Rambus, Inc. v. Infineon Technologies Ag

• Decision Date: 12 August 2004
• Docket Number: No. 3:00CV524.,3:00CV524.
• Parties: RAMBUS, INC., Plaintiff, v. INFINEON TECHNOLOGIES AG, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

330 F.Supp.2d 679

RAMBUS, INC., Plaintiff, v. INFINEON TECHNOLOGIES AG, et al., Defendants.

No. 3:00CV524.

United States District Court, E.D. Virginia, Richmond Division.

August 12, 2004.

COPYRIGHT MATERIAL OMITTED

Michael W. Smith, Esquire, Craig T. Merritt, Esquire, R. Braxton Hill, Esquire, Christian & Barton, L.L.P., Richmond, VA, Gregory P. Stone, Esquire, Peter A. Detre, Esquire, Munger, Tolles & Olson LLP, Los Angeles, CA, for Plaintiff.

Brian C. Riopelle, Esquire, Robert M. Tyler, Esquire, McGuire Woods, LLP, Richmond, VA, John M. Desmarais, Esquire, Gregory S. Arovas, Esquire, Michael P. Stadnick, Esquire, Kirkland & Ellis, New York City, for Defendants.

MEMORANDUM OPINION

PAYNE, District Judge.

This matter is before the Court on Rambus, Inc.'s ("Rambus") Motion in Limine No. 2, to Exclude Evidence or Argument that Plaintiff's Amendment of Patent Claims was Based on Stolen Ideas or was Otherwise Wrongful or Illegal (Docket No. 576). The Defendants are Infineon Technologies AG, Infineon Technologies North America Corporation, and Infineon Technologies Holding North America, Incorporated (hereinafter collectively "Infineon"). By way of this motion in limine, Rambus asks the Court to preclude Infineon from introducing evidence or presenting argument that Rambus' amendment of its patent claims was based on ideas acquired from documents produced and discussions conducted during the process of the development of an industry standard by a standard-setting organization, the Joint Electronics Devices Engineering Council ("JEDEC"). Infineon offers that conduct as one component of its proof to show that Rambus violated the federal antitrust law, 15 U.S.C. § 2, and the California unfair trade practice statute, Cal. Bus. & Prof.Code § 17200. Relying on the decision of the United States Court of Appeals for the Federal Circuit in Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867 (Fed.Cir.1988), and its progeny, Rambus asserts that Infineon is entirely foreclosed from offering such evidence or making any such arguments.¹ For the reasons explained below, the motion in limine will be denied.

STATEMENT OF FACTS

Founded in March 1990, Rambus develops, secures patents on, and licenses technologies to companies that manufacture semiconductor memory devices. Rambus is not a manufacturing company and thus it relies on the licensing of its patent portfolio for revenue.

In 1990, Rambus filed United States Patent Application Serial Number 07/510,898 (the "898 application") with claims directed to dynamic random access memory, or "DRAM" technology. The United States Patent and Trademark Office ("PTO") determined that the application covered several independent inventions. Consequently, the PTO issued an eleven-way restriction requiring Rambus to elect one invention to pursue in its application. In response, Rambus filed numerous divisional and continuation applications assertedly based on its original application. Thereafter, Rambus was awarded numerous DRAM patents. According to Rambus, these patents are directed to several DRAM-related technologies: Rambus DRAM ("RDRAM"), Synchronous Dynamic Random Access Memory ("SDRAM"), and Double Data Rate Synchronous Dynamic Random Access Memory ("DDR-SDRAM").² Among those patents are the four patents-in-suit: United States Patent Nos. 5,954,804 (the "'804 patent"), 6,034,918 (the "'918 patent"), 5,953,263 (the "'263 patent"), and 6,032,214 (the" '214 patent").³ These patents were issued in 1999 and 2000.

In August 2000, Rambus filed a complaint against Infineon, alleging infringement of all four of those patents. Before trial, the Court issued a Memorandum Opinion pursuant to Markman v. Westview Instruments. Inc., 52 F.3d 967 (Fed.Cir.1995) (en banc), aff'd 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996), construing the disputed claim terms of the patents-in-suit. Thereafter, Rambus abandoned, before trial, the charge of infringement as to the '804 patent.

Thus, at trial, Rambus proceeded against Infineon as to the '263 patent, the '214 patent, and the '918 patent. During the trial, however, judgment as a matter of law ("JMOL") was granted in Infineon's favor respecting the alleged infringement of those patents. Consequently, a number of Infineon's affirmative defenses and counterclaims were no longer relevant, and therefore, some were abandoned, and others were dismissed without prejudice.

