Rambus Inc. v. Hynix Semiconductor Inc.
| Decision Date | 27 April 2009 |
| Docket Number | Case No. C 05-02298 RMW.,Case No. C 05-00334 RMW. |
| Citation | 629 F.Supp.2d 979 |
| Court | U.S. District Court — Northern District of California |
| Parties | RAMBUS INC., Plaintiff, v. HYNIX SEMICONDUCTOR INC., et al., Defendants. Rambus Inc., Plaintiff, v. Samsung Electronics Co., Ltd., et al., Defendants. |
S. Berezin, Weil Gotshal & Manges LLP, New York, NY, Julie Jinsook Han, Townsend and Townsend and Crew LLP, Palo Alto, CA, Rene A. Trevino, Weil Gotshal & Manges LLP, Austin, TX, Stacy Beth Margolies, Theresa E. Norton, Vickie L. Feeman, Jason Sheffield Angell, Kristin Sarah Cornuelle, Orrick Herrington & Sutcliffe, Menlo Park, CA, for Defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW WITH RESPECT TO SAMSUNG'S COUNTS I-III AND ESTOPPEL DEFENSE
These Findings of Fact and Conclusions of Law concern the court trial of that portion of the dispute between Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc. and Samsung Austin Semiconductor, L.P. (collectively "Samsung") and Rambus Inc. ("Rambus") based upon the allegations set forth in Counts I-III of Samsung's Counterclaims against Rambus in Action Nos. C-05-00334 RMW and C-05-02298 RMW. Samsung alleges that: (1) Rambus breached § 3.8 of the SDR/DDR IC and SDR/DDR Memory Module Patent License Agreement Between Rambus, Inc. and Samsung Electronics Co., Ltd. ("2000 SDR/DDR License," "License" or "Agreement") by failing to notify Samsung of the more favorable license rate it gave to Infineon and by refusing to provide that rate to Samsung (Count I); (2) Rambus breached § 8.5 by failing to negotiate in good faith an extension of the License (Count II); and (3) Rambus breached the covenant of duty of good faith and fair dealing implied in the License by failing to adjust the royalty rate paid by Samsung under the License to match the lower effective royalty rate provided for in the Rambus/Infineon License and by failing to negotiate an extension in good faith (Count III).
These Findings of Fact and Conclusions of Law also cover Samsung's affirmative defense of equitable estoppel whereby Samsung asserts that Rambus is equitably estopped from taking actions against Samsung that are inconsistent with the Rambus/Infineon license.
The evidentiary portion of the trial was conducted by the court beginning on September 22, 2008 and concluding on October 1, 2008. These Findings of Fact and Conclusions of Law are based on the evidence received during that trial which included, by stipulation, the relevant evidence admitted in the prior jury trial of monopolization and related claims brought by the Hynix, Micron, and Nanya entities against Rambus. Hynix Semiconductor Inc. v. Rambus Inc.; Rambus Inc. v. Hynix et al.; Rambus Inc. v. Micron Technology et al., Nos. C-00-20905 RMW, C-05-00334 RMW, C-06-00244 RMW ("Coordinated Jury Trial"). The jury verdict was rendered on March 26, 2008.
1. Rambus was founded in 1990 by two professors, Dr. Michael Farmwald and Dr. Mark Horowitz, who had been working together to address the increasing gap between microprocessor performance and DRAM performance. Jury Tr. at 4079:8-4081:24, 4091:9-4095:10, 5489:23-5490:3.1
2. On April 18, 1990, Drs. Farmwald and Horowitz filed a patent application, serial number 07/510,898 ("the '898 application") containing numerous claims relating to their efforts to solve this performance gap problem. Exh. 5131.
3. On April 16, 1991, Rambus filed an international patent application pursuant to the Patent Cooperation Treaty (the "PCT application"). Exh. 3583. The PCT application was published on October 31, 1991. The specification contained in the PCT application was identical to that contained in the '898 application and described, according to Rambus, the inventions that are at issue in Rambus's infringement claims against Samsung in the above-captioned actions. id.
4. On April 7, 1992, Geoff Tate, Rambus's Chief Executive Officer, provided Dr. Yong Park, Samsung's Senior Vice President of Business Development and Product Planning, with a copy of the PCT application. Exh. 10667.
5. Rambus received its first issued U.S. patent resulting from the '898 application in September 1993. Exh. 3219. The '898 application resulted in the filing over time of numerous continuation and divisional applications. Exh. 8888. Some of the patents that resulted from this process are at issue in the above-captioned cases but the first of those patents did not issue until January 30, 2001 (U.S. Patent 6,182,184).
