Tessera

Case 5:06-mc-80024-JW Document 9 Filed 03/07/2006 Page 1 of 10
1 IRELL & MANELLA LLP

Alexander F. Wiles (73596)
2 Ellisen S. Turner (224842)
Trevor V. Stockinger (226359)
3 1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067-4276
4 Telephone: (310)277-1010
tstockinger@irell . com
5
ATTORNEYS FOR PLAINTIFF
6 TESSERA, INC.
8 UNITED STATES ]
9 NORTHERN DISTRI
10 SAN JOSE
11 TESSERA, INC., ) Case No. CV 06-80024-MISC-JW (PVT)

)
12 Plaintiff, ) [Civil Action No. 2-05cv-94, E.D. Tex .]
)
13 vs. ) TESSERA INC.'S REPLY IN SUPPORT OF
) ITS MOTION TO COMPEL
14 MICRON TECHNOLOGY, INC., a Delaware ) PRODUCTION OF DOCUMENTS
corporation, MICRON SEMICONDUCTOR ) PURSUANT TO SUBPOENA TO HYNIX
15 PRODUCTS, INC., an Idaho corporation, ) SEMICONDUCTOR AMERICA, INC.
INFINEON TECHNOLOGIES AG, a German )
16 corporation, INFINEON TECHNOLOGIES ) Date: March 21,2006
RICHMOND, LP, a Delaware corporation, and ) Time: 10:00 am
17 INFINEON TECHNOLOGIES NORTH ) Ctrm: Five
AMERICA CORP., a Delaware corporation, )
18 .) Honorable Patricia V. Trumbull
Defendants. )
19 )
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1RELL & MANELLA LLP 1458458 TESSERA INC.'S REPLY IN SUPPPORT OF ITS
A Registered Limited Liability MOTION TO COMPEL PRODUCTION OF DOCUMENTS
Law Partnership Including
Professional Corporations
1 I. INTRODUCTION
2 Tessera seeks an order compelling Hynix to produce documents that fall within three
3 specific categories of documents - categories that have been further narrowed during the parties'
4 meet and confer discussions. Tessera demonstrated in its moving papers that it is entitled to the
5 order it seeks. Nothing in Hynix's opposition undercuts that showing.
6 The three categories request relevant documents, are narrowly drawn, and do not impose
7 an undue burden on Hynix. First, Tessera requested documents that Hynix already produced in
8 the three litigations specifically referenced in its subpoena. Hynix maintains these documents in
9 an electronic database and has presumably already reviewed them for privilege and confidentiality
10 concerns. (See Stockinger Declaration in Support Tessera's Motion to Compel, Exhibit ("Mot.
11 Ex.") 7 at 2.) It would have been no burden whatsoever simply for Hynix to copy the databases to
12 a hard drive and produce them. Nonetheless, Hynix refused to do so. Instead, Hynix proposed to
13 produce a subset of these documents based on a list of search terms. In an attempt to
14 accommodate this request, Tessera proposed a list of terms to Hynix. (Mot. Ex. 6.) Hynix
15 rejected this list. (Mot. Ex. 7.) Then, without securing Tessera's agreement to any set of search
16 terms, Hynix collected documents based on its own unilateral limitation of search terms, and
17 apparently took upon itself to re-review those documents to further limit the production.
18 (Slenkovich Declaration in Support of Hynix's Opposition to Tessera's Motion to Compel
19 ("Slenkovich Decl."), Ex. F.) In its opposition, Hynix claims that this self-imposed and totally
20 unnecessary process is so burdensome that the Court should accept Hynix's limited production.
21 The Court should reject Hynix's argument. If the process of culling the previously produced
22 documents is burdensome, then the Court should simply order Hynix to do what the subpoena
23 requests - produce all documents that Hynix previously produced in the three named litigations.
24 Hynix's complaints as to the second and third categories - requesting documents relating
25 to Tessera and Tessera technology, and communications and presentations relating to packaging
26 technology used in DRAM - are also not well-taken. Tessera explained to Hynix during the meet
27 and confer process that, as to the second category, it is only seeking documents reflecting
28 communications with third parties relating to Tessera or Tessera technology. (See Stockinger
IRELL & MANELLA LLP
A Registered Limited Liability
Law Partnership Including
1458458 -1- TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
TO COMPEL PRODUCTION OF DOCUMENTS
1 Declaration in Support of Reply In Support of Tessera's Motion to Compel ("Stockinger Decl.") at

