Case 3:14-cv-00757-REP-DJN Document 105 Filed 04/24/15 Page 1 of 19 PageID# 15400
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`RICHMOND DIVISION
`
`
`CIVIL ACTION NO. 3:14-CV-00757-REP
`
`
`
`
`JURY TRIAL DEMANDED
`
`SAMSUNG ELECTRONICS CO., LTD., and
`SAMSUNG ELECTRONICS AMERICA,
`INC.,
`
`
`
`v.
`
`NVIDIA CORPORATION, OLD MICRO,
`INC. F/K/A VELOCITY MICRO, INC. AND
`VELOCITY HOLDINGS, LLC
`
`
`
`
`
`Plaintiffs,
`
`Defendants.
`
`MEMORANDUM IN SUPPORT OF SAMSUNG’S MOTION
`TO SEVER NVIDIA’S PATENT INFRINGEMENT COUNTERCLAIMS
`
`
`
`

`

`Case 3:14-cv-00757-REP-DJN Document 105 Filed 04/24/15 Page 2 of 19 PageID# 15401
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`TABLE OF CONTENTS
`
`Page
`INTRODUCTION .............................................................................................................. 1
`STATEMENT OF FACTS ................................................................................................. 2
`A.
`Procedural History .................................................................................................. 2
`B.
`Samsung’s Patents and NVIDIA’s Counterclaim Patents ...................................... 4
`ARGUMENT ...................................................................................................................... 6
`A.
`NVIDIA’s Asserted Patents Are Peripheral to the Original Action ....................... 7
`1.
`NVIDIA’s Counterclaims Assert Infringement of Four Patents
`That Are Completely Different from the Eight Patents Asserted by
`Samsung ...................................................................................................... 7
`Adjudicating the NVIDIA Counterclaim Patents with the Samsung
`Patents Will Not Provide Any Efficiencies to the Court or the
`Parties .......................................................................................................... 8
`Joinder Would Prejudice Samsung, Delay Adjudication of the Unrelated
`Claims, and Fail to Serve the Interests of Justice ................................................. 10
`1.
`Adding NVIDIA’s Patent Counterclaims Would Be Impossible
`Under the Current Schedule ...................................................................... 10
`NVIDIA Does Not Offer a Reasonable Justification for Its Delay
`in Bringing Its Counterclaims ................................................................... 12
`CONCLUSION ................................................................................................................. 14
`
`2.
`
`2.
`
`I.
`II.
`
`III.
`
`IV.
`
`
`B.
`
`
`
`i
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`

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`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`17th St. Assocs., LLP v. Markel Int’l Ins. Co.,
`373 F. Supp. 2d 584 (E.D. Va. 2005) ....................................................................................... 6
`Carbon Fuel Co. v. USX Corp.,
`867 F. Supp. 414 (S.D.W. Va. 1994) ........................................................................................ 6
`Chaudhry v. Gallerizzo,
`174 F.3d 394 (4th Cir. 1999) .................................................................................................. 14
`CVI/Beta Ventures, Inc. v. Custom Optical Frames, Inc.,
`896 F. Supp. 505 (D. Md. 1995) ..................................................................................... 6, 9, 10
`Foman v. Davis,
`371 U.S. 178 (1962) ................................................................................................................ 14
`Grigsby v. Kane,
`250 F. Supp. 2d 453 (M.D. Pa. 2003) ....................................................................................... 6
`Koh v. Microtek Int’l, Inc.,
`250 F. Supp. 2d 627 (E.D. Va. 2003) ................................................................................... 6, 9
`Newport News Holdings Corp. v. Virtual City Vision, Inc.,
`650 F.3d 423 (4th Cir. 2011) .................................................................................................. 14
`Roy-G-Biv v. Fanuc,
`Case No. 2:07-CV-418 (E.D. Tex. Apr. 14, 2009) ................................................................. 14
`Spencer, White & Prentis, Inc. v. Pfizer, Inc.,
`498 F.2d 358 (2d Cir.1974)....................................................................................................... 6
`Verizon Md. Inc. v. RCN Telecom Servs., Inc.,
`232 F. Supp. 2d 539 (D. Md. 2002), aff’d in part & dismissed in part sub nom.
