Samsung MSJ

8/14/2019 Samsung MSJ

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MOTION FOR ENTRY OF JUDGMENT OR, IN THE

ALTERNATIVE, MOTION FOR SUMMARY JUDGMENT

Case No. C 05-00334 RMW



[Attorneys Listed On Signature Page]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

RAMBUS INC.,

Plaintiff,

v.

HYNIX SEMICONDUCTOR, INC., et al.,

Defendants.


NOTICE OF MOTION AND MOTIONFOR ENTRY OF JUDGMENT OF

UNENFORCEABILITY OF RAMBUSSASSERTED PATENTS AS AGAINSTSAMSUNG AND DISMISSAL OFRAMBUSS PATENT-INFRINGEMENT CLAIMS AGAINSTSAMSUNG OR, IN THEALTERNATIVE, FOR SUMMARYJUDGMENT

Hearing Date: January 30, 2009Time: 2:00 p.m.Courtroom: 6Honorable Ronald M. Whyte

RAMBUS INC.,

Plaintiff,

v.

SAMSUNG ELECTRONICS CO., LTD., et al.,

Defendants.


RAMBUS INC.,

Plaintiff,

v.

MICRON TECHNOLOGY, INC., et al.,

Defendants.


Case 5:05-cv-00334-RMW Document 3126 Filed 01/19/2009 Page 1 of 33


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TABLE OF CONTENTS

Page(s)






I. PRELIMINARY STATEMENT .................................................................................................. 1

II. BACKGROUND AND STATEMENT OF UNDISPUTED FACTS.........................................3

A. The Eastern District of Virginia Finds Spoliation and Unclean Hands in theInfineon Litigation After a Full Bench Trial ____................................................ 3

B. This Court Reaches A Different Outcome In Hynix I Based Mainly OnThe Foreseeability Standard That It Applies ...........................................................4

C. Samsung and Rambus Litigate the Spoliation Defense and Rambus AgainLoses ........................................................................................................................5

D. Rambus Re-Litigates, and Once Again Loses, the Unclean Hands andSpoliation Defense to Its Patent Claims in the Delaware Court _____ ...................6

E. Samsung Presents Its Unclean-Hands and Spoliation Case in This Court...............8

III. THE DELAWARE COURTS DECISION IS BINDING UPON RAMBUS ANDREQUIRES DISMISSAL OF RAMBUSS INFRINGEMENT CLAIMSAGAINST SAMSUNG........................................................................................................9

A. Legal Standards........................................................................................................ 9

B. The Elements Of Collateral Estoppel Are Satisfied Here......................................10

1. Rambus Had a Full and Fair Opportunity to Litigate ................................10

2. The Identity of Issues Requirement Is Met................................................11

a. Different Patents and Products.......................................................13

b. Samsungs RDRAM and SDR/SDRAM Licenses WithRambus...........................................................................................14

c. Voluntary Dismissal.......................................................................15

d. Remedy ..........................................................................................17

e. Rambuss Unclean-Hands Defense................................................19

3. The Spoliation/Unclean Hands Issue Was Actually Litigated andNecessarily Decided in Delaware ..............................................................19

4. The Delaware Decision Meets The Finality Requirement.........................20

5. Rambuss Fairness Arguments Do Not Apply Because SamsungsRequest for Collateral Estoppel is Defensive, Not Offensive....................21

6. The Fairness Standard for Offensive Collateral Estoppel Does NotApply, But If It Did, It Is Clearly Satisfied Here....................................... 22



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TABLE OF CONTENTS(continued)

Page(s)






a. Inconsistent Decisions.................................................................... 23

b. Procedural Opportunity..................................................................24

C. Rambuss Patent Claims Should Be Dismissed Even If the DelawareCourts Decision Is Not Given Full Preclusive Effect ........................................... 25

IV. CONCLUSION........................................................................................................................25



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TABLE OF AUTHORITIES

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iii




CASES

A.B. Dick Co. v. Burroughs Corp.,713 F.2d 700 (Fed. Cir. 1983)................................................................................................. 13

Amadeo v. Principal Mutual Life Insurance Co.,290 F.3d 1152 (9th Cir. 2001)................................................................................................. 19

Americana Fabrics, Inc. v. L&L Textiles, Inc.,754 F.2d 1524 (9th Cir. 1985)................................................................................................. 24

Aptix Corp. v. Quickturn Design System, Inc.,269 F.3d 1369 (Fed. Cir. 2001)............................................................................................... 18

Blonder-Tongue Laboratories, Inc. v. University of Ill. Foundation,

402 U.S. 313 (1971).......................................................................................................... 21, 22Comair Rotron, Inc. v. Nippon Densan Corp.,

49 F.3d 1535 (Fed. Cir. 1995)................................................................................................. 13

Davis & Cox v. Summa Corp.,751 F.2d 1507 (9th Cir. 1985)................................................................................................... 9

Dodd v. Hood River County,59 F.3d 852 (9th Cir. 1995)....................................................................................................... 9

Fireman's Fund Insurance Co. v. Stites,258 F.3d 1016 (9th Cir. 2001)................................................................................................... 9

In re Baldwin,249 F.3d 912 (9th Cir. 1995)................................................................................................... 20

In re First Actuarial Corp. of Ill.,182 B.R. 178 (W.D. Mich. 1995)...................................................................................... 17, 18

General Excavator Co. v. Keystone Driller Co.,62 F.2d 48 (6th Cir. 1932)....................................................................................................... 18

Gilbert v. Ben-Asher,900 F.2d 1407 (9th Cir. 1990)................................................................................................... 9

Hydranautics v. Filmtec Corp.,204 F.3d 880 (9th Cir. 2000)..................................................................................................... 9

Luben Industrial, Inc. v. United States,707 F.2d 1037 (9th Cir. 1983)........................................................................................... 20, 21

M&T Mortgage Corp. v. Miller, Number CV 2002-5410 (NG) (MDG),2007 WL 2403565 (E.D.N.Y. Aug. 17, 2007)........................................................................ 15



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TABLE OF AUTHORITIES(continued)

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iv




Maciel v. Commissioner of Internal Revenue,489 F.3d 1018 (9th Cir. 2007)................................................................................................. 10

Micron Technology, Inc. v. Rambus Inc.,___ F. Supp. 2d ___, 2009 WL 54887 (D. Del. Jan. 9, 2009) .........................................passim

N.V. Akzo v. E.I. DuPont de Nemours,810 F.2d 1148 (Fed. Cir. 1987)............................................................................................... 17

Osborn v. Knights of Columbus,401 F. Supp. 2d 830 (N.D. Ohio 2005)................................................................................... 24

Parklane Hosiery v. Shore,439 U.S. 322 (1979).................................................................................................... 21, 22, 23

Pena v. Gardner,976 F.2d 469 (9th Cir. 1992)..................................................................................................... 9

Precision Instrument Manufacturing Co. v. Automobile Maintenance Machine Co.,324 U.S. 806 (1945)................................................................................................................ 19

Premier Electric Construction Co. v. National Electric Contractors Association, Inc.,814 F.2d 358 (7th Cir. 1987)................................................................................................... 23

Samsung Electrics Co. v. Rambus Inc.,439 F. Supp. 2d 524 (E.D. Va. 2006).................................................................... 4, 5, 6, 15, 19

Samsung Electrics Co. v. Rambus Inc.,

440 F. Supp. 2d 512 (E.D. Va. 2006)........................................................................................ 5

Samsung Electrics Co. v. Rambus Inc.,523 F.3d 1374 (Fed. Cir.), cert. denied, 129 S. Ct. 279 (2008) ................................................ 6

Sec. People, Inc. v. Medeco Sec. Locks, Inc.,59 F. Supp. 2d 1040 (N.D. Cal. 1999) .................................................................................... 21

Starker v. United States,602 F.2d 1341 (9th Cir. 1979)................................................................................................. 11

State of Idaho Potato Commission v. G&T Terminal Packaging, Inc.,425 F.3d 708 (9th Cir. 2005)................................................................................................... 21

