respect to that Manufacturer by Rambus’s damages expert; and each
Manufacturer’s sets of sales data. Indeed, the damages phase is so complicated that the structure
of this phase—such as the whether all the Manufacturers will present their evidence in series
followed by one jury deliberation on damages or whether one Manufacturer will present its
damages evidence followed by a jury deliberation on damages for that Manufacturer—has not
yet been determined.
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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Rambus’s 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 will
assume (or tend to assume) that liability, if tried later, is already a forgone conclusion.
If the Court adopts the Manufacturers’ proposal and determines that infringement
will not be contested at trial, the Manufacturers bear the burden of proof on the only remaining
liability issue. There is no question that the party with the burden of proof typically presents
first. 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 the
burden of proof.”) (citing Martin v. Chesebrough-Pond’s, Inc., 614 F.2d 498, 501 (5th Cir.
1980)); Fresenius Med. Care Holdings, Inc. v .Baxter Int’l, 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 evidence
first 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 original
designations unless the plaintiff no longer retains the burden to prove at least one of its claims or
if 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 be
allowed to present their case first during opening statements, the presentation of evidence, and
closing arguments during the liability phase.
IV. Proposal by Micron, Samsung, and Hynix Regarding the Two Remaining Liability
Trials
Rambus did not raise any specific concerns in the December 24 meet and confer
regarding the proposal made by Micron, Samsung, and Hynix at the December 19 hearing and in
their December 22 letter to Rambus (Exhibit B) that the two remaining liability trials be
reconfigured into a first DDR2+ trial (including Rambus’s claims relating to DDR2 and certain
subsequent related products as to Micron, Samsung, and Hynix) in January 2009 in which
Micron 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 jury’s verdict (and of course, Rambus
would be bound as to Samsung and Hynix) and a second trial in which Rambus’s DDR2+ claims
as to Nanya would be included with Rambus’s SDR SDRAM and DDR SDRAM claims as to
Samsung and Nanya.
However, in its December 29, 2008, Rambus makes two counter-proposals: that
the Court’s final order determining infringement will also extend to the SDR and DDR products
of Samsung and Nanya that are accused in this case and that all of the Manufacturers shall
remain as parties in the upcoming trial. See Dec. 29, 2008 Email at paras. 2, 8. By making a
counter-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. That
is, Micron, Samsung, and Hynix proposed that the liability portion of the January 2009 Trial
address Rambus’s DDR2+ claims against Micron only and that, if necessary, damages will be
tried against Micron, Samsung, and Hynix seriatim immediately after the liability verdict is
returned. See Dec. 22, 2008 Letter. Micron, Samsung’s and Hynix’s proposal was intended to
streamline the validity trial and make it less confusing to the jury. Accordingly, Micron,
Samsung, and Hynix do not agree with Rambus’s so-called “counter-proposal” that all
Manufacturers remain as parties to the liability phase of the January Trial.
V. Conclusion5
It is clear from Rambus’s December 29, 2008 email that it does not agree to the
trial management proposal outlined in the Manufacturers’ letters of December 19 and 22, the
discussion at the December 19 hearing, and this letter. The Manufacturers believe that their
proposals can significantly streamline the resolution of the remaining disputes between the
parties and result in judicial efficiency and reduction of complexity for the jury. Moreover, the
Manufacturers 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. The
Manufacturers look forward to further discussions regarding these proposals at the January 6
hearing, and share the Court’s and Rambus’s concerns that the structure of the January trial be
finalized at the earliest possible opportunity.
Sincerely,
5
Rambus also made a counter-proposal regarding Rambus’s access to trial witnesses employed
by 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 management
proposals that have been made and suggest that the parties meet and confer regarding production
of witnesses for trial independent of the issues raised here.
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