Among the counterclaims that went to verdict were those for actual and constructive fraud. The fraud claims were predicated, in part, on the theory that Rambus had violated certain patent disclosure policies of JEDEC⁴ during the process by which JEDEC was establishing an industry standard for SDRAMs and later DDR-SDRAMs. As part of the evidence offered in connection with its fraud claims, Infineon introduced evidence that Rambus attended the JEDEC meetings first to try to get its RDRAM technology adopted as an industry standard and later for the purpose of learning about the proposed DRAM standards being developed there and then using that information to amend its pending patent applications and to file continuation and divisional applications intended to produce patents that, when issued, would encompass any technology made in compliance with the JEDEC SDRAM and DDR-SDRAMs standards. In other words, at trial, Infineon offered evidence that Rambus clandestinely used information that it had acquired at, and in connection with, JEDEC meetings to guide its patent prosecution so as to capture products made pursuant to the JEDEC standard and deliberately waited until after the DRAM industry had become "locked in" to producing products that complied with the JEDEC SDRAM and DDR-SDRAM standards to announce that the patents it had thusly procured covered the JEDEC standards.⁵

During closing arguments, Infineon's counsel argued, inter alia:"If they had invented it, it would have been in the patent in the first place, but they didn't. They stole it. They stole it from the industry standards bodies."⁶ Counsel further argued: "They [Rambus] go to ... [JEDEC] meetings, they see the presentations.... They go meet with their patent lawyer, they start amending the claims."⁷ And: "Did Rambus attend standards bodies meetings and change their patents to cover what they saw at the standards meetings? You can't reach any other conclusion."⁸

To rebut this evidence and defuse this line of argument, Rambus proffered a jury instruction based on Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867 (Fed.Cir.1988). In particular, Rambus offered an instruction based on the following language from that case:

It should be made clear ... that there is nothing improper, illegal or inequitable in filing a patent application for the purpose of obtaining a right to exclude a known competitor's product from the market; nor is it in any manner improper to amend or insert claims intended to cover a competitor's product the applicant's attorney has learned about during the prosecution.

Kingsdown, 863 F.2d at 874.

Finding that the instruction was neither accurate nor complete as respected the facts in evidence, the Court declined to give the jury instruction as tendered. Instead, the Court offered instead to give an instruction based on Kingsdown that made it apparent that, although it is not per se improper to amend patent claims in order to cover a competitor's product, it is not proper to violate the law in the course of obtaining the information that facilitates the amended filings. Specifically, the alternate instruction read as follows:

It is not improper to amend or add patent claims intended to cover a competitor's product about which the applicant has learned during the prosecution of the patent application, including a continuation or divisional patent application, provided that the claims are supported by the original patent application ... [and] provided that the added or amended claims are not based on information obtained by engaging in wrongful conduct.

Rambus, Inc. v. Infineon Tech. AG, 164 F.Supp.2d 743, 774 (E.D.Va.2001). Rambus, however, declined the Court's offer to give this alternate instruction. Id.

Ultimately, the jury found Rambus liable on Infineon's counterclaim for actual and constructive fraud. The Court granted Rambus' post-trial motion for JMOL as to the constructive fraud claim and as to that part of the actual fraud verdict that related to the DDR-SDRAM standard of JEDEC. Rambus, Inc., 164 F.Supp.2d at 767. Rambus' post-verdict motion for JMOL on the fraud verdict as it related to the SDRAM standard was denied and judgment was entered on that verdict.

On appeal, the United States Court of Appeals for the Federal Circuit affirmed in part and reversed in part. Rambus, Inc. v. Infineon Tech. AG, 318 F.3d 1081, 1106 (Fed.Cir.2003). Respecting the fraud verdict, the court held that the JEDEC patent disclosure policy applied only to patent claims that reasonably read on or covered the standard under consideration by JEDEC and that, although Rambus wanted to obtain claims covering SDRAM standards, it did not in fact obtain any SDRAM patent claims while it was a member of JEDEC. Rambus, Inc., 318 F.3d at 1103-04. In reaching this conclusion, the Federal Circuit stated:

The record shows that Rambus's claimed technology did not fall within the JEDEC disclosure duty. The record shows at most that Rambus wanted to obtain claims covering the SDRAM instead. Some of that evidence does not put Rambus in the best light. Rambus thought it could cover the SDRAM standard and tried to do so while a member of an open standards-setting committee. While such actions impeach Rambus's business ethics, the record does not contain substantial evidence that Rambus breached its duty under the EIA/JEDEC policy.

Id. at 1104. The Federal Circuit thereafter set aside the fraud verdict, reversed this Court's construction of five of the disputed claim terms contained in the...