`Verizon Md., Inc. v. Global NAPS, Inc., 377 F.3d 355 (4th Cir. 2004) .................................... 6
`
`RULES
`Fed. R. Civ. P. 21 ............................................................................................................................ 6
`
`
`
`
`
`ii
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`

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`Plaintiffs Samsung Electronics Company, Ltd. (“SEC”) and Samsung Electronics
`
`America, Inc. (“SEA”) (collectively, “Samsung”) move the Court to sever the counterclaims
`
`asserting patent infringement filed by Defendant NVIDIA Corporation (“NVIDIA”).
`
`I.
`
`INTRODUCTION
`
`Samsung filed this action in November 2014. NVIDIA’s literally eleventh-hour
`
`counterclaims are a transparent attempt to manipulate the schedule in this case. NVIDIA waited
`
`over a year after alleging that Samsung infringed the patents before bringing these patent
`
`infringement claims in any court. During that year, NVIDIA even filed three separate answers in
`
`this case. Then, it included counterclaims for the first time in its third amended Answer filed the
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`night before the April 15, 2015 pretrial conference. Now that the Court has set the case for trial,
`
`NVIDIA seeks to complicate it and confuse the jury by inserting its unrelated patents into the
`
`scheduled trial on Samsung’s claims. Apparently assuming that this motion to sever will be
`
`denied, NVIDIA has already publicly boasted that the January 11, 2016 trial in this action “will
`
`focus on Samsung’s asserted six patents against NVIDIA, and two patents against our customer
`
`Velocity Micro, as well as on our four patents asserted against Samsung.” (Ex. 1,1
`
`http://blogs.nvidia.com/blog/2015/04/16/update-patent-samsung (emphasis added).)
`
`The Court should exercise its discretion under Rule 21 to sever NVIDIA’s patent
`
`counterclaims. NVIDIA’s counterclaims are based on different patents, in a different technical
`
`area, and implicate different products and different issues of validity and infringement. In
`
`addressing NVIDIA’s 47 asserted patent claims that are allegedly infringed by 284 different
`
`Samsung products, the Court will be presented with different claim construction issues, different
`
`prior art, different damages theories, and different documents and witnesses. NVIDIA’s patent
`
`1 All exhibits refer to exhibits to the Declaration of Sarah K. McConaughy in Support of
`Samsung’s Motion to Sever NVIDIA’s Patent Infringement Counterclaims.
`
`
`
`1
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`

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`counterclaims are entirely peripheral to the claims that have been the subject of this case for the
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`past five months. And NVIDIA seeks to impose an abbreviated schedule on the Court and
`
`Samsung that is designed to get to trial in fewer than eight months from filing. Had NVIDIA
`
`been genuinely interested in seeking relief for alleged infringement of the four asserted patents, it
`
`could have brought those claims months ago in this or another case. In the administration of
`
`justice, they should be severed.
`
`II.
`
`STATEMENT OF FACTS
`
`A.
`
`Procedural History
`
`On April 15, 2015, NVIDIA filed its third amended Answer and Counterclaims asserting
`
`for the first time in this case infringement of four patents, U.S. Patent No. 7,339,590 (“’590
`
`Patent”), U.S. Patent No. 7,095,414 (“’414 Patent”), U.S. Patent No. 8,174,531 (“’531 Patent”),
`
`and U.S. Patent No. 6,532,013 (“’013 Patent”) (the “NVIDIA Counterclaim Patents” or
`
`“NVIDIA’s Counterclaim Patents”).
