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EXHIBIT A

Case5:00-cv-20905-RMW Document4198-1 Filed11/30/12 Page1 of 8

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19384146.1

[PROP.] SUPPLEMENTAL BRIEF RE COURTSDETERMINATION OF RAND RATE PURSUANT

TO 9.21.12 ORDER, CASE NO. CV 00-20905 RMW

Gregory P. Stone (SBN 078329)Steven M. Perry (SBN 106154)MUNGER TOLLES & OLSON LLP355 South Grand Avenue, 35th FloorLos Angeles, CA 90071-1560Telephone: (213) 683-9100Facsimile: (213) 687-3702Email: [email protected];[email protected]

Peter A. Detre (SBN 182619)MUNGER TOLLES & OLSON LLP560 Mission Street, 27th FloorSan Francisco, California 94105Telephone: (415) 512-4000Facsimile: (415) 512-4077Email: [email protected]

Attorneys for RAMBUS INC.

Rollin A. Ransom (SBN 196126)SIDLEY AUSTIN LLP555 West Fifth Street, Suite 4000Los Angeles, CA 90013-1010Telephone: (213) 896-6000;Facsimile: (213) 896-6600Email: [email protected]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

HYNIX SEMICONDUCTOR INC., etal.,

Plaintiffs,

v.

RAMBUS INC.,

Defendant.

CASE NO. CV 00-20905 RMW

RAMBUSS [PROPOSED]SUPPLEMENTAL BRIEF REGARDINGTHE COURTS DETERMINATION OFA RAND RATE PURSUANT TO ITSSEPTEMBER 21, 2012 ORDER

Date: December 19, 2012Time: 2:00 p.m.Ctrm: 6Judge: Hon. Ronald M. Whyte


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19384146.1 -1-[PROP.] SUPPLEMENTAL BRIEF RE COURTS

DETERMINATION OF RAND RATE PURSUANTTO 9.21.12 ORDER, CASE NO. CV 00-20905 RMW

I. INTRODUCTIONIn its September 21, 2012 Order, the Court determined that the sanction most

commensurate with Rambuss conduct was an order strik[ing] from the record evidence

supporting a royalty in excess of a reasonable, non-discriminatory royalty. 9/21/12

Order at 65:10-11. The Court instructed the parties to file a single round of briefs

addressing what a reasonable, non-discriminatory royalty rate would be with respect to

the patents-in-suit. Id. at 65:15-66:1. In accordance with the Order and the parties

stipulations regarding the briefing schedule, Hynix filed its remedy brief on October 30,

2012 and Rambus filed its remedy brief on November 13, 2012.

Despite the Courts order, Hynix filed an Administrative Motion on November 20,

2012 seeking leave to file a supplemental brief, which it attached to its motion (Hynixs

Supp. Brief). On November 26, 2012, Rambus filed its Opposition to Hynixs motion.

As of this date, the Court has not ruled on the motion.

Rambus therefore submits this supplemental brief in an abundance of caution.

Rambuss supplemental brief is necessary because Hynix did not address in its

October 30, 2012 brief the available evidence regarding a reasonable and non-

discriminatory (RAND) rate. See Hynix 10/30/12 Remedy Brief at 9:9-23 (stating that

calculating a RAND rate is a complicated matter and that there is no need to do so).

Instead, Hynix waited to address the RAND issues in its supplemental brief. In order for

Rambus to have an opportunity to respond to Hynixs arguments regarding RAND issues,

as Rambus believes the Court intended, see 9/21/12 Order at 65:18-66:1, Rambus

respectfully requests that the Court consider this brief if Hynixs supplemental brief is

considered.1

1Rambus notes that Hynix has separately filed objections to the Declaration of Brian

Hammer that Rambus filed on November 13, 2012. Rambus will separately respond toHynixs objections prior to the December 19, 2012 hearing.


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II. ARGUMENTA. Hynixs Argument That Rambus Should Have Presented Its Other

DRAM Evidence At The Patent Trial Has No Merit.

Hynix argues in its supplemental brief that the Court should not consider the Other

DRAM rate in connection with a RAND analysis because Rambus did not offer evidence

at the patent trial concerning the Other DRAM clause. Hynix Supp. Brief at 2:1-2.

