Micron Technology, Inc. v. Rambus Inc.

• Decision Date: 27 February 2002
• Docket Number: No. CIV.A.00-792-RRM.,CIV.A.00-792-RRM.
• Citation: 189 F.Supp.2d 201
• Parties: MICRON TECHNOLOGY, INC., Plaintiff, v. RAMBUS INC., Defendant.
• Court: U.S. District Court — District of Delaware

189 F.Supp.2d 201

MICRON TECHNOLOGY, INC., Plaintiff, v. RAMBUS INC., Defendant.

No. CIV.A.00-792-RRM.

United States District Court, D. Delaware.

February 27, 2002.

Frederick L. Cottrell, III, Esquire and Jeffrey L. Moyer, Esquire, Richards, Layton & Finger, Wilmington, Delaware; Fred H. Bartlit, Jr., Esquire, Bartlit Beck Herman Palenchar & Scott, Denver, Colorado; Matthew D. Powers, Esquire, Jared Bobrow, Esquire, Weil, Gotshal & Manges LLP, Redwood Shores, California; Bruce R. Genderson, Esquire, Williams & Connolly LLP, Washington, D.C.; Richard L. Rosen, Esquire, Arnold & Porter, Washington, D.C.; counsel for plaintiff.

Mary B. Graham, Esquire and Rodger D. Smith, Esquire, Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware; John Allcock, Esquire, James W. Cannon, Esquire, David Pendarvis, Esquire, Sean C. Cunningham, Esquire, Edward H. Sikorski, Esquire, and John M. Guarangna, Esquire, Gray Cary Ware & Freidenrich, LLP, San Diego, California; Gregory P. Stone, Esquire and Andrea J. Weiss, Esquire, Munger Tolles & Olson, Los Angeles, California; counsel for defendant.

MEMORANDUM OPINION

MCKELVIE, District Judge.

This is a patent and fraud case. Plaintiff Micron Technology, Inc. is a Delaware corporation with its principal place of business in Boise, Idaho. Micron is a manufacturer of semiconductor memory products, including dynamic random access memory ("DRAM") computer chips. Micron manufactures the two most common types of DRAM, synchronous dynamic random access memory ("SDRAM"), and the later developed double data rate SDRAM ("DDR SDRAM").

Defendant Rambus Inc. is a Delaware corporation with its principal place of business in Mountain View, California. Rambus is a technology company that designs computer memory systems and then licenses them to manufacturers such as Micron. Rambus is the assignee of U.S. Patent Nos. 5,915,105 (the '105 Patent), 5,953,263 (the '263 Patent), 5,954,804 (the '804 Patent), 5,995,443 (the '443 Patent), 6,032,214 (the '214 Patent), 6,032,215 (the '215 Patent), 6,034,918 (the '918 Patent), 6,038,195 (the '195 Patent) (collectively, the "Rambus Patents"). The Rambus patents all derive from one application, U.S. Patent App. No. 07/510,898, filed April 18, 1990. Rambus is also the owner and licensor of a proprietary type of SDRAM chip, known as Rambus dynamic random access memory ("RDRAM") chips.

On August 28, 2000, Micron filed its complaint in this action, alleging that Rambus committed fraud by failing to disclose its patents and patent applications to the Joint Electron Devices Engineering Council ("JEDEC"), a semiconductor industry association of which both Micron and Rambus for a time, were members. JEDEC develops industry-wide technical standards for DRAM and other products and, according to Micron, requires its members to disclose their patents and patent applications to the organization to prevent unknowing standardization of a patented technology. Micron asserts that Rambus defrauded Micron and other JEDEC members by failing to disclose its pending patent applications concerning features being considered by JEDEC for incorporation into SDRAM and DDR SDRAM industry standards. Micron asserts that after JEDEC adopted its standards, Rambus then sought exorbitant royalties from manufacturers like itself that produced JEDEC-compliant chips and not Rambus's RDRAM. Micron's claims include monopolization and fraud. It also seeks a declaratory judgment that the Rambus patents are invalid, unenforceable, and not infringed.

Following the denial of Rambus's motions to dismiss on January 2, 2001, Rambus answered Micron's complaint and asserted counterclaims that Micron's SDRAM and DDR SDRAM products infringe the Rambus patents.

Micron's suit against Rambus in this court is not the only action relating to Rambus's DRAM patents and its involvement with JEDEC. On August 8, 2000, Rambus sued Infineon Technologies AG, another SDRAM manufacturer, in the United States District Court for the Eastern District of Virginia (the "Virginia court"). See Rambus Inc. v. Infineon Technologies AG, Civil Action No. 3:00cv524 (E.D.Va.) ("Infineon"). Rambus asserted Infineon's JEDEC-compliant SDRAM products infringed four of its patents, including the '263 patent, the '804 patent, the '918 patent, and the '214 patent, all of which are asserted by Rambus against Micron in this action. Infineon brought a fraud counterclaim similar to Micron's fraud claim in this case. Following the Virginia court's issuance of a claim construction opinion dated March 15, 2001, the parties began trial on April 23, 2001. At the conclusion of Rambus's case in chief, the Virginia court granted judgment as a matter of law of non-infringement to Infineon. On May 9, 2001, the jury returned a special verdict finding Rambus had committed actual fraud by not revealing its patent applications to JEDEC.