`
`Before filing these counterclaims, NVIDIA appeared to have abandoned its contention
`
`that Samsung infringed valid claims of these four patents. NVIDIA admits it notified Samsung
`
`about the NVIDIA Counterclaim Patents on January 6, 2014 (the ʼ590, ’414, and ’531 Patents)
`
`and March 8, 2014 (the ʼ013 Patent). (Dkt. No. 84 at 4.) Indeed, NVIDIA gave formal
`
`presentations to Samsung during which NVIDIA disclosed its infringement theories for more
`
`than 40 patents, including the NVIDIA Counterclaim Patents. Samsung provided responses
`
`regarding NVIDIA’s presentations, and NVIDIA appeared to abandon its claims. (Id.) For more
`
`than a year NVIDIA gave no sign that it continued to believe Samsung infringed valid claims of
`
`the NVIDIA Counterclaim Patents despite asserting several other patents against Samsung in
`
`other proceedings.
`
`2
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`

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`On September 4, 2014, NVIDIA filed its first suit against Samsung and Qualcomm in the
`
`District of Delaware, alleging infringement of seven patents, but it did not assert any of the
`
`NVIDIA Counterclaim Patents. NVIDIA contemporaneously filed a complaint in the ITC
`
`alleging infringement of the same seven patents (“NVIDIA ITC Investigation”) and again did not
`
`include any of the NVIDIA Counterclaim Patents. The NVIDIA ITC Investigation, which
`
`originally involved 135 disputed patent claims, was filed two months before Samsung’s
`
`Complaint in this action, but the ALJ has already completed claim construction. The Hearing in
`
`the NVIDIA ITC Investigation is scheduled to commence on June 22, 2015. (Ex. 2, ITC Inv.
`
`No. 337-TA-932, Order No. 18 at 2.)
`
`On November 4, 2014, Samsung filed this action asserting infringement of eight patents
`
`(the “Samsung Patents”) against NVIDIA as well as Old Micro, Inc. f/k/a Velocity Micro, Inc.
`
`and Velocity Holdings, LLC (collectively, “Velocity Micro”). Samsung also asserted Virginia
`
`false advertising claims against NVIDIA.
`
`Since Samsung’s initial Complaint, NVIDIA has engaged in a concerted effort to delay
`
`this action, but until last week it never indicated it intended to assert the NVIDIA Counterclaim
`
`Patents. NVIDIA moved three times to extend its time to answer. (Dkt. Nos. 21, 33, 76.) On
`
`January 15, 2015, NVIDIA moved to sever the claims against NVIDIA and transfer the case to
`
`the Northern District of California. The Court denied Defendants’ motion to transfer on April 3,
`
`2015. (Dkt. Nos. 46, 75.)
`
`During the several weeks after it moved to transfer, NVIDIA filed no fewer than three
`
`answers. NVIDIA first filed its Answer on January 26, 2015, and it did not assert the NVIDIA
`
`Counterclaim Patents. On February 27, 2015, after Samsung identified deficiencies in
`
`NVIDIA’s first Answer, NVIDIA sought the Court’s leave to file an amended answer. The
`
`3
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`

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`Court granted NVIDIA’s motion for leave, and NVIDIA filed its First Amended Answer on
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`March 3, 2015, and again it did not assert the NVIDIA Counterclaim Patents. On March 27,
`
`2015, after Samsung identified additional deficiencies, NVIDIA filed another motion for leave to
`
`file an amended answer. On March 31, 2015, the Court granted Defendants’ motion, and
`
`Defendants filed their Second Amended Answer to Samsung’s Amended Complaint.
`
`In an obvious attempt to disrupt the pretrial schedule, NVIDIA first filed its
`
`counterclaims on the eve of the initial pretrial conference. By that time, NVIDIA and Samsung
`
`had already exchanged proposed pretrial schedules, and NVIDIA was aware that Samsung was
`
`seeking a November 2015 trial date. (Dkt. No. 82.) Although NVIDIA claims it delayed the
`
`filing of its counterclaims “in part because of its pending motion to transfer,” (Dkt. No. 84 at 4)
`
`NVIDIA publicly characterized the Court’s decision on the motion to transfer as a “small
`
`development” that “has no bearing on the substance of Samsung’s case or Samsung’s asserted
`
`patents.” (Ex. 3, http://blogs.nvidia.com/blog/2015/04/06/itc-favorable-ruling.)
