Hynix v Rambus, San Jose, CA (4/22/05)

Order Denying Hynix’s Motion To Dismiss Patent Claims For Unclean Hands On The Basis Of Collateral Estoppel (4/22/05) - Snips from Judge Whyte's order . . .

Application of the unclean hands doctrine requires a finding of inequitableness or bad faith by the party to be dismissed. (p.4, l.3)

The doctrine of unclean hands does not apply to any misconduct in the abstract, but requires that the misconduct is related to the claim to which it is asserted as a defense. (p.4, l.6)

The party against whom the doctrine is sought to be invoked directly ‘infected’ the actual cause of action before the court, and is not merely guilty of unrelated improper past conduct. (p.4, l.15)

The court is not blind to the fact that Rambus settled to Infineon litigation, at least in part, to avoid the risk that Judge Payne’s unclean hands findings and dismissal thereon would have collateral estoppel effect. However, that does not mean that the court should conclude that Judge Payne made findings sufficient to justify dismissal of Rambus’s claims against Hynix. (p.5, l.23)

While it is clear he intended to produce a final written decision, absent Judge Payne’s findings of fact and conclusions of law or some other more detailed order setting forth the basis of his ruling on spoliation, this court cannot find that Judge Payne’s judgment is “supported with a reasoned decision.” (p.6, l.2)

Primarily, and as set forth above, the court has reservations about the fairness of applying Judge Payne’s oral ruling without the benefit of his specific factual findings and legal conclusions. (p.7, l.2)

Although Hynix’s argument has some merit, consideration of the relevance and materiality of any documents likely destroyed maybe at least relevant to fashioning an equitable remedy for any unclean hands. (p.7, l.18)

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Donkey Notes:

1) At every turn, it seems clear that Judge Whyte has no intention of allowing VAI and VAII to infect his courtroom.
2) Even if bad behavior is found on the part of Rambus, reflexive and automatic dismissal will not occur. Judge Whyte will carefully weigh all the facts and fashion a remedy.
3) Rambus may be having second thoughts about settling with Infineon as they wonder if Judge Whyte would have been willing and able to exorcize the hex of VAII from his courtroom.

Hat tip to Rambus Investor Relations for posting the order.