T.W. Electric Serv., Inc. v. Pac. Electric Contractors Association ,809 F.2d 626 (9th Cir. 1987)................................................................................................... 10

United States v. ITT Rayonier, Inc.,627 F.2d 996 (9th Cir. 1980)..................................................................................................... 9

FEDERAL STATUTES

35 U.S.C. 285......................................................................................................................... 5, 23



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TABLE OF AUTHORITIES(continued)

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v




28 U.S.C. 1291........................................................................................................................... 20

Fed. R. Civ. P. 56(a)...................................................................................................................... 10

STATE STATUTES

Cal. Bus. & Prof. Code 17200 ................................................................................................... 16

MISCELLANEOUS

18 Wright et al., Federal Practice and Procedure 4407 (1981) .................................................. 16

77 U.S.L.W. 3346 (Nov. 24, 2008) (No. 08-694)......................................................................... 23

Restatement (Second) of Judgments 13 (1982) ......................................................................... 20Restatement (Second) of Judgments 24 (1981) ......................................................................... 16

Restatement (Second) of Judgments 27 (1982) ........................................................................... 9



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NOTICE OF MOTION

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

NOTICE IS GIVEN THAT Samsung Electronics Co., Ltd., Samsung Electronics

America, Inc., Samsung Semiconductor, Inc., and Samsung Austin Semiconductor, L.P

(Samsung) hereby move the Court for entry of a judgment of unenforceability of Rambuss

asserted patents as against Samsung and dismissal of Rambuss patent-infringement claims under

U.S. Patent Nos. 6,182,184, 6,266,285, 6,314,051, 6,324,120, 6,378,020, 6,426,916, 6,452,863

6,546,446, 6,584,037, and 6,751,696 (the Asserted, Elected Patents) and U.S. Patent Nos

5,915,105, 5,953,263, 6,034,918, 6,038,195, 6,067,592, 6,101,152, 6,260,097, 6,564,281

6,697,295, 6,715,020, and 6,807,598 (the Asserted, Unelected Patents) (collectively, the

Asserted Rambus Patents), or, in the alternative, for an order granting summary judgment on

Samsungs unclean-hands defense and dismissing Rambuss patent-infringement claims under the

Asserted Rambus Patents.

This motion shall be heard on January 30, 2009, at 2:00 p.m. in the above-referenced

court, located at 280 South First Street, San Jose, California 95110, before the Honorable Ronald

M. Whyte.

Samsung bases its motion on this Notice of Motion, the Memorandum of Points and

Authorities set forth below, the accompanying Declaration of Steven S. Cherensky in Support of

Motion for Entry of Judgment of Unenforceability of Rambuss Asserted Patents as Against

Samsung and Dismissal of Rambuss Patent Infringement Claims Against Samsung or, in the

Alternative, for Summary Judgment and exhibits thereto, the accompanying Motion to Take

Judicial Notice and Re-Open the Record of the Unclean Hands September Trial Solely To Admit

Evidence Related to Collateral Estoppel, and such other evidence and argument that may properly

come before the Court.



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I. PRELIMINARY STATEMENT

The intentional, systematic, and widespread destruction of evidence in anticipation of

litigation is abhorrent to our judicial system, and is viewed as such by the law. Such destruction

by design frustrates the search for truth and impugns the integrity of the litigation process

Rambus engaged in these unlawful acts according to the decisions of two United States District

Courts. These courts found that Rambus destroyed millions of pages of documents related to all

aspects of its business, including its patent files, for the express purpose of preparing for planned

and foreseeable litigation with DRAM manufacturers including the defendants here, and

specifically including Samsung. Judge Robert E. Payne of the Eastern District of Virginia has

twice found (once in 2005 inRambus v. Infineon, before this CourtsHynix Ispoliation trial and

order, and once in 2006 in Samsung v. Rambus, after that order and expressly considering and

addressing it) that Rambus intentionally spoliated evidence. The remedy that Judge Payne

deemed appropriate inInfineon was to find the Rambus patents unenforceable against Infineon (in

Samsung, Rambus had already withdrawn its patent claims, so there were no patent claims to

dismiss). Judge Sue L. Robinson of the District of Delaware similarly found this month, based on

largely the same evidence, that Rambus was guilty of spoliation and that the appropriate remedy

was the unenforceability of Rambuss patents (this time as against Micron).Rambus escaped the consequences of Judge Paynes Infineon ruling by quickly settling

with Infineon before Judge Payne could reduce his ruling to a written order. Of course, Infineon

had tremendous leverage, and was able to obtain a royalty on terms that were materially better

than the so-called reasonable royalty Rambus seeks in this litigation because Rambus

desperately wanted to avoid the collateral-estoppel effect of a written order on its ongoing and

prospective litigations with other DRAM manufacturers, including Samsung. When Judge Payne

reduced his 2006 spoliation determination to writing and issued a 116-page opinion with detailed

factual findings, Rambus again escaped the consequences of that order based on procedural and

jurisdictional maneuvers unrelated to the merits of Judge Paynes spoliation findings.

Rambus should not be permitted to avoid the consequences of Judge Robinsons January

9, 2009 opinion. It is written, detailed, and supported by specific factual findings. Rambus had a



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full and fair opportunity to litigate the spoliation issue in Delaware, Rambuss spoliation was

actually litigated in Delaware and necessarily determined there, and the spoliation issue tried in

Delaware meets the identity-of-issues test required for collateral estoppel to apply here. All of

the elements of collateral estoppel are met.

Nor is this Courts decision inHynix Ia basis to deny the application of Judge Robinsons

order through collateral estoppel. This Court is the only District Court to have found Rambuss

litigation-driven destruction of documents to be unblameworthy. With respect, this Courts

decision in Hynix Iis now clearly in the minority and its correctness is very much in doubt

Further, the Delaware decision is binding on Rambus and this Court, notwithstanding this

Courts contrary conclusion on nearly identical facts in Hynix I, not only because the Delaware

decision is correct (it is), but also because the Delaware decision is binding on Rambus and this

Court andHynix Iis not.

Indeed, consistency, certainty, finality, integrity, and judicial economy are all important

principles underlying our judicial system. Those important principles are all furthered by giving

full collateral-estoppel effect to Judge Robinsons opinion and dismissing Rambuss infringement

claims against Samsung here. The DRAM industry is an important and very large component of

the modern global economy. The defendants in the various Rambus litigations are all significant

players in that industry. No legitimate interest is furthered (and, given the exorbitant royalties

Rambus is seeking, the market will not function properly) if certain manufacturers achieve

competitive advantage over others due to as capricious a factor as their (or Rambuss) ability to

have their case heard in one venue (or by one jurist) rather than another. To the contrary

inconsistent judicial decisions with respect to Rambuss unlawful spoliation (and the resulting

inconsistent economic consequences to similarly-situated market participants) also impugns and

makes a mockery of the litigation process. This is especially true with respect to Samsung, which

did not sue Rambus first and is not in a jurisdiction of its choosing. This Court is now the only

court that can create the necessary consistency, finality, certainty and judicial economy and can

deter future would-be spoliators from following Rambuss lead.

As to Samsung, the application of collateral estoppel is most clearly required because of



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Rambuss egregious forum shopping in order to avoid the effect of their spoliation. As the Cour

will recall from the September trial, Rambus gave Samsung an ultimatum in June 2005 that i

would defer terminating the license agreement only if Samsung would agree to a procedure that

would protect Rambus from having to litigate before Judge Payne, expressly to avoid giving

Judge Payne a chance to finalize his ruling on spoliation. After Samsung refused, Rambus sued

in this court. When Samsung brought suit before Judge Payne, Rambus again did everything i

could to avoid Judge Payne, including a failed transfer motion, agreeing never to sue Samsung on

the patents-in-suit and offering to pay Samsungs fees. This is precisely the situation the law of

collateral estoppel was designed to prevent: the unseemly manipulation of the federal courts by a

party trying to avoid the consequences of one federal courts decision by re-litigating those issues

before another federal court.

