Hynix Semiconductor Inc. v. Rambus Inc.

• Decision Date: 23 February 2009
• Docket Number: No. C-00-20905 RMW.,C-00-20905 RMW.
• Citation: 609 F.Supp.2d 951
• Court: U.S. District Court — Northern District of California
• Parties: HYNIX SEMICONDUCTOR INC., Hynix Semiconductor America Inc., Hynix Semiconductor U.K. Ltd., and Hynix Semiconductor Deutschland GmbH, Plaintiffs, v. RAMBUS INC., Defendant.

Page 951

609 F.Supp.2d 951

HYNIX SEMICONDUCTOR INC., Hynix Semiconductor America Inc., Hynix Semiconductor U.K. Ltd., and Hynix Semiconductor Deutschland GmbH, Plaintiffs, v. RAMBUS INC., Defendant.

No. C-00-20905 RMW.

United States District Court, N.D. California, San Jose Division.

February 23, 2009.

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Allen Ruby, Law Offices of Allen Ruby, San Jose, CA, Belinda Martinez Vega, Susan Gregory Van Keulen, O'Melveny & Myers LLP, Robert Jason Becher, Yonaton M. Rosenzweig, Aaron Bennett Craig, Quinn Emanuel Urquhart Oliver & Hedges LLP, Los Angeles, CA, Geoffrey Hurndall Yost, Thelen Reid & Priest, LLP, Linda Jane Brewer, Quinn Emanuel Urquhart Oliver & Hegdes, LLP, San Francisco, CA, Jan Ellen Ellard, Jason Sheffield Angell, Orrick Herrington & Sutcliffe, LLP, Tomomi Katherine Harkey, O'Melveny & Myers LLP, Menlo Park, CA, Jared Bobrow, John D. Beynon, Weil Gotshal & Manges LLP, Redwood Shores, CA, Joseph A. Greco, Townsend and Townsend and Crew LLP, Palo Alto, CA, for Plaintiffs.

Carolyn Hoecker Luedtke, Burton Alexander Gross, Esq., Erin C. Dougherty, Jennifer Lynn Polse, Miriam Kim, Peter A. Detre, Rosemarie Theresa Ring, Esq., Munger, Tolles Olson LLP, San Francisco, CA, Gregory P. Stone, Munger Tolles & Olson, Kelly Max Klaus, Sean Eskovitz, Steven McCall Perry, David C. Yang, Jeffrey Y. Wu, Kathryn Kalb Anderson, Keith Rhoderic Dhu Hamilton, II, Lynn Healey Scaduto, Munger Tolles & Olson LLP, Michelle B. Goodman, Peter Ivan Ostroff, Rollin Andrew Ransom, Sidley Austin Brown & Wood, Los Angeles, CA, Jeannine Yoo Sano, Howrey LLP, East Palo Alto, CA, Scott W. Hejny, Thomas N. Tarnay, V. Bryan Medlock, Sidley Austin LLP, Catherine Rajwani, Sidley Austin Brown & Wood LLP, Dallas, TX, William

Hans Baumgartner, Jr., Sidley Austin LLP, Chicago, IL, Craig N. Tolliver, Pierre J. Hubert, McKool Smith, Austin, TX, John D. Beynon, Weil, Gotshal & Manges LLP, Redwood Shores, CA, for Defendant.

PUBLIC REDACTED

ORDER GRANTING IN PART AND DENYING IN PART RAMBUS'S MOTION FOR POST-VERDICT RELIEF

RONALD M. WHYTE, District Judge.

This patent/antitrust litigation involving dynamic random access memory ("DRAM") interface technology patented by Rambus and used by Hynix,¹ among others, was bifurcated into three phases, each of which had to be tried. The issue in the first phase was whether Rambus's patent infringement claims were barred by the doctrine of unclean hands. Hynix contended that Rambus spoliated evidence resulting in prejudice to Hynix. On January 5, 2006 the court issued its Findings of Fact and Conclusions of Law on Unclean Hands Defense in favor of Rambus. Hynix Semiconductor Inc. v. Rambus Inc., 591 F.Supp.2d 1038 (N.D.Cal.2006). The second phase concerned Rambus's allegations that Hynix infringed U.S. Patents 5,915,105, 6,034,918, 6,324,120, 6,378,020, 6,426,916, and 6,452,863. On April 26, 2006 a jury returned a verdict that Rambus's patent claims were infringed and that Rambus was entitled to hundreds of millions in damages. Docket No. 2053 (Apr. 24, 2006). The court ordered a new trial on damages unless Rambus elected to remit the award to reflect the maximum reasonable royalty rates established at trial, which Rambus did. Docket Nos. 2197 (Jul. 14, 2006); 2229 (Jul. 27, 2006). The third and final phase involved allegations by Hynix that Rambus obtained its patents in violation of its disclosure obligation to members of a standards setting organization ("JEDEC") of which it was a member and committed antitrust and related violations by attempting to assert its patent claims against manufacturers of DRAMs that complied with the JEDEC standard. Hynix's allegations in this third phase were tried in a consolidated proceeding with similar claims made by other DRAM manufacturers. On March 26, 2008 a jury returned a verdict in favor of Rambus and against Hynix and the other manufacturers on their legal claims. The court will shortly issue its Findings of Fact and Conclusions of Law on the equitable claims and defenses in the third phase. Now, after over eight years of litigation, three discrete trials, and hundreds of motions, the court hereby issues its rulings on the last pending motions and seeks the parties' input on the form of the judgment to be entered.