`
`NVIDIA’s patent infringement counterclaims assert 47 claims and accuse 284 Samsung
`
`products. But NVIDIA’s patent infringement claims are still in flux. NVIDIA’s Initial
`
`Infringement Contentions and First Asserted Claim Selection (served April 21, 2015) asserts new
`
`patent claims that were not identified in NVIDIA’s counterclaims. NVIDIA ignored the Court’s
`
`instruction at the April 15, 2015 pretrial conference that all asserted claims should be identified
`
`in the pleadings and that any additions would require an amendment to the pleadings.
`
`B.
`
`Samsung’s Patents and NVIDIA’s Counterclaim Patents
`
`Samsung’s asserted patents may be divided into three general categories related to
`
`microprocessor design, microprocessor fabrication, and features of consumer electronic devices:
`
`4
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`

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`1)
`
`Microprocessor Design Patents (ʼ158, ʼ938, and ʼ602 Patents): NVIDIA
`
`processors and GPUs infringe these patents, as do Velocity computer systems that
`
`incorporate those processors and GPUs.
`
`2)
`
`Microprocessor Fabrication Patents (ʼ902 and ʼ675 Patents): NVIDIA processors
`
`and GPUs made using Samsung’s patented processes infringe these patents.
`
`Velocity computers that incorporate those processors and GPUs also infringe
`
`these patents.
`
`3)
`
`Features of Consumer Electronic Devices Patents: This category includes the
`
`Display Adapter Computer System Patent (ʼ724 Patent), the Booting System
`
`Patent asserted against certain Velocity computers (ʼ054 Patent), and the
`
`Computer Case Patent also asserted against certain Velocity computers
`
`(ʼ854 Patent).
`
`None of the four NVIDIA Counterclaim Patents relate to any of these three fields of
`
`technology. Instead, they all relate to rendering three-dimensional graphic images onto a flat
`
`(two-dimensional) computer screen. The rendering process takes information about the objects
`
`to be displayed and generates a two-dimensional image from a specified viewpoint. This process
`
`is roughly analogous to creating a two-dimensional photograph of a three-dimensional, real-
`
`world scene. The NVIDIA Counterclaim Patents each disclose methods for processing the
`
`graphics data to create images, for example, using textures, blending, and shading. Each of
`
`NVIDIA’s Counterclaim Patents is directed toward improving graphics processing, for example,
`
`by creating more realistic images by improving the speed, quality, or power usage of the
`
`computer graphics functions on a GPU. NVIDIA’s counterclaims accuse GPUs in 284 Samsung
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`5
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`

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`mobile phones, laptop computers, and televisions. None of these products overlap with the
`
`NVIDIA products accused of infringing the asserted Samsung patents.
`
`On April 14, 2015, hours before NVIDIA filed its counterclaims, it served discovery
`
`related to NVIDIA’s Counterclaim Patents. NVIDIA served 63 requests for production
`
`(Nos. 48-110) and four interrogatories (Nos. 3-6). (Ex. 4, NVIDIA’s Second Set of Requests for
`
`Production of Documents and Things to Samsung; Ex. 5, NVIDIA’s Second Set of
`
`Interrogatories to Samsung.)
`
`III. ARGUMENT
`
`Under Federal Rule of Civil Procedure 21, a court may sever “[a]ny claim against a
`
`party.” A “court has virtually unfettered discretion in determining whether or not severance is
`
`appropriate.” 17th St. Assocs., LLP v. Markel Int’l Ins. Co., 373 F. Supp. 2d 584, 598 (E.D. Va.
`
`2005) (emphasis added) (citing Grigsby v. Kane, 250 F. Supp. 2d 453, 456 (M.D. Pa. 2003);
`
`accord Carbon Fuel Co. v. USX Corp., 867 F. Supp. 414, 419 (S.D.W. Va. 1994)).
`
`Severance is particularly appropriate if the claims to be severed are “peripheral” and
`
`severance would advance “the administration of justice.” Koh v. Microtek Int’l, Inc., 250 F.