Hynixs argument is unavailing, for two reasons. First, as Hynix concedes, the

patent jury was told to calculate a reasonable royalty based on a hypothetical negotiation

. . . when sales had begun in early 2000. Hynix 10/30/12 Remedy Brief at 11:20-22,

citing Patent Trial Jury Instruction No. 20. In contrast, the Other DRAM clause was

negotiated in the 1995-1996 time period, four or more years prior to the hypothetical

negotiation described in the jury instruction.

Second, the Court had bifurcated the patent and conduct issues and had ordered

that Hynixs claims that Rambus had misled it during the Other DRAM negotiations

would be tried in the conduct phase. See generally Phase III (Conduct Trial) Findings of

Fact and Conclusions of Law (Phase III Findings), March 3, 2009 (D.E. 3904), at 4:19-

5:11; 6:13-25. As Rambus explained in its 11/13/12 Remedy Brief, the relevance of the

Other DRAM negotiations to the RAND issue arises from the fact that, as the Court has

found, Hynix deliberately sought patent coverage of products like SDRAM in 1995 when

it sought the expansive language in the Other DRAM clause . . . . Phase III Findings at

42:4-7. It is the close factual connection between the Other DRAM negotiations in

1995 and the hypothetical RAND negotiations in the same time period that makes the

former relevant to the latter.2

It is thus self-evident that issues relating to the Other

DRAM negotiations were to be addressed, under the Courts bifurcation order, at the

conduct trial, not the patent trial. See Order on Patent Trial MotionsIn Limine, March 9,

2The parties agree that the RAND negotiations would have occurred in the 1995-96

timeframe. See Hynix 10/30/12 Remedy Brief at 11:25; Weinstein Decl. at 20:14-15.


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2006 at 14:17-17:26 (excluding conduct evidence, such as evidence that Rambus had

misled Hynix about the scope of its intellectual property rights, from the patent trial).

B. Hynixs Argument That The Other DRAM Rate Is IrrelevantBecause Hynix Was Not Aware Of Rambuss Patents On SDRAM

Or DDR In The 1995-1996 Time Period Is Specious.

Hynix also contends that the Other DRAM clause was not negotiated under the

same conditions as a RAND rate would have been negotiated because in the 1995-96

time frame, Hynix was not aware of Rambuss patents on SDR SDRAM or DDR

SDRAM. Hynix Supp. Brief at 4:16-27. There are two fundamental problems with this

argument. First, this Court has found that Hynix suspected that Rambus might have

patent coverage of products like SDRAM in 1995 when it sought the expansive language

in the Other DRAM clause. . . . Id. at 42:4-6. Hynix did not appeal from this finding.

Second, Hynixs suggestion that in a RAND negotiation in 1995 or 1996, Rambus

could have presented Hynix with its patents on SDR SDRAM or DDR SDRAM, Hynix

Supp. Brief at 4:16-27, is simply wrong, for Rambus did not have such patents (or even

patent applications) at the time. See Phase III Findings at 31:1-3 (By the time it

withdrew from JEDEC, Rambus had not filed a patent application claiming a standardized

feature under consideration during its JEDEC membership.).

Consequently, as Rambus explained in its 11/13/12 Remedy Brief, both the Other

DRAM and the RAND negotiations would necessarily have been preceded by a non-

specific warning by Rambus that Hynixs future high-volume DRAMs would likely

infringe unspecified Rambus patents or patent applications that Rambus intended to file.

See Rambus 11/13/12 Remedy Brief at 7:26-28, citing TX3078 at 58 and TX6121 at 1.

C. Hynixs Argument That The Court Has Found That Hynix DidNot Seek Broad Protection For SDRAM Devices In The Other

DRAM Negotiations Is Both False And Irrelevant.

Hynix also contends in its supplemental brief that the Other DRAM negotiations

are irrelevant to the RAND analysis because it is undisputed that Hynix would not


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have agreed to pay the Other DRAM rate on sales of SDR SDRAM and DDR

SDRAM. . . . Hynix Suppl. Brief at 1:19-20. Hynix further states that [t]he Court has

found that at the time of the negotiation of the Other DRAM clause, Dr. K.H. Oh of Hynix

did not believe Other DRAM encompassed Hynixs JEDEC-standard SDRAM. . . .