Rambus moves for a permanent injunction against Hynix, an award of supplemental damages, and its attorney's fees. Unfortunately, Rambus did not include a proposed order with its initial moving papers as required by Civil Local Rule 7-2(c). The lack of a proposed order hindered Hynix's ability to oppose Rambus's request for injunctive relief, for example, because Hynix was not certain of the scope of Rambus's requested relief. Rambus filed its proposed order with its reply. See Docket No. 3735 (Jun. 6, 2008).²

Hynix opposes the request for an injunction and has also filed a motion to stay any injunction pending an appeal.³ The court has reviewed the papers, and considered the arguments of counsel. For the following reasons, the court denies Rambus's request for attorney's fees, grants in part Rambus's request for supplemental damages, and denies Rambus's request for an injunction. Hynix's motion for a stay of any injunction is denied as moot.

I. ATTORNEY'S FEES

Rambus asserts that this is an "exceptional case" and that it should therefore receive its attorney's fees. See 35 U.S.C. § 285. Whether a prevailing party is entitled to attorney's fees is a two-step inquiry. Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1460 (Fed.Cir. 1998) (en banc). First, the district court must make factual findings as to whether the case is "exceptional." Id. Second, the court must exercise its discretion as to whether or not attorney's fees are appropriate. Id. Rambus bears the burden of establishing the exceptional nature of the case by clear and convincing evidence, Ruiz v. A.B. Chance Co., 234 F.3d 654, 669 (Fed.Cir.2000), and its argument falters at this first step.

In determining whether a case is "exceptional," the court may consider a number of factors, including, for example, whether the infringer engaged in litigation misconduct, advanced frivolous arguments, or willfully infringed the patent. Epcon Gas Systems, Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1034 (Fed.Cir.2002). Rambus does not argue that Hynix engaged in either of the former, and Rambus cannot prove the latter. Despite Rambus's contention in its brief that Hynix "knowingly and willfully infringed Rambus's patents" and that Hynix lacked a good faith belief in its non-infringement, Rambus did not attempt to prove willfulness because it dropped the issue to avoid the possibility that the court would bifurcate the patent trial. Hrg. Tr. 15:2-10; 17:1-4; 29:4-6 (Feb. 23, 2006). In light of Rambus's decision not to try the issue of willfulness, Hynix cannot be faulted for a failure to introduce evidence of its good faith belief in its non-infringement arguments. That aside, given the many close issues this litigation has involved, the court cannot conclude that Hynix lacked a good-faith basis for its positions on claim construction, non-infringement, invalidity and unenforceability.

Nevertheless, Rambus argues that the "Read factors" used to determine whether or not to enhance damages may also inform whether or not a case is exceptional. See Liquid Dynamics Corp. v. Vaughan Co., Inc., 449 F.3d 1209, 1225 (Fed.Cir. 2006) (listing the nine "Read factors" that may establish whether an infringer acted in bad faith and whether damages should be enhanced); Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed.Cir.1992), abrogated on other grounds as recognized in Hoechst Celanese Corp. v. BP Chems. Ltd., 78 F.3d 1575, 1578 (Fed.Cir.1996). Implied in Rambus's argument is the notion that a court may deem a case "exceptional" based on conduct that informs willfulness and enhanced damages, even where a showing of willfulness is not made.

The court questions the correctness of Rambus's expansize approach to the "exceptional case" inquiry is correct.⁴ The Federal Circuit has held that where willful infringement is proven, a case may, or may not, be deemed "exceptional" under section 285. Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d 1327, 1340 (Fed.Cir.2004) (explaining cases). This suggests that evidence suggesting, but not proving, willfulness, is also insufficient to establish that a case is exceptional absent litigation misconduct. Nonetheless, the court considers the conduct Rambus believes makes this case "exceptional."

A. Copying

Rambus first argues that there is "strong evidence" that Hynix copied Rambus's inventions. Rambus does not specifically identify such evidence in its briefing. Presumably, Rambus refers to Trial Exhibit 5020, an internal Hynix document describing its progress on its first DDR SDRAM. Patent Trial Tr. 1433:11-20 (Mar. 28, 2006). The document refers to the need to "compete with Rambus idea" to make a higher frequency DRAM. HTX 5020 at 5. Among the memo's many proposals, the authors suggest two relevant ideas: using a DLL to improve data output and employing dual-edge clocking to double the operating frequency, which would require a calibration of the clock signal's duty ratio to make it 1:1. Id. at 37. The footnote to the duty-ratio discussion says "Refer to Rambus DRAM. The DLL has duty-ratio adjustment with it." Id. at 40. This suggests that Hynix's engineers looked to Rambus's DRAM to help them implement a circuit to control the clock signal's duty ratio. But that is not one of the claimed inventions. Rambus did not press Hynix's engineer, Jae-Jin Lee, to explain the exhibit, its reference to Rambus's DRAM, or the role of Rambus's DRAM in Hynix's DDR SDRAM design process. See Patent Trial Tr. 1482:10-19.

Rambus also suggests that circumstantial evidence shows that Hynix deliberately used Rambus's claimed inventions because, given the field of alternative technologies, the odds of Hynix selecting Rambus's were "1...