Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 1 of 23 PageID# 15534
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`RICHMOND DIVISION
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`Civil Action No. 3:14-cv-757-REP
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`SAMSUNG ELECTRONICS CO., LTD. and
`SAMSUNG ELECTRONICS AMERICA,
`INC.,
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`Plaintiffs,
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`-vs.-
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`NVIDIA CORPORATION, VELOCITY
`MICRO, INC. D/B/A VELOCITY MICRO,
`AND VELOCITY HOLDINGS, LLC,
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`Defendants.
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`MEMORANDUM IN SUPPORT OF DEFENDANT NVIDIA CORPORATION’S
`OPPOSITION TO PLAINTIFF SAMSUNG’S MOTION TO SEVER
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 2 of 23 PageID# 15535
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`TABLE OF CONTENTS
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`I.
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`INTRODUCTION..............................................................................................................1
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`II.
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`STATEMENT OF FACTS ................................................................................................3
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`A.
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`B.
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`Procedural History -------------------------------------------------------------------------- 3
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`Samsung’s Claims and NVIDIA’s Counterclaims ------------------------------------- 5
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`III. ARGUMENT ......................................................................................................................5
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`A.
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`B.
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`C.
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`D.
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`E.
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`F.
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`NVIDIA’S Counterclaims Should Be Tried In The Original Action ......................7
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`The Counterclaims Will Not Require Additional Witnesses or
`Documentary Evidence ..........................................................................................10
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`NVIDIA Will Be Prejudiced If Its Counterclaims Are Severed From the
`Original Action ......................................................................................................11
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`Samsung Will Not Be Prejudiced If The Counterclaims Are Tried In The
`Original Action ......................................................................................................12
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`1.
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`2.
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`The Counterclaims Can Be Tried Under The Current Schedule ...............12
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`NVIDIA Did Not Delay In Asserting Its Counterclaims ...........................14
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`Adjudicating NVIDIA’s Counterclaims In The Original Action Will Be
`More Efficient Than Severing Those Four Claims ..................................................8
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`At The Least, The Court Should Either Stay A Decision On Severing
`NVIDIA’s Counterclaims Until After The Markman Hearing Or Order
`Separate Trials Under Rule 42(b) ..........................................................................16
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`CONCLUSION ..............................................................................................................................17
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`i
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 3 of 23 PageID# 15536
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`Cases
`
`TABLE OF AUTHORITIES
`
`17th Street Assocs., LLP v. Markel Intl Ins. Co.,
`373 F. Supp. 2d 584 (E.D. Va. 2005) --------------------------------------------------------------- 5, 6
`
`A&E Prods. Group L.P. v. Accessor Corp.,
`No. 00 Civ. 7271, 2002 WL 1041321 (S.D.N.Y. May 23, 2002) ---------------------------- 10, 11
`
`Acevedo Garcia v. Vera Monroig,
`204 F.R.D. 26 (D. P.R. 2001) -------------------------------------------------------------------------- 16
`
`Acevedo–Garcia v. Monroig,
`351 F.3d 547 (1st Cir. 2003) ------------------------------------------------------------------------ 6, 17
`
`Baergas v. City of New York,
`Case No. 04 Civ. 2944, 2005 WL 2105550 (S.D. N.Y. 2005) -------------------------- 5, 7, 8, 12
`
`Bern Unlimited, Inc. v. Burton Corp.,
`25 F.Supp.3d 170 (D. Mass. 2014) -------------------------------------------------------------------- 16
`