The doctrine of collateral estoppel (particularly non-mutual collateral estoppel) evolved

because, in an age of crowded dockets and limited resources, it is contrary to the interests of

society for litigants to be afforded more than one full and fair opportunity for judicial resolution

of the same issue. Rambus has had more than its day in court and a final decision has been

rendered against it regarding its spoliation. It should not be allowed to avoid the consequences of

that decision and have another roll of the dice. Rambuss asserted patents should be held

unenforceable as against Samsung and its infringement claims dismissed.

II. BACKGROUND AND STATEMENT OF UNDISPUTED FACTS

A. The Eastern District of Virginia Finds Spoliation and Unclean Hands in theInfineon Litigation After a Full Bench Trial ____

In June 2000, Rambus sued Infineon for patent infringement in the United States District

Court for the Eastern District of Virginia (the Virginia Court). After extensive discovery, the

Virginia Court held a bench trial in February 2005, on Infineons defense of unclean hands

premised on Rambuss spoliation of evidence. See Cherensky Decl., Ex. 1 [ Rambus Inc. v

Infineon Techs. AG, Civ. No. 3:00cv524 (E.D. Va.), Trial Tr. (Mar. 1, 2005)] at pp. 1138-39).1

1All exhibit references herein are to the Declaration of Steven S. Cherensky, submitted herewith, unless

otherwise noted.



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Based on essentially the same issues that would soon be before this Court and the United States

District Court for the District of Delaware (the Delaware Court), the Virginia Court ruled from

the bench that Infineon had proven, by clear and convincing evidence, that Rambus was liable for

unclean hands in light of its unlawful spoliation, thus barring Rambus from enforcing the patents-

in-suit there (U.S. Patent Nos. 5,593,263, 5,954,804, 6,032,214, and 6,034,918), all of which

stemmed from the 1990 Farmwald-Horowitz application. See, e.g., id. at 1138-39 (Mar. 1, 2005)

(bench ruling); Samsung Elecs. Co. v. Rambus Inc., 439 F. Supp. 2d 524, 528 (E.D. Va. 2006)

Rambus avoided the consequences of its wrongful conduct by quickly settling with Infineon

before a written order issued from the Virginia Court, with materially better terms than the

reasonable royalty Rambus seeks to recover in litigation from the Samsung (and the other

Manufacturers). See Samsung, 439 F. Supp. 2d at 528.

B. This Court Reaches A Different Outcome InHynix I Based Mainly On TheForeseeability Standard That It Applies

Hynixs unclean-hands defense to Rambuss patent-infringement claims was tried to this

Court in the fall of 2005. Hynix Semiconductor, Inc. v. Rambus Inc., No. C-00-20905 RMW

2006 WL 565893, at *1 (N.D. Cal. Jan. 5, 2006). Although the Court found that many documents

were destroyed, see id. at *27, the Court found no spoliation based principally on its finding that

Rambus did not reasonably anticipate litigation until December 1999. Id. at *22. The Courts

finding was explicitly based on the application of a different test for anticipation of litigation, i.e.

that such litigation had be probable instead of just reasonably foreseeable. Id. at *22; see

also Samsung, 439 F. Supp. 2d at 566-69 (reviewing differences in two courts subsidiary

conclusions that explain the divergence in outcomes).2

The Court has so far declined requests to

certify the spoliation/unclean hands issue for interlocutory appeal. See Ex. 2 [Order (Feb. 23

2006)]; Ex. 3 [Order (Dec. 19, 2006)].

2 Although the Court stated in orders issued subsequent to its January 2006 findings and conclusions inHynix Ithat it had not intended to apply a standard different from the reasonably foreseeable standardthe weight placed by this Court in itsHynix Ifindings on six enumerated contingencies confirms that thereasonably probable standard actually applied by the Court for anticipation of litigation was higher thana reasonably foreseeable standard. See Hynix I, 2006 WL 565893, at *22.



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C. Samsung and Rambus Litigate the Spoliation Defense and Rambus AgainLoses

As the Court will recall from the September trial, Rambus, desperate to avoid its one-time

choice of forum in Virginia in order to remain before this Court, issued an ultimatum to Samsung

in June 2005: either permit Rambus to select the forum should litigation ensue in thirty days or

face immediate termination of the license and litigation. Ex. 25 [Sept. Trial Tr.] at 304:19-

306:21. Rambus filed this lawsuit minutes after Samsung informed Rambus that it could no

agree to its demands. Id. at 306:22-307:8. Samsung then filed suit against Rambus in the Eastern

District of Virginia, seeking a declaration that the four patents-in-suit in the Infineon litigation

were unenforceable and that the case was exceptional under 35 U.S.C. 285. Rambus once

again sought to avoid issuance from the Virginia Court of written findings that Rambus was an

unlawful spoliator of evidence. Rambus moved to transfer (unsuccessfully) the Samsung Virginia

case to this Court, issued Samsung covenants not to sue on the four patents-in-suit, obtained

dismissal of Samsungs declaratory-judgment claims of invalidity and unenforceability as moot

and offered to pay Samsung any attorneys fees that might be assessed under 285. The Virginia

Court decided, however, that it retained jurisdiction to conduct sanctions proceedings. Samsung

Elecs. Co. v. Rambus Inc., 440 F. Supp. 2d 512 (E.D. Va. 2006). As a result, the Virginia Cour

conducted a hearing on Samsungs exceptional-case claim, and accepted into evidence the record

of theInfineon bench trial on spoliation and unclean hands from earlier that year.3

The Virginia

Court also ordered the submission of the transcript and exhibits from the Hynix Iunclean hands

trial, which included a cross-reference index correlating the Hynix Iexhibits to the Infineon

exhibits. See Ex. 9 [E.D. Va.Docket at D.I. 132].

On July 18, 2006, the Virginia Court issued a lengthy decision that Rambus spoliated

evidence related to the patents-in-suit and that such misconduct rendered the case exceptional

Samsung, 439 F. Supp. 2d at 544-65. In reaching that decision, the Virginia Court decided

essentially the same issues that were later presented to the Delaware Court and reached the same

3See Ex. 5 [E.D. Va. Docket at D.I. 82]; Ex. 6 [Hearing Tr. (Dec. 15, 2005)] at 11:9-14; Ex. 7 [SamsungSubmission ofInfineon Record (E.D. Va. Nov. 15, 2005)]; Ex. 8 [Rambus Inc.s Objections to Filing bySamsung (E.D. Va. Nov. 22, 2005) (submitting supplementalInfineon record materials)].



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conclusions. See, e.g., id. at 541-51 (Rambuss spoliation began in 1998 in the context of

implementing its litigation strategy aimed at manufacturers of JEDEC-compliant DRAM); id. a

538-39, 540 n.11 (Rambuss spoliation was intentional and willful); id. at 562 (the evidence

destroyed was relevant to potential litigation with Samsung, one of the targeted manufacturers);

id. at 561, 562 (Samsung had met its burden to show prejudice). Rambus appealed to the Federa

Circuitnoton any merits basis, but rather on procedural and jurisdictional grounds. Based on

these non-merits arguments, Rambus avoided the consequences of its misconduct a second time

See Samsung Elecs. Co. v. Rambus Inc., 523 F.3d 1374 (Fed. Cir.), cert. denied, 129 S. Ct. 279

(2008).

