Case 5:15-cv-01277-BLF Document 120 Filed 03/30/16 Page 1 of 5
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`Case No. 15-cv-01277-BLF
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`ORDER SUA SPONTE SEVERING
`DEFENDANT AND THIRD-PARTY
`PLAINTIFF DANIEL L. FLAMM’S
`CLAIMS AGAINST THIRD-PARTY
`DEFENDANTS
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`LAM RESEARCH CORPORATION,
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`Plaintiff,
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`v.
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`DANIEL L. FLAMM, et al.,
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`Defendants.
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`This declaratory judgment action seeking non-infringement of U.S. Patent Nos. 5,711,849,
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`6,017,221, and RE 40,264 started as an action between a seller of tools used to manufacture
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`semiconductors and a patent owner. It has since grown to include third-party claims against four
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`of the manufacturer’s customers, and generated two amended complaints, two answers, one
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`amended third-party complaints, four answers to the amended third-party complaint, each with
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`counterclaims, and four answers to the counterclaims. In light of the complexity of this case,
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`severing the claims against the manufacturer’s customers will serve the ends of justice and further
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`the prompt and efficient disposition of this litigation. Accordingly, for the reasons stated at the
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`case management conference on March 24, 2016 and herein, the Court SEVERS Third-Party
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`Plaintiff Dr. Flamm’s claims against each of the Third-Party Defendants.
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`I. BACKGROUND
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`Dr. Daniel Flamm is the owner and inventor of U.S. Patent Nos. 5,711,849, 6,017,221, and
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-01277-BLF Document 120 Filed 03/30/16 Page 2 of 5
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`RE 40,264, which claim methods used in manufacturing semiconductors. Exhs. A-C to SAC, ECF
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`52-4-52-6. Lam Research Corporation designs, manufactures, and sells semiconductor processing
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`tools that are used to fabricate semiconductors. SAC ¶ 2, ECF 52-8; Ans. to SAC ¶ 2, ECF 66.
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`Around September 2014, Dr. Flamm’s attorneys sent letters to some of Lam’s
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`customers accusing them of infringing the patents-in-suit. SAC ¶¶ 29-30, Ans. to SAC ¶¶ 29-
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`30. Lam, alleging that it may be required to indemnify its customers, SAC ¶ 47, filed this action
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`seeking declaratory judgment of non-infringement by itself and its customers of the patents-in-
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`suit. Dr. Flamm responded by filing a Third-Party Complaint against Lam’s customers
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`GLOBALFOUNDRIES U.S. Inc., Intel Corporation, Maxim Integrated Products, Inc., and Micron
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`Technology, Inc (collectively, “Third-Party Defendants”). Third-Party Complaint, ECF 50-4. Dr.
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`Flamm also filed a complaint in the Western District of Texas against Lam’s customer Samsung
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`Electronics, Co., Ltd. Case No. 1:15-cv-00613 (W.D. Tx.) at ECF 1. Each of the Third-Party
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`Defendants has filed an answer and counterclaim to the Amended Third-Party Complaint seeking
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`a declaration of non-infringement and invalidity. ECF 72, 74, 79, and 84. Dr. Flamm answered
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`each of the counterclaims. ECF 93-96.
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`In the midst of the foregoing, in August 2015, Lam filed five petitions for inter partes
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`review directed to all claims of the ’221 and ’264 patents. The PTAB has instituted IPR on two
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`petitions that are directed at some of the claims of the ’264 patent and instituted IPR on one
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`petition that is directed to five of the seven challenged claims of the ’221 patent. In January 2016,
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`Lam filed four additional IPR petitions that are directed towards the ’849 and ’264 patents.
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`Meanwhile, Dr. Flamm filed a motion to stay this action pending the resolution of the
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`Dr. Flamm’s lawsuit in the Western District of Texas. ECF 51. Lam opposes the stay, Third
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`Party Defendants GLOBALFOUNDRIES and Maxim do not oppose a stay, Micron does not
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`oppose a stay but believes the Western District of Texas action should be stayed pending the IPR
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`proceedings, and Intel does not oppose a stay of the entire case but opposes any partial stay. ECF
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`73, 76, 77, 88. Dr. Flamm also filed a motion to dismiss all but one claim of Lam’s Second
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`Amended Complaint for lack of subject matter jurisdiction. ECF 64.
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`Finally, in the Western District of Texas, Samsung filed a motion to transfer that action to
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`United States District Court
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`Case 5:15-cv-01277-BLF Document 120 Filed 03/30/16 Page 3 of 5
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`this Court. Case No. 1:15-cv-00613 (W.D. Tx.) at ECF 37. Dr. Flamm opposes the motion. Id. at
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`ECF 38, 41. That motion is pending.
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`The parties in this action appeared before the Court on March 24, 2016 for a hearing on
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`Dr. Flamm’s motion to stay and for an initial case management conference. ECF 112, 113. The
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`Court will issue a separate order on Dr. Flamm’s motion to stay.