`Chaudhry v. Gallerizzo,
`174 F.3d 394, 404 (4th Cir. 1999) --------------------------------------------------------------------- 15
`
`CVI/Beta Ventures, Inc. v. Custom Optical Frames, Inc.,
`896 F. Supp. 505 (D. Md. 1995) ------------------------------------------------------------------ 10, 11
`
`Gaffney v. Riverboat Servs. of Ind., Inc.,
`451 F.3d 424 (7th Cir. 2006) ---------------------------------------------------------------------------- 6
`
`German by German v. Fed. Home Loan Mortg. Corp.,
`896 F. Supp. 1385 (S.D. N.Y. 1995) ---------------------------------------------------------------- 6, 7
`
`James River Mgmt. v. Kehoe,
`No. 3:09cv387, 2010 WL 431473 (E.D. Va. Feb. 5, 2010) ------------------------------------- 6, 16
`
`John S. Clark Co., v. Travelers Indem. Co. of Ill.,
`359 F. Supp. 2d 429 (M.D.N.C. 2004) ---------------------------------------------------------------- 6
`
`Johnson v. BAE Sys. Land & Armaments, L.P.,
`No. 3:12–cv–1790–D, 2014 WL 1714487 (N.D. Tex. Apr. 30, 2014) ---------------------------- 5
`
`Kimmel v. Cavalry Portfolio Servs., LLC,
`747 F. Supp. 2d 427 (E.D. Pa. 2010) ------------------------------------------------------------------ 7
`
`Koh v. Microtek International, Inc.,
`250 F. Supp. 2d 627 (E.D. Va. 2003) ------------------------------------------------------------------ 8
`
`
`
`ii
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`Medicenters of Am., Inc. v. T & V Realty & Equip. Corp.,
`371 F. Supp. 1180 (D.C. Va. 1974) ------------------------------------------------------------------- 15
`
`Newport News Holdings Corp. v. Virtual City Vision, Inc.,
`650 F.3d 423 (4th Cir. 2011) --------------------------------------------------------------------------- 15
`
`Nortel Networks Inc. v. Foundry Networks, Inc.,
`No. 01CV10442, 2003 WL 26476584 (D. Mass. Mar. 24, 2003) -------------------------------- 11
`
`Saint John’s African Methodist Episcopal Church v. GuideOne Specialty Mut. Ins. Co.,
`902 F.Supp.2d 783, 785 (E.D. Va. 2012) ------------------------------------------------------------- 6
`
`Thornapple Associates, Inc. v. Izadpanah,
`No. 1:14cv767, 2014 WL 7239018 (E.D. Va. 2014) ------------------------------------------------ 7
`
`United Mine Workers of Am. v. Gibbs,
`383 U.S. 715 (1966) -------------------------------------------------------------------------------------- 5
`
`Verizon Md. Inc. v. RCN Telecom Servs., Inc.,
`232 F. Supp. 2d 539 (D. Md. 2002) ----------------------------------------------------------------- 6, 9
`
`Verizon Md., Inc. v. Global NAPS, Inc.,
`377 F.3d 355 (4th Cir. 2004) ---------------------------------------------------------------------------- 6
`
`Statute
`
`28 U.S.C. §1404(a) ....................................................................................................................... 14
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`iii
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 5 of 23 PageID# 15538
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`Defendant NVIDIA Corporation (“NVIDIA”) respectfully opposes Samsung’s Motion to
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`Sever.
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`I.
`
`INTRODUCTION
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`On April 14, 2015, in full compliance with all rules of procedure and prior to the Court-
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`ordered deadline for the amendment of pleadings, NVIDIA amended its answer to assert four
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`counterclaim patents—patents for which NVIDIA gave Samsung notice of infringement more
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`than a year ago. The NVIDIA counterclaim patents are directed at Samsung’s infringing
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`graphics processing units (“GPUs”), the same technology and type of product that Samsung
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`alleges infringes six of the asserted Samsung patents. On April 15, 2015, with full knowledge of
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`NVIDIA’s counterclaims, Samsung sought an aggressive discovery and trial schedule. But
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`Samsung now contends that the Court’s current schedule is “impossible” to meet unless
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`NVIDIA’s counterclaims are severed. (Mot. at 10.)
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`What is sauce for the goose is sauce for the gander. Samsung has known about the four
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`NVIDIA counterclaim patents since early 2014, and is currently litigating related patents in an
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`International Trade Commission (“ITC”) Investigation. Samsung is well-prepared to litigate the
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`counterclaim patents now. Samsung’s request to sever and avoid the Court’s typical schedule on
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`NVIDIA’s counterclaims merely reflects Samsung’s tactical preferences. Having chosen to
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`litigate this suit in this district as a plaintiff, Samsung should be held to the Court’s typical
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`schedule as a defendant.