D. Rambus Re-Litigates, and Once Again Loses, the Unclean Hands andSpoliation Defense to Its Patent Claims in the Delaware Court _____

After Micron initiated a lawsuit seeking a declaratory judgment of no infringement of

certain of Rambuss patents in Delaware in 2000, Rambus counterclaimed and Micron raised an

unclean-hands defense. Following broad discovery, the Delaware Court held a bench trial in late

2007 on the issues of Rambuss spoliation of evidence and unclean hands. During the five-day

trial, the Court heard testimony from twenty-one witnesses (ten of them live) and admitted 280

exhibits. See Ex. 10 [Micron Tech., Inc. v. Rambus Inc., No. 1:00-cv-00792-SLR, Trial Tr. (D

Del. Nov. 8-9, 13-15, 2007)]; Ex. 11 [D. Del. Docket at D.I. 1068]. Two rounds of extensive

post-trial briefing and closing argument followed.4

On January 9, 2009, the Delaware Court issued a decision and order that the patents-at-

issue were unenforceable against Micron. Micron Tech., Inc. v. Rambus Inc., ___ F. Supp. 2d

___, 2009 WL 54887 (D. Del. Jan. 9, 2009). To reach its decision, the Delaware Court made

several determinations which resolved the same dispositive issues that are raised by Samsungs

4 See, e.g., Ex. 12 [Microns Post-Trial Br. Regarding Rambuss Duty to Preserve Evidence (Feb. 5

2008)]; Ex. 13 [Post-Trial Oppn Br. of Rambus Inc. on the Issue of When the Duty to Preserve EvidenceArose (Mar. 27, 2008)]; Ex. 14 [Microns Post-Trial Reply Br. Regarding When Rambuss Duty toPreserve Evidence Arose (Apr. 30, 2008)]; Ex. 15 [Post-Trial Br. of Rambus Inc. on Microns UncleanHands Defense (June 30, 2008)]; Ex. 16 [Microns Post-Trial Br. Regarding Rambuss LitigationMisconduct and the Proper Sanction for Rambuss Spoliation (June 30, 2008)]; Ex. 17 [Rambus Inc.sPost-Trial Br. in Response to Microns Br. Regarding Rambuss Alleged Litigation Misconduct andSanctions (Aug. 4, 2008)]; Ex. 18 [Microns Reply Post-Trial Br. Regarding Rambuss LitigationMisconduct and the Proper Sanction for Rambuss Spoliation (Aug. 4, 2008)].



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unclean-hands defense here: (1) when Rambus did foresee or should have foreseen litigation

against manufacturers of JEDEC-Complaint DRAMs,Micron CL 55 (concluding that litigation

was foreseeable by no later than December 1998); (2) that Rambus failed to preserve evidence

that it knew or should have known was relevant to litigation (e.g., internal documents relevant to

affirmative defenses arising from Rambuss conduct at JEDEC), id. (concluding that Rambus

should have known the documents it was destroying would become relevant and material in the

future because of its licensing and litigation strategy); (3) that Rambus formulated and

implemented its document-retention policy in bad faith, id. 55 (finding that all documents

destroyed, including under the document-retention policy, after December 1998 to have been

destroyed in bad faith), id. 57 (concluding that showing of bad faith is so clear and convincing

that the showing of prejudice can be proportionally less); (4) that Micronas a JEDEC

manufacturer of accused productswas prejudiced by Rambuss document destruction in its

defense of Rambuss patent claims, id. 56-57 (concluding that the ability to bring conduct-

based claims or defenses against Rambus was prejudiced because such claims and defenses are

furthered by evidence of a non-public nature, i.e., Rambus internal documents, and that the record

shows that the destroyed documents related to all aspects of Rambuss business);5

and (5) the

appropriate remedy for Rambuss bad faith and harmful document destruction, id. 57

(concluding that dismissal is the least harsh sanction that both avoids substantial unfairness to

Micron and deters such conduct in the future because the spoliation was so widespread, the

integrity of the litigation process was impugned, and an adverse inference would be meaningless).

Micron, 2009 WL 54887, at *13.

The Delaware Court had twelve patents before it, four of which are also at issue in this

litigation, and all of which stem from the original 1990 Farmwald-Horowitz application (as do all

of the patents-at-issue here): U.S. Patent Nos. 6,324,120, 6,378,020, 6,426,916, and 6,452,863

Compare Micron, 2009 WL 54887, at *14, with Case No. 05-02298 at D.I. 1 [Compl.] at 8-10

5 Samsung also asserted the same core allegations related to these conduct defenses. See Case No. C 05-

2298 at D.I. 39 [Samsungs 2d Am. Answer., Affirmative Defenses & Countercls. 56-76, 140-74]

Case No. C 05-00334 at D.I. 141 [Samsungs 2d Am. Answ., Aff. Defs. & Countercls. 81-101, 168

202].



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and Case No. C 05-00334 at D.I. 23 [Am. Compl.] at 10-12. In Delaware, the patents-at-issue

were asserted against many of the very same JEDEC-compliant products that Rambus accused of

infringement in this litigation with Samsungthat is, SDR, Mobile SDRAM, SGRAM, DDR

Mobile DDR, DDR SGRAM, and DDR2 products. See Ex. 20 [Rambus Inc.s Supp. & 2d Am

Countercls. (D. Del.)] at 4; Case No. 05-02298 at D.I. 1 [Compl.] at 3-4; Case No. C 05-00334 at

D.I. 23 [Am. Compl.] at 5. Notably, the same JEDEC-standard accused features are at issue in

this case and in the Delaware case. Indeed, Rambus asserts that every Samsung accused produc

contains one or more of accused features that Rambus also claims are found in the accused

products in Delaware. Compare Ex. 4 [Expert Report of Robert Murphy (Sept. 5, 2008)] at

41-48, 89, 93, 105 with Ex. 19 [Expert Report of William Huber (Aug. 16, 2001)] at 24-28.

E. Samsung Presents Its Unclean-Hands and Spoliation Case in This CourtFor the fifth time (and the second time in this Court), Rambus has (thus far) successfully

sought to re-litigate the unclean hands and spoliation defense to its patent claims. In trying its

unclean-hands defense, Samsung has demonstrated the erroneous nature of the Courts

conclusions in its Hynix Iunclean-hands decision. See Case No. C 05-00334 at D.I. 2354

[Samsungs Post-Trial Proposed Findings of Fact and Conclusions of Law Regarding Spoliation

and Unclean Hands (Oct. 7, 2008) (hereinafter Samsung Br. Regarding Spoliation)] at 3-9.

Samsung and Rambus have submitted the following issues for the Courts resolution, all

of which were also considered and decided by the Delaware Court: (1) whether litigation with

DRAM manufacturers, here Samsung (Micron in Delaware), was reasonably foreseeable; (2)

whether Rambus acted in bad faith in developing and implementing its document destruction

policy; (3) whether the destroyed documents were relevant to claims at issue, (4) whether the

document destruction prejudiced Samsung (Micron in Delaware); and (5) whether dismissal of

Rambuss patent-infringement claims is an appropriate remedy. See, e.g., Case No. C 05-00334

atD.I. 2354 [Samsung Br. Regarding Spoliation].



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III. THE DELAWARE COURTS DECISION IS BINDING UPON RAMBUS ANDREQUIRES DISMISSAL OF RAMBUSS INFRINGEMENT CLAIMS AGAINST

SAMSUNG

A. Legal StandardsThe doctrine of collateral estoppel or issue preclusion is intended to promote efficiency in

the judicial system by avoiding repeated litigation over the same issues. Gilbert v. Ben-Asher

900 F.2d 1407, 1409-10 (9th Cir. 1990). The doctrine provides that once an issue is actually

litigated and necessarily determined, that determination is conclusive in subsequent suits based on

a different cause of action but involving a party or privy to the prior litigation. United States v

ITT Rayonier, Inc., 627 F.2d 996, 1000 (9th Cir. 1980).

