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Gregory P. Stone (SBN 078329) Fred A. Rowley, Jr. (SBN 192298) MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, 35th Floor Los Angeles, CA 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 Email: Gregory.Stone@mto.com Email: Fred.Rowley@mto.com Peter A. Detre (SBN 182619) MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, CA 94105-2907 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 Email: peter.detre@mto.com Attorneys for RAMBUS INC.

Rollin A. Ransom (SBN 196192) SIDLEY AUSTIN LLP 555 West Fifth Street, Suite 4000 Los Angeles, CA 90013-1010 Telephone: (213) 896-6000 Facsimile: (213) 896-6600 Email: rransom@sidley.com Pierre J. Hubert (Pro Hac Vice) Craig N. Tolliver (Pro Hac Vice) MCKOOL SMITH PC 300 West 6th Street, Suite 1700 Austin, TX 78701 Telephone: (512) 692-8700 Facsimile: (512) 692-8744 Email: phubert@mckoolsmith.com Email: ctolliver@mckoolsmith.com

11 12 UNITED STATES DISTRICT COURT 13 NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION 14 15 HYNIX SEMICONDUCTOR, INC., et al., 16 Plaintiffs, 17 vs. 18 RAMBUS INC., 19 Defendant. 20 21 22 23 24 25 26 27 28
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CASE NO. CV 00-20905 RMW RAMBUSS OPPOSITION TO HYNIXS MOTION TO RELEASE ESCROW ACCOUNT Date: Time: Location: Judge: April 6, 2012 9:00 a.m. Courtroom 6 (4th Flr.) Hon. Ronald M. Whyte

RAMBUSS OPPOSITION TO HYNIXS MOT. TO RELEASE ESCROW ACCOUNT CASE NO. 00-20905-RMW

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Releasing the escrow funds at this moment, when the case is positioned for swift resolution on the merits, would be unnecessary and inefficient. Hynix had stipulated that if the previous final judgment is reversed, the escrow account would be released only in accordance with any further order by the Court. (Dkt. No. 4001, Stipulation and Order Regarding Escrow Accounts, Nov. 24, 2009 (November 2009 Stipulated Order), at 4.) At this juncture, after four rounds of remand briefing, the submission of proposed findings of fact and conclusions of law, and oral argument, this case is poised for entry of final judgment. As the Court has observed, if Rambus emerges as the judgment winner, the existence of the escrow account would simplify greatly the calculation and transfer of royalties due. (Dkt. No. 4115, Order Declining to Lift Hynixs Obligation to Maintain Escrow Account, January 11, 2012 (January 2012 Escrow Order), at 13.) On the other hand, if Hynix prevails, the Court can order the funds promptly released to Hynix. The Court should exercise its discretion to deny Hynixs motion for release of the escrow funds and defer disposition of the escrow account pending entry of final judgment. The Court has already denied a previous attempt by Hynix to seek release of the escrow funds. On January 11, 2012, this Court exercised its discretion to deny Hynixs request to terminate the escrow account for ongoing royalty payments on the unlicensed use of Rambuss inventions. In its order, the Court noted that prudential considerations favored keeping the escrow obligation in place pending the resolution of remand proceedings. (Id.) Now, following the Supreme Courts denial of its petition for certiorari, Hynix again seeks an order terminating this account. Hynix claims that the requested order is justified because Hynix has satisfied each of the conditions precedent for an Order releasing the funds and because equities favor the release of the funds. (Hynixs Mot. to Release Escrow Account, at 3.) These contentions lack merit. Because many of the prudential factors cited by this Court continue to obtain, and because the equities support continued maintenance of the escrow account, this Court should deny Hynixs motion. Contrary to Hynixs argument, the terms of the escrow account do not require the funds to be released upon the denial of Hynixs petition for certiorari. In the November 2009 Stipulated Order setting the conditions of the escrow, Hynix agreed that the funds in the account
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shall be released in accordance with any further order by the Court, but that [n]o funds in the Escrow Account shall be released sooner than ... denial of any petition for writ of certiorari to the United States Supreme Court. (November 2009 Stipulated Order at 4.) The denial of Hynixs petition therefore is a necessary, but not sufficient, condition to terminate the escrow account. The funds may be released only if all of the technical conditions are satisfied and the Court determines that the release of the escrow would be appropriate. Hynix could have sought, and the Court could have issued, an escrow order that made termination automatic. Instead, however, the November 2009 Stipulated Order provides that the funds in the Escrow Account ... shall not be released to any party pending further order by this Court, thereby ensuring that the Court would have a chance to evaluate the equity and utility of maintaining the account. (Id.)1 The equities favor denial of Hynixs motion. Terminating this account would enable Hynix to dissipate the funds held in the account or move them beyond the Courts jurisdiction, and thereby frustrate the Courts ability to effect the relief it previously granted if it decides to reinstate the judgment of infringement that it previously entered. As the Ninth Circuit has explained, this Court has inherent equitable power to issue provisional remedies ancillary to its authority to provide final equitable relief, Reebok Intl, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 559 (9th Cir. 1992) (affirming asset-freeze injunction), including the power to secure property in order to ensure the availability of that final relief, id. Denying early release of the escrow funds pursuant to the terms of the November 2009 Stipulated Order would serve the same purpose here. Hynix concedes that a favorable outcome for Rambus on remand would result in a damages award including the amounts maintained in escrow. (Mot. at 3-4.) Nevertheless, Hynix characterizes Rambuss position as no more than an attempt to attach Hynixs funds to satisfy a potential future judgment. (Id.) This is pure hyperbole. Hynix agreed to the accounts terms, which provide that royalties are held by the escrow agent and may be released only under a joint written payment instruction or following a non-appealable order, judgment or decree from this