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`Samsung’s Motion to Sever should be denied because: (i) the products at issue in the
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`counterclaims relate to the same type of products (GPUs) at issue for six of Samsung’s eight
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`asserted patents, (ii) Samsung has failed to demonstrate that severing NVIDIA’s timely-filed
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`counterclaims from this case would promote the prompt and efficient disposition of the litigation,
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`and (iii) Samsung has not demonstrated that it will suffer prejudice if NVIDIA’s counterclaims
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`1
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 6 of 23 PageID# 15539
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`remain in the case. Samsung’s suggested approach would require two trials with overlapping
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`fact evidence about GPU technology and require two juries to learn about GPUs. Samsung’s
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`preferred approach would grant Samsung the undeserved tactical advantage of delaying
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`NVIDIA’s case, after Samsung persuaded this Court to enter an aggressive trial schedule on its
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`own GPU-related patents. Indeed, at the pretrial conference on April 15, Samsung argued that its
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`claims, which involve twice the number of patents as NVIDIA’s counterclaims, could be ready
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`for trial in mid-November, seven months after discovery opened on April 6. NVIDIA submits
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`that judicial efficiency and fairness counsel in favor of trying NVIDIA’s counterclaims with
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`Samsung’s claims in a single trial. The Court’s mid-January trial date is more than eight months
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`after discovery began on NVIDIA’s counterclaims, and two months after Samsung said it could
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`be ready for trial.
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`To the extent the Court believes that the best approach is uncertain at this early stage in
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`the proceedings, the Court need not decide the severance issue now. By the close of discovery,
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`in September, the issues in the case are likely to be narrowed, and some patents are likely to have
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`dropped out of the case. The Court can readily defer its decision on whether one trial or two
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`trials are best until that time, when the scope of the trial is more certain. And if the Court
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`decides that Samsung’s claims and NVIDIA’s counterclaims should be tried separately, it should
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`simply order separate trials pursuant to Rule 42(b), rather than using the more complicated
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`procedural process of severing claims under Rule 21.
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`Samsung provides no compelling reason to depart from the Court’s current schedule and
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`sever NVIDIA’s timely-filed counterclaims at this time. Samsung’s motion should be denied.
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`2
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`II.
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`STATEMENT OF FACTS
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`A.
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`Procedural History
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`This is one of five cases pending between Samsung and NVIDIA in district courts and
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`the International Trade Commission (“ITC”). In 2013 and early 2014, NVIDIA notified
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`Samsung that it was infringing a number of NVIDIA’s patents related to NVIDIA’s GPU-related
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`technology. The parties engaged in lengthy negotiations, and exchanged claim charts and
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`infringement contentions for the patents asserted in both the claims and counterclaims asserted
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`here. When negotiations broke down, NVIDIA had no choice but to seek redress in the courts.
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`NVIDIA sued Samsung in the ITC on September 4, 2014 alleging infringement of Samsung
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`GPUs on similar, and in some cases related, patents to the Counterclaim patents here (the “932
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`Investigation”). Samsung responded by suing NVIDIA first in this Court and shortly thereafter,
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`on November 21, 2014, in the ITC on patents related to NVIDIA’s GPUs (the “941
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`Investigation”). There is no question that this lawsuit is part and parcel of a larger dispute
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`between the two parties related primarily to GPU technology.
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`Samsung filed this action on November 4, 2014, asserting infringement of eight patents.
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`(Dkt. No. 1.) Because its complaint was deficient, Samsung filed an amended complaint on
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`December 19, 2014. (Dkt. No. 30.) Samsung’s First Amended Complaint was over 400 pages
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`long and included over 3,200 numbered allegations. Defendants filed their Answers on January
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`26, 2015. (Dkt. Nos. 50-52.) As a compromise to avoid unnecessary motion practice and
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`address purported concerns identified by Samsung, Defendants filed First Amended Answers on
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`March 3, 2015 and Second Amended Answers on March 31, 2015.
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`On January 12, 2015, Defendants filed a motion requesting transfer of venue of
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`Samsung’s claims against NVIDIA to the Northern District of California and to sever and stay
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`the claims against Velocity, a small eight-person Virginia-based company that resells some
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`3
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`NVIDIA products. (Dkt. Nos. 46-47.) After due consideration, the Court denied Defendants’
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`motion to sever, transfer, and stay on April 3, 2015.
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`On March 26, 2015, the Court entered a Scheduling Order (Dkt. No. 65) requiring that
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`motions for joinder of additional parties or amendment of the pleadings be filed by April 10,
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`2015. The Court also scheduled a pre-trial conference for April 15, 2015. (Dkt. No. 64.) On
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`April 6, 2015, the parties held their Rule 26(f) conference. On April 10, 2015, the Court granted
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`Defendants’ unopposed motion for an extension of time to file Amended Answers and
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`Counterclaims, allowing Defendants until April 15, 2015 to assert counterclaims. (Dkt. No. 80.)