Under Ninth Circuit law, a party asserting collateral estoppel must establish that: (1) there

was a full and fair opportunity to litigate the issue in the previous action; (2) the issue was

actually litigated in that action; (3) the issue was lost as a result of a final judgment in that action;

and (4) the party against whom collateral estoppel is asserted was a party or in privity with a party

in the previous action. Pena v. Gardner, 976 F.2d 469, 472 (9th Cir. 1992).6 A collateral

estoppel determination is to be decided by the court after making any findings necessary to reach

its conclusion. Davis & Cox v. Summa Corp., 751 F.2d 1507, 1519 (9th Cir. 1985) (holding that

collateral estoppel is a mixed question of law and fact in which law predominates);Firemans

Fund Ins. Co. v. Stites, 258 F.3d 1016, 1020 (9th Cir. 2001)(holding that collateral estoppel is

treated as a question of law). Further,when collateral estoppel applies to a given issue, that issue

is conclusively decided in favor of the party seeking its application. See Dodd v. Hood Rive

County, 59 F.3d 852, 863 (9th Cir. 1995) (stating that another courts determination of an issue of

law should preclude re-litigation of that issue to relieve parties of the costs and vexation of

multiple lawsuits, conserve judicial resources, and encourage reliance on adjudication by

6 Some courts in this Circuit have applied a three-prong test in determining the question of collateralestoppel. See, e.g., Hydranautics v. Filmtec Corp., 204 F.3d 880 (9th Cir. 2000). Both tests, howeverrequire the same elements of proof and both derive from the precept that [w]hen an issue of fact or law isactually litigated and determined by a valid and final judgment, and the determination is essential to thejudgment, the determination is conclusive in a subsequent action between the parties, whether on the sameor a different claim. RESTATEMENT (SECOND) OF JUDGMENTS 27 (1982). As such, the difference isone of form rather than of substance and, as such, is immaterial to the question presented here.



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preventing inconsistent decisions).

If any issue remains after the application of collateral estoppel, then the Court should

decide that issue in light of the factual and legal matters conclusively decided in Samsungs favor

under the collateral estoppel doctrine, as well as any other relevant evidence in the record from

the September trial. See, e.g., Case No. C 05-00334 at D.I. 2354 [Samsung Br. Regarding

Spoliation].7

B. The Elements Of Collateral Estoppel Are Satisfied Here1. Rambus Had a Full and Fair Opportunity to Litigate

An opportunity to litigate is full and fair when: (1) the procedures in the prior and

subsequent action are similar and (2) the parties have incentive to litigate in the two actions. See

Maciel v. Commr of Internal Revenue, 489 F.3d 1018, 1023 (9th Cir. 2007); see also id. (If

procedural opportunities unavailable in the first action could readily cause a different result

in the second action, then the results of the first action generally should not be given preclusive

effect.); id. (If a party had good reason not to contest an issue vigorously during the first action

and did not, in fact, vigorously contest the issue, that party generally should be entitled to re-

litigate the issue during the second action.).

Rambus had available to it in the Delaware Court the same procedural rights as it has here

and certainly there were no procedural opportunities unavailable in Delaware that could be

expected to cause a different result here. Moreover, the risk that Rambuss patents could be

rendered unenforceable by the Delaware Court and, based on that result, here, was certainly no

surprise to Rambus, as both Samsung and Hynix had already brought collateral-estoppel motions

in this Court based on the Virginia Courts spoliation order, all of which were prior to the

Delaware trial. Rambus thus had powerful incentives to hotly contest the issues decided by the

7Because these issues have already been tried and submitted to the Court in the September trial, the

application of the summary judgment standard to any remaining disputed issues of fact is not procedurallyappropriate as to Samsung. Nevertheless, as demonstrated below, and in Samsungs submissions inconnection with the September trial, Samsung is entitled to judgment as a matter of law regardless ofwhich standard applies at this stage of the proceeding. See Fed. R. Civ. P. 56(a); T.W. Elec. Serv., Inc. vPac. Elec. Contractors Assn, 809 F.2d 626, 630 (9th Cir. 1987) (stating that summary judgment shall begranted when evidence shows that there is no genuine issue as to any material fact and that the movingparty is entitled to judgment as a matter of law).



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Delaware Court, and Rambus did just that. As a result, there is no question that Rambus had a

full and fair opportunity to litigate these issues in Delaware.

2. The Identity of Issues Requirement Is MetThe identity-of-issues requirement of collateral estoppel is analyzed under a four-factor

test: (1) was there a substantial overlap between the evidence or argument advanced in the

second proceeding and that advanced in the first; (2) does the new evidence or argument involve

the application of the same rule of law as that involved in the prior proceeding; (3) could pretrial

preparation and discovery in the first proceeding reasonably be expected to have embraced the

matter to be presented in the second; and (4) how closely related are the claims. Starker v. United

States, 602 F.2d 1341, 1344 (9th Cir. 1979).

There is no question that each of the four Starkerfactors is met when comparing Microns

unclean-hands defense in Delaware and Samsungs unclean-hands defense here. Indeed, the

overwhelming majority of the Delaware Courts findings are equally applicable to Samsung in

this Court as to Micron in Delaware. As the Court is well aware from the September trial, there is

considerable evidence in the record that Samsung, like Micron, was a target of Rambuss

licensing and litigation strategy for patents that Rambus argues cover a set of JEDEC features

found in various combinations in every product Rambus has accused, whether made by Samsung

Micron, Infineon, Hynix or Nanya, and regardless of the forum. In furtherance of its industry-

wide licensing and litigation strategy, Rambus adopted its document-retention policy in bad faith

and destroyed millions of pages of documents relevant to the defenses that all of the

Manufacturers would need to assert in the litigation Rambus was planning.8 For this reason, the

Delaware Courts findings of fact and conclusions of law are equally applicable to Samsung as to

Micron, and in fact the two parties are nearly interchangeable for purposes of this analysis.

Indeed, the evidence relied upon by Micron in support of these issues in Delaware

8 For example, Samsung is identified as a potential litigation target in Karps notes of his February 1998meeting with attorneys from Cooley Godward, HTX 098/MTX 293, in the matrix of business and legafactors used by Rambus to score and rank its potential litigation targets, HTX 151/MTX 468, and in an IPgoals document indicating that Karp was obtaining a reverse-engineering report on a Samsung DDRSDRAM, HTX 376/MTX287all of which are in the record in this case and were also before theDelaware court. See Ex. 12 [Microns Post-Trial Br. Regarding Rambuss Duty to Preserve Evidence(Feb. 5, 2008)].



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included the full array of internal Rambus planning documentsinternal Rambus presentations

and emails, notes from meetings with litigation counsel to discuss Rambuss document-retention

policy and litigation and licensing strategies, invoices and notes from Rambuss outside patent-

prosecution counsel, and invoices from Rambuss litigation counselthat were also relied upon

by Samsung in support of its own unclean-hands defense here. See Cherensky Decl, 31 (listing

spoliation exhibits relied upon both by Micron in Delaware and Samsung here). And the same

arguments made by Micron in Delaware were made by Samsung here. Compare Ex. 12 [Micron

Br. Regarding Spoliation] at 8-10 (arguing that reasonably foreseeable standard applies to

question of when the duty to preserve evidence arises and that dismissal is appropriate where

spoliation is coupled with bad faith and prejudice) with Case No. C 05-00334 at D.I. 2354

[Samsung Br. Regarding Spoliation] at CL 1-6, 39-50, 60-70 (same).

Further, pretrial preparation and discovery in the two proceedings were nearly identical,

since the relevant discovery on the issue of Rambuss unclean hands relates to Rambuss conduct

as revealed through Rambuss internal documents and testimony of Rambuss witnesses, rather

than through manufacturer-specific discovery.9

Finally, the claims at issue in Delaware and here

are identicalan unclean-hands affirmative defense to Rambuss infringement claims based on

allegations of spoliation. All four of the elements set forth by the Restatement thus clearly

militate in favor of a finding that there is an identity of issues sufficient for the application of

collateral estoppel to the Delaware Courts findings.

Notwithstanding the clear correspondence of the issues decided by the Delaware Court

and the issues for decision here, Rambus has identified in its January 13, 2009 brief on collateral-

estoppel issues (Rambus CE Br.) certain discrete issues on the margins that it contends are no

identical. But each of these issues was either decided by the Delaware Court, or is insufficient to

show lack of identity as to the findings and rulings made by the Delaware Court under the Starker

9Indeed, recognizing the substantial overlap in discovery between the various Rambus-related cases,

including the Delaware case, and that the parties did not need as much discovery in the consolidated casesbecause so much discovery relevant to their claims and defenses had already been taken in the Rambus-related cases, the Court limited new discovery in the consolidated cases and ordered that all discoveryalready taken in the Rambus-related cases be produced in the consolidated cases for use by all parties. SeeCase No. C 05-00334 at D.I. 174 [Joint Case Management Order] at 6.



