Hynix v Rambus (San Jose, CA) - RMBS opposition to Hynix's motion to dismiss (Part II)

Defendant Rambus Inc.'s Opposition To Hynix's Motion To Dismiss Patent Claims For Unclean Hands On The Basis Of Collateral Estoppel

Snippets . . . . Part II

Hynix argues that there is an identity of issues simply because it relies on some of the same evidence Infineon relied on and because the same “body of law” defines unclean hands in both cases. Hynix Mem. at 10. Hynix’s arguments are factually and legally wrong. (p.16, l. 21)

Hynix appears to argue exclusively that preclusive effect be given to the Virginia court’s conclusion on unclean hands, but to the extent it also seeks preclusion based on that court’s second conclusory sentence – that Infineon “has proved . . . a spoliation that warrants dismissal” – that effort would fail as well. (p.18, l. 5)

Thus, here Hynix must prove that the litigation over its infringement of the 15 Rambus patents was reasonably foreseeable at the time of the document destruction, that relevant documents were destroyed, that Rambus knew that such documents were relevant to the trial of those claims, and that Hynix has been significantly prejudiced. Such issues were indisputably not conclusively decided in the Virginia litigation. (p18, l. 15)

Hynix’s inability to establish an identity of issues across its and Infineon’s unclean hands defense flows not just from the absence of factual findings (which itself is fatal to Hynix’s argument) but from the nature of the defense itself. Issues of unclean hands are always claim-specific and defendant-specific and cannot be identical across different litigations involving different patents-in-suit and different defendants. (p19, l. 5)

The only unclean hands issue the Virginia court could decide was whether Rambus acted in bad faith toward Infineon and so prejudiced Infineon that it could be inequitable to grant relief to Rambus on the patents it sought to enforce against Infineon. (p. 20, l. 1)

Indeed, recognizing this indisputable point, Judge Payne expressed doubt that his decision could have collateral estoppel effect, and expressly stated that he did not intend his decision to have any effect on other DRAM manufacturers. (p.20, l. 10)

Finally, even if Hynix could satisfy its burden of establishing the elements of collateral estoppel (which it cannot), the Court can and should exercise its “broad discretion” not to apply that doctrine here.

The Supreme Court has said that collateral estoppel is not appropriate (even when the formal elements are present) “if the judgment relied upon as the basis for collateral estoppel is inconsistent with one or more previous judgments in favor of the [party asserted].’ (cite) As the court is aware, the FTC’s Chief Administrative Law Judge found after a three-month trial that there is “no indication that any documents, relevant and material to the disposition of the issues” in the FTC proceedings (which overlap substantially with Hynix’s contentions here) were ever destroyed. (cite) This conclusion, part of a final judgment of 1,664 findings of fact, is directly at odds with the Virginia Court’s conclusions, an inconsistency that this Court has already noted. (p.24, l. 3)

Finally, as previously noted, a finding of “unclean hands” does not by itself warrant dismissal of a plaintiff’s claims; instead, “[t]he relative extent of each party’s wrong upon the other and upon the public should be taken into account, and an equitable balance struck.” (Cite) (p.25, l.11)