6. On November 7, 1994, Rambus and Samsung began a business alliance when they entered into an agreement entitled the Semiconductor Technology License Agreement ("RDRAM Agreement"). Exh. 6110. This agreement covered certain intellectual property used in the manufacture and sale of RDRAM devices and required Samsung to pay license fees and several different percentage-of-net-sales royalties. Id. § 4.2(a).
7. In 1996, Intel announced that it planned to endorse "Rambus-2," a next generation version of Rambus's proprietary DRAM technology (later known as Direct RDRAM). Jury Tr. at 3000:18-3003:11.
8. In 1996 and early 1997, Rambus and Samsung renegotiated the 1994 RDRAM Agreement resulting on February 7, 1997 in the execution of Addendum No. 1 to Semiconductor Technology License Agreement to cover Rambus's next-generation memory technology, Direct RDRAM. Trial Ex. 4201.
9. As of 2000, Rambus described its goal to establish Rambus DRAM as the dominant memory in the industry as "[o]ur # 1 priority." Trial Ex. 4009 (Hitachi Settlement Q & A) at 6; Trial Tr. at 740:1-6 (), 740:19-741:1 (". . . that would make it the most dominant memory if it were to be the most successful. . . ."), 741:2-24 (". . . we continued to work hard to make RDRAM successful.").
10. At that time, Samsung was the top supplier of RDRAM memory devices and accounted for more total RDRAM sales than the next three suppliers combined. Trial Tr. at 195:2-15, 739:15-25, 740:11-18; Trial Ex. 3209 (Summary of Worldwide DRAM Sales, 1996-2006).
11. On July 25, 2000 representatives of Rambus and Samsung first met to discuss a potential license covering SDR and DDR products. Exh. 4204.
12. On August 8, 2000 Rambus initiated patent infringement litigation against Infineon Technologies, Inc. ("Infineon") in which Infineon's defenses included unclean hands for alleged spoliation of documents. Exh. 4264.
13. On October 27 and October 31, 2000, Rambus and Samsung respectively signed the 2000 SDR/DDR License. Exh. 4226. The SDR/DDR License had an effective date of July 1, 2000 and a five-year term extending through June 30, 2005. Id. §§ 1.1, 8.1. It included a most favored licensee provision, a provision for the audit of Samsung's sales for royalty payment verification purposes, and an agreement to negotiate an extension or new agreement in good faith. Id. §§ 3.8, 4.1 and 8.5. In an On October 27 and October 31, 2000, Rambus and Samsung respectively signed the 2000 SDR/DDR License. Exh. 4226. The SDR/DDR License had an effective date of July 1, 2000 and a five-year term extending through June 30, 2005. Id. §§ 1.1, 8.1. It included a most favored licensee provision, a provision for the audit of Samsung's sales for royalty payment verification purposes, and an agreement to negotiate an extension or new agreement in good faith. Id. §§ 3.8, 4.1 and 8.5. In an e-mail dated October 31, 2000 from Jay Shim, Samsung's chief negotiator, to Neil Steinberg, Rambus's chief negotiator, Mr. Shim advised that Samsung had executed the Agreement but that he was working on a post-execution amendment, as they had discussed, to revise the wording of Section 8.5 to address a most favorable royalty condition in an extension or new agreement. Exh. 4227.
14. On November 7, 2000, Mr. Shim sent an "amendment proposal" to Steinberg via email. Exh. 4230 at 1. On November 21, 2000, Mr. Steinberg sent an email responding to Mr. Shim's proposed Amendment. Exh. 4232 at 1. Neither of these proposed amendments to the 2000 SDR/DDR License was ever signed or assented to by the parties. Trial Tr. at 248 (testimony of J. Shim).
15. In July 2001 the parties did negotiate and execute an amendment regarding renewal of their Agreement. Exh. 4240 (Amendment No. 1). As executed, this amendment imposed an obligation on Rambus to negotiate a renewal agreement "solely and exclusively" with respect to "Licensed Products," as that term was defined under the SDR/DDR License. Exh. 4240 ¶ 1 (). Rambus signed Amendment No. 1 on July 10, 2001, and Samsung signed on July 18, 2001. Exh. 4240. Amendment No. 1 provided, among other things, that if Rambus licensed Infineon, it could terminate the Amendment on...
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