Hynix Semiconductor Inc. v. Rambus, Inc.
| Decision Date | 04 November 2007 |
| Docket Number | No. C-06-00244 RMW.,No. C-05-00334 RMW.,No. CV-00-20905 RMW.,No. C-05-02298 RMW.,CV-00-20905 RMW.,C-05-02298 RMW.,C-05-00334 RMW.,C-06-00244 RMW. |
| Citation | 527 F.Supp.2d 1084 |
| Parties | HYNIX SEMICONDUCTOR INC., Hynix Semiconductor America Inc., Hynix Semiconductor U.K. Ltd., and Hynix Semiconductor Deutschland GmbH, Plaintiffs, v. RAMBUS INC., Defendant. Rambus Inc., Plaintiff, v. Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Samsung Austin Semiconductor, L.P., Defendants. 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. Rambus Inc., Plaintiff, v. Micron Technology, Inc., and Micron Semiconductor Products, Inc., Defendants. |
| Court | U.S. District Court — Northern District of California |
This order addresses two motions. First, Rambus moved on January 5, 2007 to confirm withdrawal of its jury demand with respect to Hynix's fraud claim in case 00-20905, pursuant to Fed.R.Civ.P. 39(a)(2). Hynix opposed the motion. The court has reviewed the papers and considered the arguments of counsel heard on February 16, 2007. For the reasons set forth below, the court denies without prejudice Rambus's motion to withdraw its jury demand for Hynix's fraud claim.
Second, Rambus moved on September 24, 2007 to strike all jury demands of Hynix Micron, and Nanya ("Manufacturers") with regard tot he trial set to commence on January 22, 2008. While Rambus' motion to withdraw its jury demand with respect to Hynix's fraud claim was under submission, the court consolidated the following cases: 00-20905, 05-00334, 05-02298, and 06-00244. See April 24, 2007 Order at 1. In a joint case management conference statement filed on July 31, 2007, the parties in all four cases identified which claims are to be tried in the consolidated action set for trial commencing on January 22, 2008 and stated whether they claimed entitlement to a jury on those claims. See Joint Case Management Conference Statement of July 31, 2007 ("JCMCS"), at Attachments 1-3. On September 7, Rambus filed its motion to strike the jury demands with respect to all of the claims to be tried in the January 22, 2008 Trial. The Manufacturers jointly opposed the motion. The court has reviewed these further papers and considered the arguments of counsel heard on October 26, 2007. For the reasons set forth below, the court denies Rambus's motion to strike/withdraw jury demands as to the antitrust claims and denies Rambus' motion without prejudice as to the fraud claims. The court grants Rambus's motion to strike/withdraw jury demands with respect to the contract and declaratory judgment claims and affirmative defenses.
On June 16, 2006, Rambus moved to withdraw its jury demand for the third phase of trial in 00-20905 pursuant to Fed. R.Civ.P. 39(a)(2). Rambus argued that Hynix had disclaimed all damages other than the litigation costs incurred in defending Rambus's infringement claims. As to litigation costs, Rambus submitted that because its use of the courts to enforce its patents is protected petitioning activity pursuant to the Noerr-Pennington doctrine and the privilege under Cal. Civ. Code § 47(B), Hynix could not claim its litigation expenses as damages. The court denied the motion, holding that Noerr-Pennington immunity does not immunize an alleged fraudulent scheme to obtain an improper patent monopoly in violation of the antitrust laws. See August 2, 2006 Order at 5:3-11, 6 n. 2, 10:3-7. Accordingly, Hynix could still claim its attorneys' fees as damages for its antitrust claims, and therefore was still entitled to legal relief, and to a jury that can provide it at trial. Id. at 9-10.
On January 5, 2007, Rambus moved to confirm withdrawal of its jury demand with respect to Hynix's fraud claim (Hynix's eighth claim for relief in its Second Amended Complaint ("SAC") in 00-20905 asserts a claim for actual fraud). In support of its claim, Hynix alleges, inter alia, that Rambus misrepresented its patents and patent applications to JEDEC members including Hynix, and failed to disclose its intent to file applications that would "capture" the JEDEC standards as they were established. See SAC ¶¶ 148-49. Hynix's SAC seeks damages of, inter alia, "actual damages sustained as a consequence of Rambus's unlawful conduct, trebled as provided by law," SAC, Prayer for Relief, ¶ 5, "Hynix's full costs of this action, including reasonable attorney's fees," id. ¶ 6, "punitive damages as a result of Rambus's fraudulent conduct," id. ¶ 8, and "any such other relief deemed just and proper," id. ¶ 32.