2 f2; Tessera's Motion to Compel ("Mot.") at 8:7-12.) Tessera even clarified the term "Tessera
3 technology" for Hynix, a term it should understand fully considering that it is a licensee of
4 Tessera's technology. (Mot. Ex. 6.) And, the third category should not need narrowing. It seeks
5 documents directly relevant to this case. Tessera claims that the defendants and other DRAM
6 manufacturers, including Hynix, conspired to boycott Tessera's packaging technology for use in
7 DRAM. Communications and presentations relating to packaging technology used in or
8 considered for use in DRAM will provide evidence of Hynix's and other DRAM manufacturers'
9 packaging plans, evidence at the heart of Tessera's claims.
10 In addition, Hynix should not be allowed to withhold documents in the possession of its
11 Korean parent. It has already admitted that its American subsidiary has control over the parent's
12 documents for litigation purposes and the case law, which Hynix agrees applies, supports a finding
13 of control. Hynix's opposition is meritless, and Tessera's motion to compel should be granted.
14 Finally, this Court should deny Hynix's request for reimbursement of $70,000 in costs -
15 which appear to be mainly attorneys' fees. These fees were incurred because of Hynix's unilateral
16 decision to unnecessarily re-review documents previously produced in prior litigations in an effort
17 to limit documents it would provide to Tessera. Tessera did not request this; it was willing to take
18 on the burden of reviewing all the prior litigation documents itself.
19 II. ARGUMENT
20 A. Tessera's Document Requests Are Narrowly Tailored And Not Burdensome
21 Each of Tessera's document requests at issue is narrowly tailored, clear and not
22 burdensome. Tessera's first request for documents Hynix produced in specific previous litigations
23 is not burdensome at all. Hynix could simply copy the documents it has stored on electronic
24 databases onto hard drives or DVD-ROMS and provide those hard drives or DVD-ROMs to
25 Tessera. Tessera's second request for documents relating to Tessera and Tessera technology has
26 been narrowed through meet and confer sessions to include only communications with third
27 parties. Further, Hynix, a licensee of Tessera's technology, should understand the term, "Tessera
28 technology." Finally, Tessera's third request for presentations and communications relating to
IRELL & MANELLA LLP
A Registered Limited Liability 1458458 _ 9 - TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
Law Partnership Including TO COMPEL PRODUCTION OF DOCUMENTS
1 packaging used in DRAM goes to the heart of Tessera's claims that defendants and other DRAM
2 manufacturers attempted to boycott Tessera and its technology in order to destroy Tessera's ability
3 to act as a licensor to manufacturers of synchronous DRAM chips.
4 1. Hynix Faces No Burden in Responding to the First Request
5 There is no burden on Hynix to provide to Tessera documents previously produced in other
6 legal proceedings. Hynix stores these documents in electronic databases, and has already
7 produced them in previous actions. (See generally Mot. Ex. 7.) To comply with the subpoena,
8 Hynix simply needed to copy these databases to DVD-ROMs or hard drives and send them to
9 Tessera. Instead, Hynix took upon itself a far more burdensome process. It unilaterally elected to
10 search for only those documents containing certain terms of its own choosing, apparently re-
11 reviewed the documents before producing them, and now seeks to make Tessera pay for a process
12 to which Tessera never agreed. (Slenkovich Decl. at ^flO & Ex. F.)
13 Even Hynix's justification for rejecting the terms Tessera proposed is senseless. For
14 instance, it claims that terms like the defendants' names, Micron and Infineon, would have
15 resulted in the production of documents "having nothing to do with ... the issues involved in
16 Tessera's actions."1 (Opp. at 3.) Hynix cannot avoid discovery by claiming a burden it has placed
17 on itself, particularly when the sole aim of Hynix's efforts appears to have been to improperly
18 limit the production to Tessera. Hynix does not get to pick and choose what it will produce in
19 response to a valid subpoena.
20 All documents Hynix produced in previous antitrust-related proceedings are relevant - not
21 just a subset of Hynix's choosing. Tessera's complaint cites directly from the publicly released
22 documents from the FTC investigation. The documents produced in the DOJ investigation are
23 also relevant. Hynix asserts that these documents are not relevant because its plea agreement
24 excluded RDRAM. (Opp. at 4.) Regardless of the specifics of Hynix's plea, however, the DOJ's