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factors (e.g., substantial overlap between the evidence or argument). Moreover, even if this Court

concludes that an issue is left for resolution after it applies collateral estoppel to the Delaware

Courts decision, it should be readily decided in Samsungs favor, as demonstrated below.

a. Different Patents and ProductsRambus argues that some of the asserted patents and accused products in Delaware are

different than some of those asserted and accused here, and hence that the issues relating to the

patents and products not at issue in Delaware are not identical to the issues to be decided here

See Rambus CE Br. at 10. Rambus is mistaken for two independent reasons.10

First, as to the accused products, there are seven overlapping accused products between

the Delaware case and the present action. See Ex. 30 [Rambuss Answer & Countercls.] at p. 29

6; Case No. C 05-00334 at D.I. 23 [Rambuss Am. Compl.] at 13; Ex. 23 [chart of

overlapping accused products in related cases]. There can be no question that the Delaware court

decided all issues with respect to those products. Further, the Delaware Court did not rely on

anything that was specific to any of the accused products in Micron in reaching its decision. See,

e.g., Micron CL 56 (finding prejudice because documents relevant to unenforceability defenses

to Rambuss infringement claims, based in part on Rambuss conduct at JEDEC, were destroyed).

With respect to the asserted patents, there are four asserted patents common to both

actionsU.S. Patent Nos. 6,324,120, 6,378,020, 6,426,916, and 6,452,863and seven accused

products in common. See Ex. 20 [Rambuss Supp. & 2d Am. Countercls. at 88-119; Case No

C 05-00334 at D.I. 1 [Rambuss Compl.] at 8. There can likewise be no question that the

components of the Delaware Courts analysis to which the asserted patents relate are identical as

to those patents.

10Rambuss authorities are inapposite. Rambus cites Comair Rotron and A.B. Dickfor the proposition

that a decision as to one patent or one accused product does not bar a decision as to another patent oraccused product. See Rambus CE Br. at 10. But those cases have to do with the collateral-estoppel effecof prior decisions regarding infringement, and focus on the patent-specific nature of the infringementinquiry. See Comair Rotron, Inc. v. Nippon Densan Corp., 49 F.3d 1535, 1539 (Fed. Cir. 1995) (reversingapplication of collateral estoppel of prior noninfringement finding with respect to different patent becauseseparate patents describe separate and distinct inventions);A.B. Dick Co. v. Burroughs Corp., 713 F.2d700, 704 (Fed. Cir. 1983) (reversing application of collateral estoppel of prior infringement finding withrespect to different accused product because judicial statements regarding the scope of patent claims arehypothetical insofar as they purport to resolve the question of whether prior art or products not before thecourt would, respectively, anticipate or infringe the patent claims).



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As to non-overlapping patents, because all of the patents-at-issue in both cases derive

from the same 1990 Farmwald-Horowitz application and relate to the same accused features

virtually any documents relevant to any of the patents in either case are relevant to all of the

patents in both cases. See Ex. 22 [Farmwald-Horowitz patent family tree showing

interrelatedness of patents asserted in Virginia, Delaware,Hynix I, and here]. Examination of the

Micron decision reveals that the Delaware Courts findings are not specific to the patents asserted

in that action, but rather cut across all patent claims deriving from the 1990 Farmwald-Horowitz

application. See Cherensky Decl., 32.

And, finally, Rambus itself has stated that the result in Delaware was reached on the same

facts asHynix I(and thus, here with respect to Samsung). See Ex. 24 [Rambus Jan. 9, 2009 Press

Release].

b. Samsungs RDRAM and SDR/SDRAM Licenses With RambusRambus argues that collateral estoppel should not apply because the Delaware Court did

not decide the issue of foreseeability of litigation in light of two licensing relationships between

Samsung and Rambusthe RDRAM license executed in 1994 and renegotiated in 1997, and the

SDR/DDR license executed in 2000. Rambus CE Br. at 12. But Micron was also an RDRAM

licensee, a fact explicitly noted in the Delaware opinion. See Micron FF 5. Moreover, Rambus

made the same argument in Delaware regarding foreseeability and RDRAMthat Samsung

Micron and others had RDRAM licenses and were committed to RDRAMthat it made in this

Court. See Case No. C 05-00334 at D.I. 2378 [Rambuss Post-trial Proposed Findings of Fact

and Conclusions of Law Regarding Unclean Hands] at 13; Ex. 13 [Post-trial Oppn Br. of

Rambus Inc. on the Issue of When the Duty to Preserve Evidence Arose] at 2. Given the

substantial overlap in argument and evidence and the Delaware Courts finding, there is clearly

no basis for Rambuss contention that the Delaware Court did not consider the impact of an

existing RDRAM-licensing relationship in deciding when litigation against the DRAM

manufacturers targeted by Rambuss licensing and litigation strategy was foreseeable.

Further, Samsungs 2000 SDR/DDR License does not negate the foreseeability of

litigation prior to the execution of that license when much of Rambuss spoliation occurred. In



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the first instance, Rambus made this argument before and it was rejected by the Virginia Court.

See Samsung, 439 F. Supp. 2d at 560. And, indeed, as the Delaware Court noted in its opinion

Samsung was on Rambuss target list well before the parties began negotiations for the

SDR/DDR License in July 2000. See Micron FF 10 (noting that Karp met with Cooley

Godward attorneys in February 1998 and discussed building a case against potential litigation

targets, including Micron, Fujitsu, Samsung, and Hyundai (now Hynix)).

Moreover, Rambuss position at the September trial in defense of Samsungs contract

counterclaims was that Rambus never believed DDR2 or future generations of DRAM were

covered by the 2000 license. See Ex. 25 [Sept. Trial Tr. at 946:7-25]. Although Samsung

disagrees about the scope of the license, what matters for purposes of foreseeability of litigation is

Rambuss state of mind, notwhat the license is found by the Court to cover. Therefore, Samsung

remained in Rambuss view an unlicensed target notwithstanding the 2000 SDR/DDR License.

Finally, even if litigation with Samsung was somehow not foreseeable at the time that

Rambus destroyed millions of pages of documents, the finding of the Delaware Court that

litigation with others was foreseeable was sufficient to create a duty for Rambus to preserve

documents related to its claims regarding JEDEC-compliant memory manufacturers. See, e.g.

M&T Mortgage Corp. v. Miller, No. CV 2002-5410 (NG) (MDG), 2007 WL 2403565, at *6

(E.D.N.Y. Aug. 17, 2007) (spoliation found where party had a duty to preserve documents in a

related litigation). In other words, because Rambus owed a duty to Samsungs competitors and

violated that duty in a way that prejudiced Samsung, Rambus must bear the consequences of that

action with respect to Samsung as well.

c. Voluntary DismissalRambus argues that the issues to be tried are not identical because Samsung is not

asserting an inequitable-conduct defense and dropped its JEDEC-based conduct claims and

defenses, unlike Micron. Rambus thus asserts that Samsung presents different issues than Micron

because it waived all its defenses to which the documents destroyed by Rambus could have been

prejudicial. See Rambus CE Br. at 12-13. Rambuss argument flies in the face of this Courts

proceedings in September and runs contrary to law regarding the construction of voluntary



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dismissals.

The fact that Samsung initially brought, and made every effort to retain, its spoliation

claimsSamsungs dismissal was explicitly without prejudice to the continued assertion of its

unclean-hands defensemakes clear that Samsung in no way intended to waive its ability to

obtain relief on its unclean-hands defense as a result of its voluntary dismissal.11 Indeed, the

September trial proceedings would have been nonsensical if, by virtue of the stipulation signed

before trial began, Samsung had waived a necessary element of the unclean-hands issue. Rambus

never so-argued during pretrial proceedings, barely mentioned the issue in its post-trial spoliation

briefs, and was silent on this point during the spoliation-specific closing argument. Why would

Rambus have agreed to and engaged in (and wasted the Courts and the parties time with)

proceedings and extensive submissions relating specifically and exclusively to spoliation if that

issue had been mooted by Samsungs voluntary dismissals? To the contrary, the parties and the

Court understood that Samsungs voluntary dismissal of certain aspects of certain claims and

defenses did notwaive any aspect of Samsungs unclean-hands defense. See 18 WRIGHT ET AL.