Id. at 3:25-27, citing Phase III Findings at 37:24-38:1. Both statements are untrue. The

Court explicitly found that Dr. Ohs credibility on this issue was questionable. Phase III

Findings at 52:22-24. Moreover, as noted above, the Court found that Hynix deliberately

sought broad coverage for products like SDRAM when it was negotiating the Other

DRAM rate. Id. at 42:4-6. See also Rambus Remedy Brief at 5:3-24.

In any event, Hynixs contention that Dr. Oh or others at Hynix were only seeking

protection for SLDRAM, Hynix Supp. Brief at 3:27-4:5, even if true, would notbe a basis

for deeming the Other DRAM negotiations to be irrelevant to a RAND analysis. Hynix

cannot dispute that it believed in 1995 that SLDRAM was a candidate technolog[y] to

become the next generation standard. Patent Trial Tr. at 1470:23-1471:2; 1475:3-13

(Lee testimony). The Other DRAM negotiations therefore mirror the hypothetical RAND

negotiations at issue here and provide the best possible evidence of a negotiation between

Rambus and Hynix in the 1995-1996 time period about a license to Rambuss patents

covering Hynixs future high-volume DRAM devices.

D. Hynixs Argument Regarding The Worldwide Nature Of TheLicenses Granted To Other Manufacturers Misses The Point.

Hynix also addresses in its supplemental brief the ERRs it has calculated based

on Rambuss post-litigation licenses with Infineon, Samsung and Elpida. Rambus has

previously demonstrated that those post-litigation license agreements are notRAND

licenses and are inadmissible in any event underLaserDynamics. But if the Court were to

rely upon any of them (and it should not), it cannot simply borrow the royalty rates they

contain, for several reasons. First, all of the licenses that Hynix relies upon for its ERR

analysis have a worldwide royalty base. In its supplemental brief, Hynix argues that the

Court should adopt the rates from those licenses without adjustmentbecause to do


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otherwise would result in an award based on Hynixs extraterritorial activities. Hynix

Supp. Brief at 8:23-24. Hynix misses the point. When a license with a worldwide royalty

base is used as a comparator under Georgia-Pacific, it would be illogical to borrow the

rate from that same license without adjustment. As one court has explained:

[I]t makes neither logical nor factual sense to suggest, as defendant does,that the royalty rate here should correspond precisely to the 1.25 percentrate in those agreements, yet argue that the royalty base should be definedin a fashion dramatically different from how it is defined in thoselicensesa formulation that would significantly diminish the royaltiesrecovered by Boeing. . . . [S]ee alsoBendix Corp., 676 F.2d at 612;Gargoyles, Inc. v. United States, 37 Fed.Cl. 95, 103 (1997) (Generallyspeaking, the royalty rate and royalty base have an inverse relationship, sothat when the base goes down the rate goes up, and vice-versa).

Boeing Co. v. U.S., 86 Fed. Cl. 303, 319 (2009) (citation omitted).

Second, Hynixs arguments about competitive disadvantage have no basis in fact

or law and do not provide any foundation for the punitive result Hynix seeks. Hynix has

now filed two briefs that assert repeatedly that virtually any royalty payment by Hynix for

its decade-long use of the Farmwald-Horowitz inventions would put it at a competitive

disadvantage as compared to other manufacturers. But Hynix has made no showing that

it is similarly situated with the licensees in question, and it has not provided any evidence

about current or future competitive conditions in the DRAM industry. For example,

although Hynix insists that it would be at a competitive disadvantage if it had to pay more

than Infineon, it never addresses the fact that, as Mr. Weinstein acknowledges, Infineon

declared bankruptcy in 2009 and was subsequently liquidated. Weinstein Decl. at 7:16.

Hynix has also provided no information at all about when it intends to pay the judgment

and has not even revealed whether it is the ongoing manufacturing entity (SK Hynix) or

its predecessor, Hynix Semiconductor, that will be responsible for the judgment in this

case. As a consequence, Hynixs arguments regarding future competitive disadvantage

should be ignored. See Civil L.R. 7-5(a).

III. CONCLUSIONFor the foregoing reasons, and as discussed in Rambuss Remedy Brief, the Court

should enter its judgment in the amount set forth in that brief at 20:13 and n.7.


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DATED: November 30, 2012 MUNGER, TOLLES & OLSON LLP

SIDLEY AUSTIN LLP

By: /s/ Steven M. PerrySteven M. Perry

Attorneys for RAMBUS, INC.


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