25
26 Further, Hynix makes much of the fact that Tessera has not taken its Motion off calendar, even
though Hynix has not produced documents according the original compromise Tessera offered
27 (see Ex. 6), and further refused to run additional searches in order to potentially remedy the fact
that Hynix cannot electronically search documents produced in the FTC investigation. (Mot. Ex. 7
28 at 2; Stockinger Decl. at |3.)
1RELL & MANELLA LLP
A Registered Limited Liability 1458458 -3- TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
1 price-fixing investigation did not exclude RDRAM, and includes the same conspirators involved
2 in the conspiracy against Tessera over the same time frame.
3 And, Tessera's request for documents produced in previous legal actions is appropriately
4 limited to relevant proceedings. (See Opp. at 6.) Tessera only requests documents from "antitrust-
5 related" legal proceedings. The request goes on to specifically list cases of which Tessera is aware
6 relating to Hynix's anticompetitive conduct - the FTC investigation entitled In re Rambus
7 Incorporated, the DOJ investigation of Hynix's anticompetitive conduct in the DRAM industry,
8 and the state and federal class actions spawned by the DOJ investigation. Hynix has not revealed
9 additional cases in which it is involved, and Tessera has not sought, during the meet and confer
10 process, documents from any other litigations. Moreover, contrary to Hynix's assertion, Tessera
11 explained to Hynix that it is only seeking documents produced by Hynix itself m previous legal
12 proceedings. (See Opp. at 5-6; Stockinger Decl. at ^2; Mot. Ex. 9.)
13 2. Hynix Understands the Clear Terms in the Second Request
14 The second of Tessera's requests, which simply asks for documents concerning Tessera
15 and Tessera technology, is clear. Hynix baselessly objects, claiming it cannot understand the term
16 "Tessera technology." (Opp. at 6-7.) As Hynix is well-aware, however, Tessera's technology is
17 commonly known by its trademark, uBGA or microBGA. Hynix has licensed Tessera technology
18 and presumably knows in detail what it licensed. In fact, pursuant to that license, several of
19 Hynix's employees were trained in implementing that technology and received confidential
20 information relating to it. Moreover, through the meet and confer process, Tessera further clarified
21 the meaning of Tessera technology by providing Hynix's counsel with a list of terms it could use
22 to search for documents responsive to this request. (Mot. Ex. 6.)
23 hi addition, Hynix has sought to narrow the request to eliminate responsive documents if
24 those documents were not produced by Hynix in other antitrust litigations. The request is not so
25 limited. Contrary to its representation in its opposition that Hynix offered to produce documents
26 concerning Tessera (Opp. at 7), Hynix has never agreed to produce any documents outside of
27 those already produced in previous legal proceedings. Even if documents responsive to Tessera's
28
IRELL & MANELLA LLP
A Registered Limited Liability 1458458 -4- TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
1 second request were not produced to the FTC or DOJ, they are relevant to the lawsuit and should
2 be produced.
3 3. Tessera's Third Request Is Narrowly Tailored and Proper
4 Tessera's third request seeks Hynix presentations and communications relating to
5 packaging technology used in DRAM. Such a request is relevant and appropriately limited.
6 Hynix's assertion otherwise is baseless. (See Opp. at 7.)
7 First, the request does limit the type of documents sought to communications and
8 presentations, thereby excluding, for example, internal technical and engineering documents
9 regarding packaging technology. Further, the request limits the subject matter of these documents
10 to packaging technology used in DRAM, as opposed to that used in other kinds of computer chips
11 like FLASH chips or microprocessors.
12 These limitations are narrowly tailored to specifically address the issues central to
13 Tessera's claims. Tessera alleges that Micron and Infineon conspired with other DRAM
14 manufacturers, like Hynix, to boycott Tessera's packaging technology. (See, e.g., Mot. Ex. 16 at ][
15 4.) Communications and presentations relating to the packaging technology Hynix considered for
16 use in DRAM chips are likely to contain evidence of Hynix's (and potentially other DRAM
17 manufacturers') packaging plans, their preferences for various packaging technology, and their
18 reasons for using one type of technology over another. In short, these documents go to the central