Following trial, the Virginia court overturned the jury's verdict of fraud as to DDR SDRAM features, but upheld the jury's verdict as to SDRAM features. Rambus, Inc. v. Infineon Technologies AG, 164 F.Supp.2d 743 (E.D.Va.2001). The SDRAM features include a 2-bank design, externally supplied reference voltage, phase lock loops (PLLs), programmable CAS latency, and programmable burst length. The court found that Rambus was a member of JEDEC while these features were considered for standardization and that the jury's verdict on fraud as to these SDRAM features was supported by the evidence. Id. at 765. In contrast, the Virginia court found that Rambus left JEDEC before it had an obligation to disclose patent applications on the two DDR SDRAM features, "dual edge clocking" and "on-chip PLL/DLL." Thus, the Virginia court concluded Rambus violated no duty to JEDEC and its members as to DDR SDRAM. Id. at 767.

Micron seeks to apply the judgment of the Virginia court and jury to issues in this action through the principles of collateral estoppel. On June 18, 2001, Micron filed a motion for summary judgment of non-infringement of the Rambus patents, arguing that collateral estoppel requires this court's adoption of the Virginia court's claim construction and non-infringement judgment. On September 5, 2001, Micron also moved for summary judgment on its fraud and equitable estoppel claims, and its unclean hands defense,¹ similarly seeking to apply the collateral estoppel effect of the SDRAM fraud judgment in the Virginia court to this action. Micron suggests the court grant its summary judgment motions and proceed to trial on the remaining issues in the case, including its claim Rambus committed fraud on JEDEC as to the DDR SDRAM standards.

On August 24, 2001, Rambus filed a motion to stay this action pending appeal of the Infineon judgment to the United States Court of Appeals for the Federal Circuit. The Federal Circuit has scheduled expedited briefing of the appeal and the final brief is due March 15, 2002. Rambus argues a stay is necessary while it appeals the claim construction and fraud verdict in Infineon because many rulings in that case were incorrect. Rambus warns that proceeding to trial in this action before those rulings are corrected on appeal will only compound the Virginia court's error.

The court heard oral argument on Micron's summary judgment motions and Rambus's stay motion during a series of teleconferences and in court on August 1, 2001, September 27, 2001, October 30, 2001. This is the court's decision on those motions.

I. FACTUAL AND PROCEDURAL BACKGROUND

The court draws the following facts from the pleadings and the affidavits and documents submitted in support of, and in opposition to, the parties' motions.

A. Facts Alleged by Micron

JEDEC is a semiconductor industry association that develops industry-wide standards for various technology products, including DRAM. Micron alleges in its complaint that members of JEDEC are bound by a disclosure policy that requires them to disclose any patents or patent applications that might relate to the standards JEDEC considers for standardization. The purpose of this policy is to prevent a member from obtaining patents on the industry standard. JEDEC began considering industry standards for SDRAM as early as 1991.

Rambus was formed in 1990. It filed the '898 patent application on April 18, 1990. The PTO determined that the '898 application contained 11 independent inventions and required Rambus to select one to pursue on that application and permitted it to file divisional applications for the remainder. Rambus eventually withdrew the '898 application, but has filed many continuation and divisional applications beginning in 1992 that use the specification of the '898 application and claim priority from it. Micron contends at least 28 U.S. and foreign patents that claim priority from the '898 application have been granted.

Rambus joined JEDEC in 1992, and its officers and employees attended and participated in JEDEC meetings. Micron alleges that Rambus failed to disclose to JEDEC its '898 application and the many related patent applications it has filed. According to Micron, Rambus filed numerous patent applications, claiming priority from its original '898 application, that purport to cover JEDEC's SDRAM and DDR SDRAM features. Micron contends that Rambus filed these applications throughout its membership in JEDEC and that it continues to do so. Furthermore, Rambus allegedly informed JEDEC that its patents related to Rambus's proprietary RDRAM chip, and not the SDRAM or DDR SDRAM JEDEC standards.

Rambus withdrew from JEDEC in June 1996. In its withdrawal letter, Rambus listed some of its patents and patent applications, none of which concerned SDRAM or DDR SDRAM features. Micron alleges that despite its contentions to the contrary, Rambus continued to seek patents over SDRAM and DDR SDRAM features after leaving JEDEC and that it began asserting those patents against DRAM manufacturers in January 2000. According to Micron, Rambus offered to DRAM...