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`On April 14, 2014, before the deadline for filing counterclaims and less than two weeks
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`after the Court denied Defendants’ transfer, sever, and stay motion, NVIDIA filed a motion for
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`leave to file its proposed counterclaims, which the Court granted. (Dkt. No. 83-84.) NVIDIA’s
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`counterclaims assert that Samsung infringes four NVIDIA patents relating to graphics processing
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`technology (“NVIDIA Counterclaim Patents”). Samsung has been on notice of the patents
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`asserted in NVIDIA’s counterclaims for more than a year, since early 2014, when NVIDIA
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`provided detailed claim charts setting forth its infringement contentions.
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`The Court held a pretrial conference on April 15, 2015, during which Samsung advocated
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`for an early November 2015 trial. The Court set trial for January 11, 2016.
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`NVIDIA has already agreed to Samsung’s request for a two-week extension of time for
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`Samsung to respond to NVIDIA’s counterclaims and additional time for Samsung to respond to
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`NVIDIA’s discovery requests related to the counterclaim patents. Samsung’s answer to
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`NVIDIA’s counterclaims is due on May 21, 2015 and its responses to NVIDIA’s discovery
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`requests related to the counterclaim patents are due on June 1.
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`4
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`B.
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`Samsung’s Claims and NVIDIA’s Counterclaims
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`Six of Samsung’s eight asserted patents are asserted against NVIDIA’s graphic
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`processing units (“GPUs”). (Mot. at 5 (asserting that “NVIDIA processors and GPUs infringe
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`[the ʼ158, ʼ938, and ʼ602 Patents], as do Velocity computer systems that incorporate those
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`processors and GPUs” and that “NVIDIA processors and GPUs made using Samsung’s patented
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`processes infringe [the ʼ902 and ʼ675 Patents]. Velocity computers that incorporate those
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`processors and GPUs also infringe these patents.”); see also Ex. F-1 to Samsung Infringement
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`Contentions (accusing NVIDIA GPUs intended for use in laptop computers of infringing the
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`’724 patent)). Two other patents are asserted solely against Velocity products and are unrelated
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`to Samsung’s other six asserted patents.
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`All four NVIDIA Counterclaim Patents relate to graphics processing and display and
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`accuse Samsung GPUs—the same type of product accused by Samsung—of infringement.
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`III. ARGUMENT
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`Federal Rule of Civil Procedure 21 permits a court, on motion or on its own, to add or
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`drop parties or sever claims when doing so would serve the ends of justice and further the
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`prompt and efficient disposition of the litigation. See, e.g., 17th Street Assocs., LLP v. Markel
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`Intl Ins. Co., 373 F. Supp. 2d 584, 598 n.9 (E.D. Va. 2005). Importantly, however, “[u]nder the
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`[Federal] Rules, the impulse is toward entertaining the broadest possible scope of action
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`consistent with fairness to the parties; joinder of claims … is strongly encouraged.” United
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`Mine Workers of Am. v. Gibbs, 383 U.S. 715, 724 (1966). Moreover, the movant “bears the
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`burden in seeking severance under Rule 21.” Johnson v. BAE Sys. Land & Armaments, L.P., No.
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`3:12–cv–1790–D, 2014 WL 1714487, at *35 (N.D. Tex. Apr. 30, 2014); see also Baergas v. City
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`of New York, Case No. 04 Civ. 2944, 2005 WL 2105550 at *7 (S.D. N.Y. 2005) (holding that the
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`party seeking severance under Rule 21 bears the burden of proving that such action is necessary.)
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`Courts use Rule 21 to sever and drop claims based on “considerations of fundamental
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`fairness, judicial economy, prejudice, undue delay, as well as the dual threat of duplicitous
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`litigation and inconsistent verdicts.” John S. Clark Co., v. Travelers Indem. Co. of Ill., 359 F.
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`Supp. 2d 429, 441 (M.D.N.C. 2004). Specific considerations include whether the issues sought
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`to be tried separately are significantly different from one another and when determining whether
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`to sever under Rule 21, “[p]rinciples of fundamental fairness and judicial efficiency are the twin
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`lodestars.” Verizon Md. Inc. v. RCN Telecom Servs., Inc., 232 F. Supp. 2d 539, 547 (D. Md.