19 issue in this case: whether DRAM manufacturers had legitimate or anticompetitive reasons for not
20 choosing Tessera technology.
21 B. Hynix Must Produce HSI Documents In Its Control
22 Contrary to Hynix's assertion (Mot. at 8), Tessera need not show that "Hynix has control
23 over HSI," Hynix's Korean Parent, in order for this Court to find that Hynix has control over the
24 documents in HSI's possession. GerlingInt'lInsur. Co. v. IRS, 839 F.2d 131, 141 (3rd Cir. 1988)
25 ("[w]here the relationship is such that the agent-subsidiary can secure documents of the principal-
26 parent to meet its own business needs ..., the courts will not permit the agent subsidiary to deny
27 control for purposes of discovery.") (See Mot. at 11-13.)
28
1RELL & MANELLA LLP
A Registered Limited Liability 1458458 -5-
TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
1 There is no serious dispute that Hynix has control over the requested HSI documents -
2 Hynix has admitted as much: "Nevertheless, as a compromise on this issue, we would be willing
3 to produce to Tessera documents originating from HSI which have already been produced,
4 whether in response to discovery or through other agreements, within the litigation referenced in
5 your letter." (Mot. Ex. 7 at 1; see Mot. at 11.)
6 Moreover, Hynix agrees that the case at bar is "most similar" to a case Tessera cited in
7 support of its position, Choice-Intersil Microsystems, Inc. v. Agere Sys., Inc., 224 F.R.D. 471
8 (N.D. Cal. 2004). (Opp. at 8; see Mot. at 8.) Hynix concedes that the Court in Choice-Intersil
9 "found that the subsidiary had the ability to obtain a limited amount of documents relating to the
10 marketing and technical development of a specific product and ordered that limited production."
11 (Opp. at 8.) Hynix ignores the broader holding in that case, however.
12 The Court in that case found that Infineon NA, a wholly-owned subsidiary of Infineon AG,
13 a German corporation, was able to obtain, upon demand, high-level marketing documents from
14 and shared document databases with Infineon AG. Choice-Intersil, 224 F.R.D. at 472-73. Based
15 on this finding, the Court held that, because Infineon NA had control over one type of document
16 relating to a specific product, it also had control over other types of documents relating to that
17 product.
18 [SJince Infineon NA had the apparent ability to obtain high level documents relating
to the marketing of the product, it could also obtain documents relating to the
19 technical development of the product if it chose to request them from Infineon AG.
20 Id.
21 This holding governs here. HSI owns 96.7 percent of HSA. Hynix's website confirms that
22 HSA provides "sales, marketing and distribution" of Hynix's semiconductor products, including
23 DRAM, and is further involved in research and development of these products - including,
24 significantly, packaging technology. (Mot. at 12.) HSA therefore must be able to obtain
25 documents on these subjects from Hynix upon demand. Tessera requests documents relating
26 directly to these issues - DRAM and packaging technology. Since HSA has control of these HSI
27 documents for business purposes, it should not be permitted to deny that control for discovery
28 purposes.
IRELL & MANELLA LLP
1458458 _ 6 _ TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
1 C. This Court Should Deny Hynix's Request For Unnecessarily Incurred Fees
2 And Costs
3 Hynix has no basis for seeking $70,000 in fees and costs from Tessera. In purported
4 support for reimbursement, Hynix cites to a single case for the proposition that a nonparty "should
5 not be forced to subsidize an unreasonable share of the costs of litigation to which they are not a
6 party." United States v. Columbia Broadcasting Sys., Inc., 666 F.2d 364, 371 (9th Cir. 1982).
7 Tessera did not require Hynix to incur $70,000 in fees and costs. Hynix apparently instructed its
8 counsel to re-read documents that already had been produced in prior actions before producing
9 them to Tessera. That was Hynix's choice. Tessera should not have to pay for this choice - it was
10 unnecessary for Hynix to do so to comply with the subpoena. Any "unreasonable" costs borne by
11 Hynix were the direct result of its converting a simple task into a burdensome one.
12 Tessera requested production of all documents that Hynix previously produced in three
13 specific antitrust-related proceedings. Hynix admittedly keeps these documents in electronic
14 databases. (See Mot. Ex. 7.) It could have simply copied these databases onto DVD-ROMs or
15 hard drives and produced them, thereby fully complying with the first document request. Instead,
