Rambus, Inc. v. Infineon Technologies, Ag, CIV. 3:00CV524.

• Decision Date: 18 February 2004
• Docket Number: No. CIV. 3:00CV524.,CIV. 3:00CV524.
• Parties: RAMBUS, INC., Plaintiff, v. INFINEON TECHNOLOGIES AG, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

304 F.Supp.2d 812

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

No. CIV. 3:00CV524.

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

February 18, 2004.

As Amended February 26, 2004.

COPYRIGHT MATERIAL OMITTED

Michael W. Smith, Rowland Braxton Hill, IV, Christian & Barton LLP, Richmond, VA, Alexander H. Rogers, Gray Cary Ware & Freidenrich, LLP, San Diego, CA, Peter Andrew Detre, Martin Douglas Bern, Munger Tolles & Olson LLP, San Francisco, CA, Gregory Paul Stone, Kelly Max Klaus, Sean Paul Gates, Sarah Kurtin, Catherine Florence Augustson, Munger Tolles & Olson LLP, Los Angeles, CA, John Michael Guaragna, Gray Cary LLP, Austin, TX, for Plaintiff.

Charles Torrence Armstrong, Warren Eugene Zirkle, McGuireWoods LLP, McLean, VA, Brian Charles Riopelle, Robert Michael Tyler, McGuireWoods LLP, Richmond, VA, Christian Chadd Taylor, Kirkland & Ellis, Chicago, IL, John Michael Desmarais, Steven John Lever, Michael Aaron Fisher, Scott Richard Samay, Paul Arthur Bondor, Michael Peter Stadnick, Kirkland & Ellis, New York City, for Defendants.

MEMORANDUM OPINION

PAYNE, District Judge.

This matter is before the Court on the motion of the Defendants, Infineon Technologies AG, Infineon Technologies North America Corp. and Infineon Technologies Holding North America, Inc. (hereinafter collectively "Infineon"), pursuant to Fed.R.Civ.P. 15(a), to amend their Answer and Counterclaims against the Plaintiff, Rambus, Inc. ("Rambus"). For the reasons set forth below, the motion for leave to amend is granted.

STATEMENT OF FACTS

To help put Infineon's motion for leave to amend in context, it is necessary briefly to survey the history of the case, including Rambus' complaint, the nature of Infineon's original counterclaims, and the posture of this case following a trial in this Court and an appeal to the United States Court of Appeals for the Federal Circuit.

Rambus develops, secures patents on, and licenses technologies to companies that manufacture semiconductor memory devices. Rambus does not manufacture any such devices, instead relying for revenue on the licensing of its patent portfolio. In 1990, Rambus filed United States Patent Application Serial Number 07/510,898 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 and thus 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 based on its original application. Numerous DRAM patents have issued as a result. These patents are directed to several DRAM-related technologies: Rambus DRAMs ("RDRAMs"), Synchronous Dynamic Random Access Memory ("SDRAM") and Double Data Rate Synchronous Dynamic Random Access Memory ("DDR-SDRAM").¹

On August 8, 2000, Rambus brought this action against Infineon, alleging infringement of several DRAM-technology related patents. In response, Infineon raised numerous affirmative defenses and asserted several counterclaims, some of which related to Rambus' interaction with the Joint Electronic Devices Engineering Council ("JEDEC"), an industry standard-setting body of which Rambus was a member from December 1991 to June 1996. See Rambus, Inc. v. Infineon Tech. AG, 318 F.3d 1081, 1084-86 (Fed.Cir.2003), cert. denied, ___ U.S. ___, 124 S.Ct. 227, 157 L.Ed.2d 135 (2003).

Before trial, an opinion was issued pursuant to Markman v. Westview Instrs. 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 one of the patents-in-suit. After the presentation of Rambus' infringement case, judgment as a matter of law ("JMOL") was granted in Infineon's favor on the remaining patents-in-suit, thereby making it unnecessary for Infineon to proceed on several of its affirmative defenses and counterclaims. Infineon's counterclaim for fraud was tried to a jury which found Rambus liable on Infineon's counterclaim for actual and constructive fraud. This Court, however, granted Rambus' post-trial motion for JMOL as to the constructive fraud claim and as to that part of the actual fraud verdict related to the DDR-SDRAM standard of JEDEC. Rambus, Inc. v. Infineon Tech. AG, 164 F.Supp.2d 743, 767 (E.D.Va.2001). Rambus' motion for JMOL as to the SDRAM standard was denied and judgment was entered on that verdict.