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`2002), aff’d in part & dismissed in part sub nom. Verizon Md., Inc. v. Global NAPS, Inc., 377
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`F.3d 355 (4th Cir. 2004). Thus, the Court must consider whether the party opposing the
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`severance will be prejudiced if it is granted and whether the party requesting the severance will
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`be prejudiced if it is not granted. See, e.g., German by German v. Fed. Home Loan Mortg.
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`Corp., 896 F. Supp. 1385, 1400 (S.D. N.Y. 1995). Ultimately, the decision to sever a claim is
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`within the discretion of the district court. 17th Street Assocs., 373 F. Supp. 2d at 598.
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`As an alternative to severance, a district court may order separate trials pursuant to
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`Federal Rule of Civil Procedure 42(b). While severance divides a case containing multiple
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`claims into separate actions, Rule 42(b) divides a single case into separate trials that remain
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`under the umbrella of the original action. See James River Mgmt. v. Kehoe, No. 3:09cv387, 2010
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`WL 431473 (E.D. Va. Feb. 5, 2010) (Payne, J.); see also Acevedo–Garcia v. Monroig, 351 F.3d
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`547, 559 (1st Cir. 2003). The decision whether to order separate trials under Rule 42(b) is in the
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`sound discretion of the trial judge. Saint John’s African Methodist Episcopal Church v.
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`GuideOne Specialty Mut. Ins. Co., 902 F.Supp.2d 783, 785 (E.D. Va. 2012). However,
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`regarding the decision to proceed under Rule 21 or Rule 42(b), district courts should bifurcate
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`claims under Rule 42(b), rather than sever them under Rule 21, when they are factually
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`6
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`interlinked. See Gaffney v. Riverboat Servs. of Ind., Inc., 451 F.3d 424, 442 (7th Cir. 2006).
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`Also, where a court has “serious concerns about judicial economy if it were to sever … [a] case,
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`resulting in … independent actions,” proceeding instead under Rule 42(b) and “[o]rdering two
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`separate trials addresses these economy concerns while also allowing the underlying action to
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`proceed on schedule.” Thornapple Associates, Inc. v. Izadpanah, No. 1:14cv767, 2014 WL
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`7239018 at *3 (E.D. Va. 2014).
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`A.
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`NVIDIA’S Counterclaims Should Be Tried In The Original Action
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`It is Samsung’s burden to demonstrate that the technology at issue in NVIDIA’s
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`counterclaims is not sufficiently distinct such that severance is appropriate, and the
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`counterclaims are not peripheral. See, e.g., Baergas, 2005 WL 2105550 at *7. Samsung has
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`failed to meet its burden.
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`Samsung contends that the technology at issue is different merely because the NVIDIA
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`Counterclaim Patents are different from Samsung’s eight asserted patents. But of course the
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`patents are different. The question, however, is whether they are so “significantly different from
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`one another” as to make severance appropriate. German by German, 896 F.Supp. at 1400
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`(emphasis added). They are not. NVIDIA’s counterclaims are all directed at graphics
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`processing and relate directly to the core products that are the focus of the overall dispute
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`between the parties: GPUs. See, e.g., Kimmel v. Cavalry Portfolio Servs., LLC, 747 F. Supp. 2d
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`427 (E.D. Pa. 2010) (“the mere presence of different factual or legal questions is not enough to
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`support severing [counterclaims]”).
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`Although the Samsung patents and NVIDIA counterclaim patents are asserted against
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`different products (i.e., NVIDIA GPUs versus Samsung GPUs), Samsung concedes that the
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`accused products are primarily GPUs for both Samsung’s claims and NVIDIA’s counterclaims.
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`(Mot. at 7-8.) Accordingly, many of the same products are at issue in both the Samsung claims
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`7
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`and the NVIDIA counterclaims. For example, NVIDIA’s G80 is one of many NVIDIA GPUs
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`that will be at issue in both Samsung’s case and NVIDIA’s case because it is an accused product
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`for one of Samsung’s asserted patents and it is a commercial embodiment of one of NVIDIA’s
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`asserted patents. As a result, NVIDIA will rely on the same financial and marketing witnesses
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`and documents for alleged damages related to Samsung’s claims and for commercial success for
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`NVIDIA’s counterclaims. In addition, Samsung has conceded that several of its products
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`accused by NVIDIA, including the Galaxy Tab S 10.5 WiFi, the Galaxy Tab S 8.4, and the
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`Galaxy S6 and Galaxy S6 Edge, embody the technology claimed in Samsung’s ’158 patent, so
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`those products will already be a part of Samsung’s case.