`
`Supp. 2d 627, 632 (E.D. Va. 2003). Severance is also appropriate when a counterclaim is based
`
`on an entirely different factual situation from that which supports the plaintiff’s claim. CVI/Beta
`
`Ventures, Inc. v. Custom Optical Frames, Inc., 896 F. Supp. 505, 506 (D. Md. 1995) (citing
`
`Spencer, White & Prentis, Inc. v. Pfizer, Inc., 498 F.2d 358, 362 (2d Cir.1974)). When
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`determining whether to sever under Rule 21, “principles of fundamental fairness and judicial
`
`efficiency are the twin lodestars.” Verizon Md. Inc. v. RCN Telecom Servs., Inc., 232 F. Supp.
`
`2d 539, 547 (D. Md. 2002), aff’d in part & dismissed in part sub nom. Verizon Md., Inc. v.
`
`Global NAPS, Inc., 377 F.3d 355 (4th Cir. 2004).
`
`6
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`

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`Here, NVIDIA’s counterclaims are entirely peripheral to Samsung’s claims—NVIDIA’s
`
`counterclaims are based on different patents in a different technology area, and they implicate
`
`different products and different issues of validity, infringement, and damages. The Court should
`
`exercise its discretion to sever those counterclaims because severance will serve the ends of
`
`justice and further the prompt and efficient disposition of both actions.
`
`A.
`
`NVIDIA’s Asserted Patents Are Peripheral to the Original Action
`
`1.
`
`NVIDIA’s Counterclaims Assert Infringement of Four Patents That
`Are Completely Different from the Eight Patents Asserted by
`Samsung
`
`The eight Samsung Patents relate to specific microprocessor technologies and features of
`
`consumer electronic devices. Three of Samsung’s Patents relate to microprocessor circuit design
`
`(’158, ’938, ’602 Patents); two patents relate to processes for manufacturing microprocessors
`
`(’902 and ’675 Patents); one relates to the display adapter for an external monitor (ʼ724 Patent);
`
`one relates to start-up procedures for a hard drive (ʼ054 Patent); and one relates to the design of a
`
`computer case (ʼ854 Patent). Although Samsung’s Patents are not in a single technology area,
`
`none of the Samsung Patents cover computer graphics processing.
`
`The four NVIDIA Counterclaim Patents all relate to processing and displaying graphical
`
`images. In particular, the patents facilitate rendering computer images—that is, generating a
`
`two-dimensional image that simulates the appearance of a three-dimensional object, similar to
`
`taking a photograph of a real-world scene. The NVIDIA Counterclaim Patents each disclose
`
`computing technologies for generating those images faster, using less memory, and creating
`
`more realistic images. None of the four NVIDIA Counterclaim Patents relate to even the general
`
`area of any of the eight Samsung Patents.
`
`Naturally, the Samsung Patents and NVIDIA Counterclaim Patents are asserted against
`
`different products. The Samsung Patents are infringed by NVIDIA GPUs, NVIDIA graphics
`
`7
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`

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`cards, NVIDIA mobile devices, NVIDIA SoCs, and Velocity computers. NVIDIA alleges that
`
`NVIDIA’s Counterclaim Patents are infringed by the GPUs in 284 separate Samsung devices—
`
`including mobile phones, laptop computers, and televisions. Adding NVIDIA’s Counterclaim
`
`Patents to this case would require Samsung to produce information about 284 products that
`
`would otherwise not be accused of infringement in this action.
`
`2.