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`II. DISCUSSION
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`Fed. R. Civ. P. 21 provides that “[o]n motion or on its own, the court may at any time, on
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`just terms, add or drop a party. The court may also sever any claim against a party.” Severed
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`claims and parties become independent actions that have separate judgments. Khanna v. State Bar
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`of Cal., Case No. 07-cv-2587-EMC, 2007 WL 2288116, at *2 (N.D. Cal. Aug. 7, 2007). The
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`Court has broad discretion to sever issues and may do so sua sponte. Id.; see also 7 Charles Alan
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`Wright & Arthur R. Miller, Federal Practice and Procedure § 1689 (3d ed. 2015). In determining
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`whether severance is appropriate, the Court considers factors such as whether there is a
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`complexity of legal theories and factual proof, whether the jury may be confused by the existence
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`of claims, cross-claims, and third party claims in the same trial, and whether severance will “serve
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`the ends of justice and further the prompt and efficient disposition of litigation.” Khanna, 2007
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`WL 2288116, at *2 (quoting CVI/Beta Ventures v. Custom Optical Frames, 896 F. Supp. 505, 505
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`(D. Md. 1995)); see also 4-21 Moore’s Fed. Prac. Civ. § 21.05 (“The trial court thus has great
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`discretion to restructure an action to promote the efficient administration of justice.”).
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`Here, the joinder of Third-Party Defendants GLOBALFOUNDRIES, Intel, Maxim, and
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`Micron will not promote judicial efficiency and will instead, create significant case manageability
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`issues. Each Third-Party Defendant could raise different factual and legal defenses of non-
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`infringement and invalidity creating logistical headaches. Moreover, each Third-Party Defendant
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`could file different motions, including dispositive motions, each raising unique factual and legal
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`issues that will have to be analyzed separately. See, e.g. Hard Drive Productions, Inc. v. Does 1-
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`1-188, 809 F. Supp. 2d 1150, 1164 (N.D. Cal. 2011). The Court would face “scores of mini-trials
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`involving different evidence and testimony.” Id. The Court’s concerns have already come to
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`fruition as the Dr. Flamm’s motion to stay has generated five different filings, advocating four
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`Case 5:15-cv-01277-BLF Document 120 Filed 03/30/16 Page 4 of 5
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`different positions. See ECF 51, 73, 76, 77, 88.
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`Furthermore, there would be significant issues with discovery and at trial. As Dr. Flamm
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`recognizes in his motion to stay, the Third-Party Defendants are competitors “who fiercely
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`safeguard their manufacturing processes from one another and the world.” Mot. to Stay at 5-6,
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`ECF 51. “[I]f this action proceeds with all of them…they will be required to divulge their trade
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`secrets to one another in discovery and trial.” Id. at 6. Allowing this case to proceed in such a
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`manner would violate the “principles of fundamental fairness” and prejudice the Third-Party
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`Defendants. Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir. 2000). While, as Dr.
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`Flamm also recognizes, the Court could reduce the risk that trade secrets would be disclosed to
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`competitors through protective orders and bifurcating this matter for separate trials, Mot. to Stay at
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`6, ECF 51, the Court finds severance would eliminate the risk of disclosing trade secrets while
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`allowing this matter to go forward in an orderly fashion.
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`Accordingly, it is more efficient to have a separate case for each Third-Party Defendant
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`with separate motion hearings and discovery proceedings. Given these considerations, the Court
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`finds that all of the claims against the Third-Party Defendants shall be severed from this
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`proceeding.
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` IV. ORDER
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`For the foregoing reasons, IT IS HEREBY ORDERED that:
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`1. Third-Party Plaintiff Dr. Flamm’s claims against each of the Third-Party Defendants are
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`SEVERED but remain pending in this Court. The clerk of the court SHALL assign to a
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`new case number for each of the following actions:
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`a. Dr. Flamm’s claims against GLOBALFOUNDRIES U.S. Inc.
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`b. Dr. Flamm’s claims against Intel Corporation.
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`c. Dr. Flamm’s claims against Maxim Integrated Products, Inc.
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`d. Dr. Flamm’s claims against Micron Technology, Inc.
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`The Court finds that Third-Party Plaintiff Dr. Flamm’s claims against each Third-Party
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`Defendant are related to this action. Therefore, the new case numbers shall end in “BLF.”
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`2. Dr. Flamm is shall pay the filing fee for each action against GLOBALFOUNDRIES, Intel,
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`Case 5:15-cv-01277-BLF Document 120 Filed 03/30/16 Page 5 of 5
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`Maxim, and Micron.
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`3. Dr. Flamm is ORDERED to file new complaints in the severed cases by April 22, 2016.
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`4. The claims between Lam and Dr. Flamm remain pending in this case.
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`IT IS SO ORDERED.
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`Dated: March 30, 2016
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` ______________________________________
`BETH LABSON FREEMAN
`United States District Judge
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