On appeal, a divided panel of the United States Court of Appeals for the Federal Circuit affirmed in part and reversed in part. Rambus, Inc., 318 F.3d at 1106. Respecting the actual fraud verdict, the majority 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 the JEDEC. Rambus, Inc., 318 F.3d at 1103-04. In reaching this conclusion, the Federal Circuit also held that:

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 remanded the case to this Court to "reconsider infringement" in light of its decision respecting claim construction. Id. at 1095.

Now on remand, Infineon has moved for leave to amend its Substituted First Amended Answer and Counterclaims. Specifically, pursuant to Fed.R.Civ.P. 15(a), Infineon seeks leave to amend in order to assert a counterclaim for unfair competition under Cal. Bus. & Prof.Code § 17200.

Infineon's motion must be considered in perspective of the case as it will be tried on remand. To begin, there will be a trial on Rambus' claims that Infineon has infringed Claim 26 of U.S. Patent 5,954,804, Claims 1 and 2 of U.S. Patent 5,953,263, and Claim 18 of U.S. Patent 6,034,918. Transcript of Hearing, January 8, 2004, at 39-59 (hereinafter "1/8/04 Tr."). With but two exceptions, all of Infineon's affirmative defenses will be tried.² Thus, the trial on remand will involve the defenses of non-infringement, invalidity due to indefiniteness, patent misuse, estoppel, laches, laches in the PTO, unclean hands, and inequitable conduct in the procurement of the patents-in-suit. Some of these affirmative defenses will be supported, in part, with evidence about Rambus' conduct as respects JEDEC, but none depend entirely on such evidence.

With the exception of Counts 1, 2, 4, and 12, none of Infineon's original counterclaims remain in the case. See 1/8/04 Tr., at 67-101. Count 12 alleges monopolization in violation of the Sherman Act, 15 U.S.C. § 2.³ Infineon's monopolization counterclaim⁴ alleges that Rambus has acquired monopoly power in the market for DRAM technology and the market for the DRAM's themselves. According to Count 12, Rambus allegedly acquired the monopoly power by a number of means, including intentionally not citing prior art and misleading the PTO to secure patents on DRAM technology that is covered by JEDEC standards, (e.g., ¶¶ 93, 249-252), manipulating JEDEC and acquiring information from JEDEC to achieve these results (e.g., ¶¶ 93, 94, 254), asserting and litigating unlawfully obtained patents against the entire DRAM industry (e.g., ¶¶ 96, 253), and engaging in other predatory, anticompetitive, and exclusionary conduct.⁵

The newly proffered counterclaim, Count 15, alleges that Rambus has violated California's unfair competition statute. Count 15 incorporates by reference much of the alleged misconduct that is the predicate for Count 12, the monopolization count. See Proffered Amended Counterclaim, at ¶ 275 (incorporating ¶¶ 74-196 which in ¶ 242 are incorporated in Count 12).⁶ But, the unfair competition counterclaim goes beyond the allegations of the monopolization count. For instance, to the anticompetitive conduct that is the basis for the monopolization charge, Count 15 adds that Rambus, beginning in 1998, developed and implemented a policy of destroying documents that would be adverse to its posture in forthcoming litigation against DRAM manufacturers that did not take Rambus licenses. And, in support thereof, Infineon cites documents and testimony produced by compulsion earlier in this action. Infineon also alleges that, having destroyed documents as part of its preparation for litigation to enforce its patents, Rambus, in furtherance of its anticompetitive scheme, engaged in various forms of litigation misconduct, such as discovery abuse and tendering false deposition testimony, free from the constraints that would exist had the documents not been destroyed before the litigation began and thereafter. And, Infineon proffers specific evidence to support that assertion as well. Taken together, Infineon alleges that the monopolistic scheme, the manipulative and bad faith participation in the JEDEC-standard setting process, the spoliation of documents as a key ingredient for planned patent litigation, and the deliberate misconduct in DRAM-related litigation is actionable as unfair competition under the California statute.

Against this background, the issue to be decided is whether Infineon's motion for leave to add Count 15 should be granted or whether, as Rambus urges, it should be denied.

DISCUSSION

Infineon contends that Rambus' monopolistic conduct, combined with its...