`
`Adjudicating the NVIDIA Counterclaim Patents with the Samsung
`Patents Will Not Provide Any Efficiencies to the Court or the Parties
`
`Because the NVIDIA Counterclaim Patents and the Samsung Patents involve different
`
`technologies, the Court will be required to consider different claim construction issues, different
`
`prior art, different damages theories, and different documents and witnesses to evaluate
`
`NVIDIA’s and Samsung’s respective claims. None of the NVIDIA Counterclaim Patents
`
`contain any of the disputed claim terms associated with the Samsung Patents. It is unlikely that
`
`the Court would apply the same “person of ordinary skill in the art” standard to the NVIDIA
`
`Counterclaim Patents and the Samsung Patents. None of NVIDIA’s Counterclaim Patents cite
`
`any of the prior art references cited in Samsung’s Patents. Validity and infringement issues for
`
`the Samsung Patents and NVIDIA Counterclaim Patents will also require different percipient and
`
`expert witnesses. NVIDIA’s counterclaims implicate completely different damages issues,
`
`which will require analysis of NVIDIA’s licensing practices and NVIDIA’s purported lost
`
`profits—which are not implicated in the original action. And because NVIDIA’s Counterclaim
`
`Patents are directed toward an entirely different technology from Samsung’s Patents, even the
`
`technology background for Samsung’s Patents will be useless when adjudicating NVIDIA’s
`
`Counterclaim Patents. Very little, if any, of the parties’ pretrial preparations for the Samsung
`
`Patents would overlap with the pretrial preparations for the NVIDIA Counterclaim Patents. And
`
`8
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`almost none of the Court’s pretrial rulings related to the Samsung claims will be applicable to
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`NVIDIA’s counterclaims.
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`If the cases are not severed, the Court, and eventually the jury, will have to tackle two
`
`entirely different cases: one involving Samsung’s Patents and a completely disjointed case
`
`involving NVIDIA’s Counterclaim Patents. Just as the Court ruled in Koh v. Microtek Int’l, Inc.,
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`250 F. Supp. 2d 627, 632 (E.D. Va. 2003), NVIDIA’s claims must be severed because they “are
`
`peripheral to the central issues of the action.” The central issues in this action are the
`
`infringement of the Samsung Patents by NVIDIA and Velocity Micro, NVIDIA’s false
`
`advertising, the scope of injunctive relief, and the damages Samsung suffered from these
`
`infringements. NVIDIA’s patent infringement claims involving graphics processing technology
`
`are unrelated to Samsung’s claims. To consider NVIDIA’s Counterclaim Patents, the jury must
`
`learn about a technology (visual computing), evaluate four new patents that are unrelated to
`
`Samsung’s Patents and unrelated to each other, and evaluate the technology in 284 Samsung
`
`devices. Combining the complex, divergent issues raised by the Samsung Patents and the
`
`NVIDIA Counterclaim Patents into a single trial creates a high risk of delaying the pretrial
`
`schedule and creating jury confusion.
`
`In an analogous situation, the court in CVI/Beta Ventures, Inc. v. Custom Optical Frames,
`
`Inc., 896 F. Supp. 505 (D. Md. 1995), severed claims that were similarly disjointed. The court
`
`concluded:
`
`the validity and
`The original action will require determination of (1)
`enforceability of the [plaintiffs’ patents], (2) infringement of the [plaintiffs’
`patents] and (3) damages suffered by the [p]laintiffs. [In contrast,] the resolution
`of the [defendant’s counterclaim] will require (1) determination of the validity
`and enforceability of the [defendant’s patent], (2) the alleged infringement of the
`[defendant’s patent] and (3) damages suffered by defendant.
`
`9
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`Id. at 506. If anything, this action is even more suitable for severance than CVI/Beta Ventures.
`
`Both the plaintiffs’ and defendant’s patents in CVI/Beta involved flexible eyeglass frames made
`
`from nickel titanium alloys. Yet the court still severed the defendant’s counterclaims asserting
`
`different patents. Here, NVIDIA’s Counterclaim Patents and Samsung’s Patents cover
`
`completely separate technologies, thus creating an even greater rationale for severance.
`
`The ancillary nature of NVIDIA’s counterclaims is further reinforced by the fact that
`
`NVIDIA’s counterclaims do not involve Velocity Micro. As the court ruled in CVI/Beta, it
`
`serves the ends of justice to sever a counterclaim if certain “parties in the current litigation have
`
`no interest in the [counterclaim] at all.” Id. at 507. Severance of NVIDIA’s counterclaims will
`
`allow Samsung to adjudicate its claims against NVIDIA and Velocity Micro swiftly, without the
`
`delay caused by NVIDIA’s additional, unrelated claims.
`
`B.