16 in order to avoid full compliance, Hynix sought to limit the production through electronic searches
17 for documents containing certain terms - terms to which Tessera never agreed. (Mot. Ex. 7 & 8;
18 Slenkovich Decl., Ex. F.) It then re-reviewed documents that had previously been produced in
19 other matters and that presumably had already been reviewed for privilege and confidentiality
20 issues. (Slenkovich Decl. at ^| 10.) Hynix unilaterally converted a simple re-production into a
21 massive endeavor - and now it unreasonably wants Tessera to pay for it. See Zubulake v. UBS
22 Warburg LLC, 217 F.R.D. 309, 317 (S.D.N.Y. 2003) ("The Supreme Court has instructed that the
23 presumption is that the responding party must bear the expense of complying with discovery
24 requests. Any principled approach to electronic evidence must respect this presumption." (internal
25 quotation and alteration omitted)).
26 Moreover, judging from Hynix's counsel's explanation that Hynix incurred "costs of over
27 $70,000 in fees related to this effort" (Slenkovich Decl. at T}10), it appears Hynix is really seeking
28 reimbursement for attorneys' fees. Yet, the District Court on remand from the very case Hynix
IRELL & MANELLA LLP
1458458 _7 . TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
1 cites in alleged support of its position clearly held: "The Nonparty Witnesses will not be allowed
2 to recover the costs incurred in retaining outside counsel. The 'American Rule' on attorneys' fees
3 is that each party must bear the burden of his own attorneys' fees." United States v. CBS, Inc.,
4 103 F.R.D. 365, 374 (C.D. Cal. 1984). Tessera will agree to pay the cost of copying the electronic
5 documents onto DVD-ROMs produced to Tessera. That is the only cost Tessera should be
6 required to bear.
7 III. CONCLUSION
8 This Court should grant Tessera's motion to compel and deny Hynix's request for
9 reimbursement.
10
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12
13 Respectfully submitted,
14 Dated: March 7, 2006 IRELL & MANELLA LLP
15
16 By:
EHip€n S. Turner
17
/ ^Attorneys for Plaintiff
18 Tessera, Inc.
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IRELL & MANELLA LLP
1458458 -8- TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION
Law Partnership including TO COMPEL PRODUCTION OF DOCUMENTS
PROOF OF SERVICE
I am employed in the County of Los Angeles, State of California. I am over the age of 18
and not a party to the within action. My business address is 1800 Avenue of the Stars, Suite 900,
Los Angeles, California 90067-4276.
On March 7, 2006,1 served the foregoing document described as:
TESSERA INC.'S REPLY IN SUPPORT OF ITS MOTION TO COMPEL
PRODUCTION OF DOCUMENTS PURSUANT TO SUBPOENA TO HYNIX
SEMICONDUCTOR AMERICA, INC.
DECLARATION OF TREVOR V. STOCKINGER IN SUPPORT OF REPLY IN
SUPPORT OF MOTION TO COMPEL PRODUCTION OF DOCUMENTS
PURSUANT TO SUBPOENA TO HYNIX SEMICONDUCTOR AMERICA, INC.
on each interested party, as follows:
10 Keith Slenkovich Alexis Gorton
Thelen Reid & Priest LLP Kirkland & Ellis LLP
11 225 West Santa Clara Street, Suite 1200 153 East 53rd Street
San Jose, CA 95113 New York, NY 10022-4611
12 kslenkovich@thelanreid.com agorton@kirkland.com
13 Arthur P. Licygiewicz
Jones Day
14 North Point
901 Lakeside Avenue
15 Cleveland, OH 44114
aplicygiewicz@jonesday.com
16 "
17 (BY OVERNIGHT DELIVERY SERVICE) I served the foregoing document
by FedEx, an express service carrier which provides overnight delivery, as
18 follows. I placed a true copy of the foregoing document in sealed envelopes or
packages designated by the express service carrier, addressed, as set forth above,
19 with fees for overnight delivery paid or provided for.
20 (BOX DEPOSIT) I deposited such envelopes or packages in a
box or other facility regularly maintained by the express service
21 carrier.
22 (BY ELECTRONIC MAIL) I caused the foregoing document to be served
electronically by electronically mailing a true and correct copy through Irell &
23 Manella LLP's electronic mail system to the e-mail address(es), as set forth
„
above, and the transmission was reported as complete and no error was reported.
24
Executed on March 7, 2006, at Los Angeles, California.
25
I declare under penalty of perjury that the foregoing js true and correct.
26
Lisa M. Siegel (lsiegel@irell.com)
(Type or print name)
28
1460619

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Case 5:06-mc-80024-JW Document 9 Filed 03/07/2006 Page 1 of 10

1 IRELL & MANELLA LLP

11 TESSERA, INC., ) Case No. CV 06-80024-MISC-JW (PVT)

1 Declaration in Support of Reply In Support of Tessera's Motion to Compel ("Stockinger Decl.") at

25 quotation and alteration omitted)).

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