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The Court emphasized the same language in its prior order denying Hynixs request to terminate the account following vacatur of the judgment. (January 2012 Escrow Order at 13.) -2RAMBUSS OPPOSITION TO HYNIXS MOT. TO RELEASE ESCROW ACCOUNT CASE NO. 00-20905-RMW

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Court. (See November 2009 Stipulated Order at 6; Allen Decl. ISO Hynixs Mot., Ex. 4 at 5 ( 6).). These terms give this Court discretion to maintain the security. The possibility that Rambus yet may prevail on the merits (January 2012 Escrow Order at 13), the likely issuance of a ruling in the near future, and the comparatively small cost to Hynix (id. at 12) make it more fair and efficient to keep the security in place. Hynix acknowledges that the expenses of maintaining the account are not significant compared to the Accounts balance (Mot. at 3);2 indeed, if Hynix prevails, Hynix stands to recoup at least some of those expenses from the interest earned on the balance, which would go to the party to whom the funds are ultimately released. Hynix complains that preserving these funds in the escrow account prevent[s] Hynix from using this capital for other purposes, despite Hynixs on-going royalty obligations ending almost two years ago. (Mot. at 3.) But the whole purpose of the escrow account was to segregate these royalty payments and prevent their use by Hynix for other purposes. Because the time span between the resolution of Supreme Court proceedingsa necessary but insufficient condition for releasing the escrowand the issuance of this Courts remand ruling is likely to be short, the concerns justifying the escrow account still apply. Nor does the fact that Hynixs obligations to pay future royalties expired with the underlying patents alter Hynixs obligation to pay the past royalties owed to Rambus. Indeed, Hynix stopped making payments to the escrow account after the patents-in-suit expired. As the Court previously explained, the existence of the escrow account would simplify greatly the calculation and transfer of royalties due should Rambus prevail. (January 2012 Escrow Order at 13.)3 The remand proceedings are nearly complete, with Hynixs unclean hands defense fully briefed, argued, and submitted. Should Hynix prevail, the Court can immediately issue an order releasing the escrow funds. Should Rambus prevail, the Court could order the funds transferred to Rambus if Hynix does not obtain a stay of the judgment by posting

Hynixs Annual Administration Fee obligation for the account is $5,000. (Allen Decl., Ex. 4 at Schedule 3.) 3 In its moving papers, Hynix argues that the royalties could be recalculated from the quarterly accounting reports provided to Rambus. (Mot. at 3.) That may be true, although not as easy as Hynix suggests, and in addition, once the escrow account is emptied, the availability of these accounting reports cannot facilitate the transfer of royalties should Rambus prevail.
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the full supersedeas bond required by Fed. R. Civ. P. 62(d). If Hynix seeks relief from the requirement to post a full bond, the escrow funds could be a potential candidate to serve as alternative security for a portion of the judgment, and in that scenario might help to reduce Hynixs bond expenses. For the foregoing reasons, this Court should deny Hynixs motion to release the escrow account and terminate Hynixs obligations under the November 2009 Stipulated Order.

Dated: March 22, 2012

MUNGER, TOLLES & OLSON LLP SIDLEY AUSTIN LLP McKOOL SMITH PC

By:

/s/ Gregory P. Stone Gregory P. Stone Attorneys for RAMBUS INC.

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RAMBUSS OPPOSITION TO HYNIXS MOT. TO RELEASE ESCROW ACCOUNT CASE NO. 00-20905-RMW