Meanwhile, Rambus sued both Hynix and Nanya in the 05-00334 case and Micron in the 06-00244 case. These cases have been consolidated with 00-20905 for a joint trial on common claims on January 22, 2008. In a Joint Case Management Conference Statement filed July 31, 2007, the parties listed on which claims they assert entitlement to a jury. Hynix submitted that the following claims should be heard by the jury: monopolization, attempted monopolization and fraud. See JCMCS at Attachment 1. Micron also submitted that the monopolization, attempted monopolization, and fraud claims should be heard by the jury, as well as its unenforceability, declaratory judgment of unenforceability, breach of contract, negligent misrepresentation, and damages offset claims and waiver defense. See id. at Attachment 2. Nanya too wants a jury to hear the monopolization, attempted monopolization, and fraud claims. See id. at Attachment 3.
Rambus now moves to strike the jury demands with respect to all of these claims. Rambus argues that none of the Manufacturers has a valid damages claim, leaving only requests for equitable relief which do not entitle the Manufacturers to a jury. This is the same argument Rambus made with respect to Hynix's antitrust claims and Hynix's fraud claim.
The Seventh Amendment provides in relevant part: "in Suits at common law, where the value in controversy shall exceed $20.00, the right of trial by jury shall be preserved." U.S. Const., amend. VII. This language "defines the kind of cases for which jury trial is preserved, namely suits at common law." Tull v. United States, 481 U.S. 412, 426, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987). To ascertain such right, a court first compares the action "to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity." Id. at 417, 107 S.Ct. 1831 (citations omitted). Second, the court "examine[s] the remedy sought and determine[s] whether it is legal or equitable in nature." Id. (citations omitted). This second inquiry is the more important of the two. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989). It is also the only relevant inquiry to these motions, as no one disputes that the claims at issue can be tried to a jury if there are monetary damages. Instead, Rambus argues that the Manufacturers have forgone all legal relief, and with it, their right to a jury as well. Where the only requested relief is equitable, there is no right to a jury trial. See, e.g., In re Tech. Licensing Corp., 423 F.3d 1286, 1289-90 (Fed.Cir.2005); 9 Charles A. Wright & Arthur R. Miller, Fed. Practice & Proc.: Civil 2d § 2308 (1995) (). In making these inquiries, the court keeps in mind that "[m]aintenance of the jury, as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care." Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 501, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959).
On August 2, 2006, the court ruled in 00-20905 that Rambus could not withdraw its jury demand because Hynix had alleged a claim for legal relief which entitled it to a jury. Hynix's sole basis for monetary damages on its antitrust claims was that it had incurred attorneys' fees defending Rambus' patent claims. The court held that these attorneys' fees from patent litigation could be awarded as antitrust damages. Upon reflection and the additional briefing provided regarding the same issue in the 05-00334 and 06-00244 cases, the court believes its prior order is correct. The Manufacturers are entitled to a jury on their antitrust claim because their patent litigation attorneys' fees are cognizable damages where the patent litigation itself was part of an unlawful scheme.
Whether a patentee's conduct in procuring or enforcing a patent is "sufficient to strip a patentee of its immunity from the antitrust laws" is a question of Federal Circuit law. Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1068 (Fed.Cir.1998) (en banc). This includes any antitrust claim "premised on the bringing of a patent infringement suit." Id. However, Ninth. Circuit law governs the other elements of the Manufacturers' antitrust claims, such as "relevant market, market power, damages, etc." Id.
From one angle, the question posed by the pending set of motions is one of damages, and would appear to be controlled by Ninth Circuit law. However, the Manufacturers may only recover their attorneys' fees as antitrust damages to the extent that the fees arise from litigation that itself violates the antitrust laws, and whether a patentee's litigation activities can give rise to an antitrust claim is an issue of Federal Circuit law. Accordingly, Federal Circuit law...
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