FEDERAL PRACTICE &PROCEDURE 4407 (1981) (A plaintiff who sets forth alternative remedies

in separate counts in his complaint may abandon or dismiss one count without prejudice to his

right to proceed on the other.) (quoting RESTATEMENT (SECOND) OF JUDGMENTS 24 (1981)).

Moreover, Rambus should be estopped from arguing lack of prejudice based on

Samsungs voluntary dismissal of its JEDEC-related grounds of certain conduct-based claims and

defenses where those claims and defenses were dismissed only after Rambuss spoliation

weakened those claims and defenses (as found by the Delaware Court, see Micron CL 56)

which was further evidenced by the adverse jury findings at the conduct trial that also preceded

Samsungs voluntary dismissal. Rambus should not be permitted to benefit from its spoliation as

a result of a construction of Samsungs voluntary dismissal that guts Samsungs unclean-hands

11 See D.I. 2210 [Stipulation and Order Dismissing Portions of Certain Claims and Defenses withPrejudice] (carving JEDEC and Steinberg-related grounds out of Samsungs equitable estoppel defenseand its counterclaims for a declaratory judgment of unenforceability and for violation of Cal. Bus. & Prof.Code 17200, but retaining spoliation-based grounds of those claims and defenses); D.I. 2086 [JointPretrial Statement) (including Samsungs unclean-hands defense among issues to be tried in Septembertrial]; D.I. 2354 [Samsung Br. Regarding Spoliation] at CL 60-70 (requesting dismissal of Rambusspatents as remedy for Samsungs unclean-hands defense).



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defense. Samsungs dismissal of certain aspects of its conduct-based claims and defenses should

not be construed so as to prejudice Samsungs ability to obtain relief on its unclean-hands

defense.

d. RemedyRambus also argues that the identity-of-issues element is not met because the Delaware

Court decided different issues with respect to the appropriate remedy for Rambuss spoliation

than are presented here. See Rambus CE Br. at 13-14.

First, Rambus argues that a finding that dismissal was warranted as to Micron is not a

finding as to Samsung because the issue of prejudice is not precisely the same in both cases. The

Delaware Court determined that dismissal was the least harsh available sanction that would serve

both to avoid substantial unfairness to Micron and to deter such conduct in the future. See

Micron CL 57.12 The second prong of this findingthat only dismissal would serve to deter

Rambuss conduct in the futureis clearly not specific to Micron, and thus the Delaware Court

decided the identical issue that is presented here. The prejudice prong is also not specific to

Micron. Rather, the Delaware Courts findings on the issue of prejudice apply with equal force to

any manufacturer of non-compliant memories against whom Rambus seeks to enforce its

Farmwald/Horowitz patents that Rambus claims relate to the accused features in all of the

accused products here and in Delaware. See Exs. 22 and 23 [charts showing relationship of

patents and products at issue in Delaware and here]. Because Samsung is thus nearly identically

situated with Micron for purposes of the Delaware Courts determination that dismissal is the

only appropriate remedy (same prejudice, same misconduct to be deterred), the remedy granted in

Micron is subject to the application of collateral estoppel here. See In re First Actuarial Corp. of

Ill., 182 B.R. 178, 183 (W.D. Mich. 1995) (applying offensive non-mutual collateral estoppel to

prior courts determination of rights and remedies available under contract where plaintiffs in

12 The Delaware Court also found, citing Federal Circuit law equally applicable here, that because theevidence of Rambuss bad faith is so clear and convincing, Microns showing of prejudice could beproportionally less and still satisfy the clear and convincing standard of proof that the Delaware courtimposed. SeeMicron CL 49, 56 (citing N.V. Akzo v. E.I. DuPont de Nemours, 810 F.2d 1148, 1153(Fed. Cir. 1987)). The bad-faith finding is Rambus-specific and applies equally here. AccordinglySamsungs showing of prejudice, even if it is not presumed, can likewise be proportionally less whenbalanced with the compelling evidence of Rambuss bad faith.



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second action were nearly identically situated under the contract as the plaintiffs in the first

action).

Second, Rambus argues that the dismissal remedy in the Delaware case was based in part

on a finding of litigation misconduct, which is also case-specific. See Rambus CE Br. at 14. But

as a preliminary matter, a careful reading of the Micron opinion demonstrates that to the exten

the court considered litigation misconduct, it was to establish Rambuss bad faith and an overall

scheme of spoliation and litigation. See Micron CL 38 (noting that Rambus employees did not

inform outside counsel of shred days and did not inform Rambuss 30(b)(6) designee about the

degaussing of back-up tapes or of the scope of the document destruction). Ultimately the court

applied a sanction based on a finding of spoliation, not litigation misconduct. See id. CL 57

(In determining which of the potential sanctionsfor spoliation should be applied ).

Furthermore, the court in Keystone Drillermade clear that prior litigation misconduct can

provide the basis for a finding of unclean hands. Gen. Excavator Co. v. Keystone Driller Co., 62

F.2d 48 (6th Cir. 1932) (rejecting contention that litigation misconduct, where plaintiff in earlier

suit involving same patent had taken steps to suppress evidence of prior use, could not support

prohibiting prosecution of infringement suit based on unclean hands). Aptix, relied upon by

Rambus, does not contradict this (and in fact says nothing about collateral estoppel), but rather

merely holds that a finding of unclean hands in one case will not bar a plaintiff from seeking

relief in another case if the right claimed in that suit did not arise as a result of the conduct giving

rise to the finding of unclean hands. Aptix Corp. v. Quickturn Design Sys., Inc., 269 F.3d 1369

1376 (Fed. Cir. 2001).

Finally, in this consolidated case, Rambuss misconduct (the essence of which is that its

witnesses withheld and denied the truth about Rambuss unlawful spoliation of evidence in

discovery) has long been part ofand has equally infectedthis case by virtue of the Courts

Joint Case Management Order. Indeed, most of the litigation misconduct cited in by the

Delaware court originally occurred in other Rambus cases and became part of the record in

Delaware, see Micron CL 37, 39 (noting false testimony that occurred in the course of

Rambuss litigation with Hynix and Infineon), just as it is part of the record here, see D.I. 2354



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[Samsung Br. Regarding Spoliation] at FF 243, 251 (citing same false testimony).

e. Rambuss Unclean-Hands DefenseFinally, Rambus argues that the issues to be tried are not identical because Rambus has

alleged that Samsung spoliated evidence and has unclean hands, but no such allegations were

raised with respect to Micron. Rambus thus asserts that Samsungs unclean-hands defense is

irreparably tarnished, and that the impact of Samsungs own conduct on the Courts equitable

discretion was not decided in the Delaware case. See Rambus CE Br. at 12.

This argument fails for several reasons. First, Rambus abandoned any claims of spoliation

by Samsung in its closing argument at the September trial. Although Rambus discussed

Samsungs alleged document-destruction, it explicitly retreated from any claim that Samsungs

conduct constituted spoliation. See, e.g., Ex. 25 [Sept. Trial Tr. at 1366:21-1367:4]. Second

Rambus is well aware that its spoliation argument is spurious because it made the same

arguments in the Virginia Court and they were soundly rejected. SeeSamsung, 439 F. Supp. 2d at

536-37. Third, and in any event, whether Samsung committed any spoliation or has unclean

hands is immaterial to Samsungs unclean-hands defense based on Rambuss spoliation. If the

plaintiff has unclean hands and seeks equitable relief, the defendants own improper behavior

serves as no bar to its equitable defenses. Precision Instrument Mfg. Co. v. Auto. Maint. Mach

Co., 324 U.S. 806, 814 (1945) (holding that doctrine of unclean hands is a self-imposed

ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad faith

relative to the matter in which he seeks relief, however improper may have been the behavior of

the defendant).