`
`Joinder Would Prejudice Samsung, Delay Adjudication of the Unrelated
`Claims, and Fail to Serve the Interests of Justice
`
`1.
`
`Adding NVIDIA’s Patent Counterclaims Would Be Impossible Under
`the Current Schedule
`
`The Court has adopted a schedule that will lead to the efficient resolution of Samsung's
`
`claims. A technical tutorial hearing is scheduled on June 3, 2015. The Court’s claim
`
`construction hearing is set for June 22, 2015. Trial is set for January 11, 2016. This schedule is
`
`impossible if the Court joins NVIDIA’s patent counterclaims to Samsung’s original cause of
`
`action.
`
`The schedule that NVIDIA proposes does not provide time for Samsung to analyze the
`
`NVIDIA Counterclaim Patents and meet the required pretrial deadlines for the NVIDIA
`
`Counterclaim Patents. NVIDIA’s counterclaims assert 47 claims and accuse 284 Samsung
`
`products ranging from mobile phones, tablets, laptop computers, and televisions. Requiring
`
`Samsung to follow NVIDIA’s proposed schedule would require Samsung to prepare and serve:
`
`10
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`
`•
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`initial disclosures on April 24, 2015 (ten days after service of NVIDIA’s
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`counterclaims) (Dkt. No. 96-3);
`
`• documents sufficient to show the operation of the accused instrumentalities on
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`May 28, 2015 (44 days after service of NVIDIA’s counterclaims) (id.); and
`
`•
`
`invalidity contentions on June 5, 2015 (53 days after service of NVIDIA’s
`
`counterclaims) (id.).
`
`NVIDIA’s already served discovery relating to its counterclaims demonstrates the
`
`unmanageable burden that including NVIDIA’s counterclaims in this action would impose on
`
`Samsung. On April 14, before NVIDIA’s counterclaims were filed or entered, NVIDIA served
`
`63 requests for production (more than doubling the requests served to date) and four
`
`interrogatories. (Exs. 4, 5.) NVIDIA claims that Samsung’s objections to NVIDIA’s requests
`
`should be due on May 13, 2015 and Samsung’s responses are due May 28, 2015, despite Judge
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`Novak’s recent order that the parties “hold a supplemental Rule 26(f) conference regarding
`
`discovery related to Defendants' counterclaims not later than May 1, 2015, with discovery to
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`proceed forward thereafter.” (Dkt. No. 101.) The requests are wide-ranging. NVIDIA, for
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`example, demands that Samsung produce for each of the 284 accused products:
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`• “all documents related to design, research, development, operation,
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`implementation, and use of any Accused Samsung Product or any SoC or GPU
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`contained within an Accused Samsung Product.” (Ex. 4, RFP No. 48.)
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`• “All Source Code, specifications, schematics, circuit diagrams, flow charts,
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`artwork, formulas, or other Documents that show the operation, use and
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`implementation” and “all Documents relating to the development or use of [such]
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`Source Code.” (Ex. 4, RFP Nos. 52, 58, 64, 68.)
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`•
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` “all documents relating to any tests, experiments, or quality assurance procedures
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`relating to that product.” (Ex. 4, RFP No. 85.)
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`•
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`the “name and model number of the SoC, the manufacturer of the SoC, each
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`entity that directly or indirectly supplies the SoC to Samsung, the name and model
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`number of the GPU in the SoC, and each entity that supplies or licenses the GPU
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`to Samsung.” (Ex. 5, Interrogatory No. 3.)
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`Discovery on NVIDIA’s counterclaims also implicates significant third-party discovery that
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`would not otherwise be implicated in this action. NVIDIA accuses Samsung products based
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`only on their use of third-party GPUs from Qualcomm, ARM, and Imagination Technologies.
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`Such third-party discovery is irrelevant to Samsung’s claims and will be difficult to accomplish
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`under NVIDIA’s proposed schedule.
