John Danforth on the Stay
As he posted at IV.
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Dear Fellow Long Term Rambus Shareholders,
I note that there is a fair amount of “victory lap” taking here tonight by those who predicted that the Delaware spoliation opinion (on January 9) would stop Rambus litigation progress in its tracks. I think that victory lap is premature in a couple of critical repsects (Hynix 1 and the antitrust case). But I will confess to disappointment tonight that the Delaware decision has had the effect that many first feared (when 35 million shares traded immediately the day it issued and, over seven trading days, the stock dropped from $18.50 to $8). As the market feared, we will not have a DDR2/DDR3 trial anytime soon.
I have (I further confess) done my fair share of faulty prognostication here based on “tea leaves” and my sense of logic, justice and judicial efficiency. So I am putting my prognostication hat largely to one side. Tonight, let’s stick (mostly) to what we know from what is in the record.
The stay issued by Judge Whyte today had at its core the following reasoning, which says a lot about how he sees things progressing:
The Micron Del. Action raises difficult issues of preclusion that put into question the wisdom of proceeding to trial while that opinion is in place. The desire to prevent inconsistent outcomes persuades this court that the fairest and most economically efficient way to proceed is to expeditiously enter judgment in the Hynix I Action so that the Federal Circuit can undertake a consolidated review of the spoliation question and bring some finality to the issue. This lingering issue of whether or not Rambus's patents are enforceable (or subject to some lesser sanction) create a pressing need for this court to postpone the patent infringement trial and work swiftly to prepare the Hynix I Action for appellate review. A stay pending appeal of Hynix I may also benefit the parties and expedite the final resolution of these cases, as the decision on appeal may put to restsome vigorously contested claim construction issues that pervade these cases.
In addition, the court's ability to entertain and resolve the disputes churned up by this litigation has limits. Even were it desirable, the court simply lacks the resources to resolve the issues in Hynix I to enable a swift appeal while simultaneously preparing for the consolidated patent trial in the other three cases.4 The court has thus concluded that a stay of the Northern California actions except Hynix I pending the Federal Circuit's resolution of the spoliation appeals will simplify the proceedings and conserve the parties' and the judiciary's resources.
(Emphasis supplied.) What does this reasoning and Judge Whyte’s second order today (denying the Hynix request to have the Delaware spoliation result applied in their Hynix 1 case) tell us about what lies immediately ahead?
1. We will see a Hynix 1 judgment very soon –likely for over $300M and likely with equitable relief (an injunction or a compulsory license or a hybrid of the two) going forward;
2. If the parties cannot agree on a form of judgment in Hynix 1 by the week of February 16 there will be a conference call (not, it appears, further briefings or a full blown hearing) to iron things out any remaining details.
3. Judge Whyte in his second order tonight very clearly and effectively (but with the utmost respect paid to Judge Robinson -- and even with a bit of humor about the “Nuclear Winter” memo that she treated as being of such dire importance) dismantled any semblance of reasoning that might be found in the Delaware order on key elements of spoliation (e.g. whether there was prejudice to Micron and whether the “Nuclear Winter” memo and other facts show the requisite level of “anticipation of litigation”). A nice summary of some of the key parts of Judge Whyte’s second order today can be found here:
www1.investorvillage.com
I will touch on this third point with just a bit of further prognostication.
Judge Whyte’s treatment of the Delaware opinion will be highly respected by Judge Kramer, who presides over the Rambus antitrust case in San Francisco. This coupled with the very different subject matter of the Rambus antitrust case (e.g., it does not rely on patents and it focuses – as Judge Kramer has said – on cartel conduct, not Rambus conduct) makes it unlikely that that Delaware order will result in any meaningful stay of that trial.
As I said before about Micron, avoiding (for now -- and on dubious grounds) the DDR2/DDR3 trial ought to be cold comfort to defendants now facing the even more dangerous antitrust trial in San Francisco. If the DRAM cartel members elect to stick around that long, I very much look forward to watching it.
Best wishes
John Danforth
investorvillage.com |