3. The Spoliation/Unclean Hands Issue Was Actually Litigated andNecessarily Decided in Delaware

In its January 13, 2009 brief, Rambus did not dispute that the issues related to its

spoliation, the harm it caused and the proper remedy to address it were actually litigated in

Delaware. Nor could it in light of the factsa five-day bench trial, two rounds of post-trial

briefing and closing arguments concerning the essential matters raised by Samsungs unclean

hands and spoliation related defenses. See D.I. 3105 [Micron Jan. 13, 2009 Ltr.] at 3; Amadeo v



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Principal Mut. Life Ins. Co., 290 F.3d 1152, 1159 (9th Cir. 2001); In re Baldwin, 249 F.3d 912

919 (9th Cir. 1995).

Moreover, the Delaware Court decided these issues expressly or by necessary implication

in its 33-page decision and order. See, e.g., Baldwin, 249 F.3d at 919 (Kilpatricks sole claim

against Baldwin was that he acted intending to cause him injury, either by violently striking him

or assisting others in doing so. Under these circumstances, the state court could not have granted

judgment to Kilpatrick unless it found that Baldwin intentionally acted so as to injure Kilpatrick

Therefore, we conclude that the state court necessarily decided that Baldwin intentionally acted

so as to injure Kilpatrick.). Indeed, the Delaware Court expressly and necessarily decided tha

Rambus failed to preserve evidence it knew or should have known was relevant to litigation that

was reasonably foreseeable (Micron CL 55), that Rambus formulated and implemented its

document-retention policy in bad faith (Micron CL 55, 57), that Rambuss conduct prejudiced

the defense to its patent infringement claims (Micron CL 56-57), that Rambus acted in bad

faith, and that the only appropriate remedy in light of the issues decided against Rambus was to

preclude it from enforcing its patents (Micron CL 57). Because the essential issues pending

before this Court were actually litigated and necessarily decided against Rambus in the Delaware

Court, they should be given preclusive effect here.

4. The Delaware Decision Meets The Finality RequirementThe Delaware Courts opinion satisfies the finality requirement of collateral estoppel. The

factors considered in the Ninth Circuit to make a finality determination for purposes of collateral

estoppel are: (1) whether the decision was not avowedly tentative; (2) whether the parties were

fully heard; (3) whether the court supported its decision with a reasoned opinion, and (4) whether

the decision was subject to an appeal. Luben Indus., Inc. v. United States, 707 F.2d 1037, 1040

(9th Cir. 1983); RESTATEMENT (SECOND) OF JUDGMENTS (1982) 13.

Rambus did not claim that these factors were not satisfied in its 16-page brief, nor could

it. As Rambus has recognized in the past, finality for purposes of collateral estoppel requires only

that the prior decision is sufficiently firm to be accorded conclusive effect; it does not require a

showing of finality in the sense of 28 U.S.C. 1291. Luben, 707 F.2d at 1040 (To be final for



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collateral estoppel purposes, a decision need not possess finality in the sense of 28 U.S.C.

1291. A final judgment for purposes of collateral estoppel can be any prior adjudication of an

issue in another action that is determined to be sufficiently firm to be accorded conclusive

effect.); Sec. People, Inc. v. Medeco Sec. Locks, Inc., 59 F. Supp. 2d 1040, 1045 (N.D. Cal

1999) (finding an interlocutory order sufficiently firm because it was not avowedly tentative, the

record demonstrated that both parties had ample opportunities to be fully heard on the issues, and

a 16-page order set out the reasons supporting the decision). Here, the Delaware Courts opinion

is decisive, not avowedly tentative, and is plainly its final word on the issue of Rambuss

spoliation and unclean hands.

Indeed, in a January 16, 2009 telephonic hearing with Judge Robinson, Rambus expressly

conceded that her opinion was sufficiently final for purposes of collateral estoppel here. Ex. 30

[Jan. 16, 2009 Tr.] at 7. Accordingly, the Delaware Courts decision is an adverse final judgmen

for purposes of collateral estoppel.

5. Rambuss Fairness Arguments Do Not Apply Because SamsungsRequest for Collateral Estoppel is Defensive, Not Offensive

Rambus argues that the Court has broad discretion to apply collateral estoppel and should

be acutely concerned about the fairness of its application based on the incorrect premise that

Samsung seeks to apply offensive collateral estoppel. Offensive collateral estoppel, however

occurs only when a plaintiff seeks to prevent a defendant from re-litigating an issue it lost in a

prior proceeding. SeeParklane Hosiery v. Shore, 439 U.S. 322, 326 (1979) (describing offensive

collateral estoppel in part as a situation where a plaintiff invokes the preclusive effect of a prior

ruling). Here, the defendant, Samsung, seeks to preclude the plaintiff, Rambus, from re-litigating

the same defense to its patent claims that Rambus has previously lost in a case where it asserted

common patents. These facts alone are irreconcilable with the requirements of offensive

collateral estoppel.

Indeed, both the Supreme Court and the Ninth Circuit have construed similar contexts as

defensive nonmutual collateral estoppel. See Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found.

402 U.S. 313, 330 (1971) (precluding patent holder from re-litigating validity of its patents); State



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of Idaho Potato Commn v. G&T Terminal Packaging, Inc., 425 F.3d 708, 714 n.3 (9th Cir. 2005)

(precluding plaintiff from rearguing enforceability of its trademark license agreement).13

Other

relevant considerations reinforce this conclusion. First, Rambus has previously litigated and lost

the unclean hands/spoliation defense in a forum of its choosing as a plaintiff (e.g., in the Eastern

District of Virginia) and it once again seeks to re-litigate the same defense here, once more as a

plaintiff. Second, although Rambus was the declaratory defendant in Delaware, it is a Delaware

corporation and that forum cannot be characterized as unexpected, inconvenient, biased, or

hostile. Third, defensive collateral estoppel is intended to prevent plaintiffs from getting a second

chance at failed litigation merely by switching adversaries, which is what Rambus has done

repeatedly, from Infineon to Hynix to Samsung to Micron. See Blonder-Tongue, 402 U.S. at 328-

30 (Permitting repeated litigation of the same issue as long as the supply of unrelated defendants

holds out reflects either the aura of the gaming table or a lack of discipline and of

disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning

rules of procedure.) (internal quotes omitted); see also Parklane, 439 U.S. at 329. This policy is

especially applicable here where Rambus has already escaped the consequences of its wrongful

spoliation, not once, but twice: first, by settlement with Infineon, and later by depriving the

Virginia Court of jurisdiction, so that it could pursue the same claims in its preferred forum and

once again seek to re-litigate the defense it had previously lost.

6. The Fairness Standard for Offensive Collateral Estoppel Does NotApply, But If It Did, It Is Clearly Satisfied Here

Rambus argues that application of offensive collateral estoppel (which as

discussed above, does not apply here) would be unfair in light of two of the fairness

considerations enumerated in Parklane: the existence of prior inconsistent decisions on the issue

13With respect, Samsung submits that the Courts analysis inHynix Ithat because Rambus was party to

both actions and is defending claims of spoliation, the application of collateral estoppel here is offensiverather than defensive, Ex. 31 [Hynix Semiconductor Inc. v. Rambus Inc., No. CV-00-20905-RMW [OrderDenying Hynixs Motion to Dismiss Patent Claims for Unclean Hands on the Basis of Collateral Estoppel(N.D. Cal. Apr. 22, 2005)]] at 6 n.1, is incorrect. Also, contrary to the argument made by Rambus at thehearing, whether or not a party chose the forum in a prior litigation does not establish whether theapplication of collateral estoppel in a subsequent action is offensive or defensive. Footnote 15 oParklane, which is what Rambus relies on for this proposition, merely states that plaintiffs typicallychoose the forum. Parklane, 439 U.S. at 331 n.15.



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