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`Although discovery on NVIDIA’s counterclaims has not begun, both Plaintiffs’ and
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`Defendants’ analysis and discovery related to Samsung’s Patents are well under way. Samsung
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`filed its patent claims on November 4, 2015. The parties conducted their Rule 26(f) conference
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`on April 6, 2015 and served discovery requests on the same day. By the time briefing on this
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`Motion is complete, the parties will already have exchanged initial disclosures, exchanged initial
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`infringement contentions for the Samsung Patents, produced documents sufficient to show the
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`operation of the defendants’ accused instrumentalities, and provided invalidity contentions for
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`Samsung’s Patents. Grafting two sets of claims that are in such different stages of discovery
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`prejudices the parties and the Court and does not serve the interests of justice or efficiency.
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`2.
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`NVIDIA Does Not Offer a Reasonable Justification for Its Delay in
`Bringing Its Counterclaims
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`NVIDIA admits that it first believed Samsung infringed the NVIDIA Counterclaim
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`Patents over a year ago, but it waited until literally the eve of the Court’s initial pretrial
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`conference to file its patent counterclaims against Samsung. NVIDIA apparently presented its
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`infringement beliefs to Samsung in January and March 2014. (Dkt. No. 84 at 4.) But after
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`Samsung responded to NVIDIA’s claims of infringement, NVIDIA appeared to drop those
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`allegations. For more than a year, NVIDIA did not make another overture about the NVIDIA
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`Counterclaim Patents. NVIDIA could have asserted the NVIDIA Counterclaim Patents in this or
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`another court at any time in those intervening 13 months. NVIDIA could have asserted the
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`NVIDIA Counterclaim Patents in the NVIDIA ITC Investigation filed on September 4, 2014.
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`NVIDIA could have asserted the NVIDIA Counterclaim Patents in its first Answer filed on
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`January 26, 2015. (Dkt. No. 50.) NVIDIA could have asserted the NVIDIA Counterclaim
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`Patents in its second Answer filed on March 3, 2015. (Dkt. No. 59.) Or NVIDIA could have
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`asserted the NVIDIA Counterclaim Patents in its third Answer filed on March 31, 2015. Instead,
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`NVIDIA held its counterclaims and sprang them at the moment they were most likely to disrupt
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`the schedule in this case.
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`NVIDIA’s revelation that it waited until this Court decided the motion to transfer
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`confirms that NVIDIA’s goal was delay. First, notwithstanding the motion to transfer, NVIDIA
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`could have brought the patent infringement claims in another district—including a district court
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`that NVIDIA found more convenient. Second, NVIDIA has engaged in other pretrial activities
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`while the Court’s transfer decision was pending, including substantively amending its Answer
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`and identifying prior art for Samsung’s Patents. NVIDIA never mentioned the Counterclaim
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`Patents until immediately before it filed its third amended Answer and Counterclaims. The
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`motion to transfer thus did not prevent NVIDIA from moving forward when it suited NVIDIA’s
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`purposes.
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`The delay NVIDIA hopes to create will benefit NVIDIA at the Court’s and Samsung’s
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`expense. For good reason, this type of maneuvering is discouraged, and courts routinely refuse
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`to accept amended pleadings where a party appears to engage in “undue delay, bad faith or
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`dilatory motive.” Foman v. Davis, 371 U.S. 178, 182 (1962); See also Newport News Holdings
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`Corp. v. Virtual City Vision, Inc., 650 F.3d 423, 441 (4th Cir. 2011); Chaudhry v. Gallerizzo, 174
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`F.3d 394, 404 (4th Cir. 1999).
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`Moreover, at least one court has held that a defendant’s unjustified delay in bringing
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`counterclaims counsels in favor of severance. See Roy-G-Biv v. Fanuc, Case No. 2:07-CV-418
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`(E.D. Tex. Apr. 14, 2009), attached as Ex. 6. The court in Roy-G-Biv was particularly persuaded
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`because, as here, the original and counterclaim patents were directed to significantly different
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`technology, and severance would simplify an already complex matter, avoid prejudice to
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`plaintiffs, and promote judicial economy. Id.
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`IV. CONCLUSION
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`NVIDIA admits that it has been aware of Samsung’s alleged infrin