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`In support of its argument that NVIDIA’s claims are peripheral, Samsung relies on Koh v.
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`Microtek International, Inc., 250 F. Supp. 2d 627 (E.D. Va. 2003). Koh is inapposite. There, the
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`plaintiff brought claims against both a defendant manufacturer and a defendant reseller. The
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`defendant manufacturer moved to transfer the case to a more convenient venue and to sever and
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`stay the claims against the defendant reseller, arguing that the claims against the reseller were
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`peripheral to the main action. Here, NVIDIA has asserted counterclaims solely against
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`Samsung, which does manufacture the accused products of which the infringing GPUs are a
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`component. Moreover, Samsung does not argue that NVIDIA’s counterclaims are peripheral to
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`the main action because it does not manufacture the accused GPUs; rather it argues that the
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`claims are peripheral because the technology is different. But NVIDIA has explained above why
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`this argument is wrong and does not support severance.
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`B.
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`Adjudicating NVIDIA’s Counterclaims In The Original Action Will Be More
`Efficient Than Severing Those Four Claims
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`It is Samsung’s burden to show that trying NVIDIA’s counterclaims and Samsung’s
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`claims together in a single action will not be more efficient for the Court and the parties than
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`8
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 13 of 23 PageID# 15546
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`severing the counterclaims against Samsung. See e.g., Baergas, 2005 WL 2105550 at *7.
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`Samsung has not met that burden and, regardless, the record demonstrates that severance will be
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`less efficient.
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`Principles of judicial efficiency are at the heart of a motion to sever. See, e.g., Verizon
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`Md. Inc., 232 F. Supp. 2d at 547. Here, after the Court and the jury become familiar with and
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`learn how GPUs—the core products in this case—function, both will be in a better position to
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`decide all of the claims, including NVIDIA’s counterclaims. Proceeding in one action will
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`therefore be more efficient than requiring two separate juries to learn and understand what
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`Samsung concedes is “complex” subject matter. (Mot. at 9.)
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`Samsung argues that if the cases are not severed, the Court and the jury will have to
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`tackle two different cases, one involving Samsung’s patents and one involving NVIDIA’s
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`patents. (Mot. at 9.) But as set forth above, this is argument is flawed. Severance will require
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`two juries, as opposed to one, to learn about the operation of GPUs. Moreover, whether to order
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`severance turns on whether the enormous loss of efficiency (for which Samsung advocates) in
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`having two separate actions between the same two parties before the same Court is outweighed
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`by factors such as whether a jury can understand and deal with the complexity of multiple
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`claims. Here, there is no sound justification in expending the additional court resources of
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`having two trials or burdening two juries when this litigation is part of a single dispute between
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`NVIDIA and Samsung.
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`Samsung contends that the Court should sever the counterclaims because “the Court will
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`be required to consider different claim construction issues, different prior art, different damages
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`theories, and different documents and witnesses to evaluate NVIDIA’s and Samsung’s respective
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`claims.” (Mot. at 8.) But the Court will have to deal with different claim construction issues,
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`9
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 14 of 23 PageID# 15547
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`different prior art, different damages theories, different documents, and different witnesses
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`regardless of whether it severs the counterclaims.1 There is no loss of efficiency if the Court
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`keeps the counterclaims in the original action where they belong. See, e.g., A&E Prods. Group
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`L.P. v. Accessor Corp., No. 00 Civ. 7271, 2002 WL 1041321 (S.D.N.Y. May 23, 2002) (denying
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`motion to sever although the patent infringement counterclaims would require separate witnesses
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`and documentary proof and the subject matter of testimony would be different).
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`Samsung relies on CVI/Beta Ventures, Inc. v. Custom Optical Frames, Inc., 896 F. Supp.
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`505 (D. Md. 1995), but that case is inapposite. In CVI, the Court found that severance was
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`appropriate because “[t]wo of the three individual joint owners of the [counterclaim] patent are
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`not parties to the current litigation and four parties in the current litigation have no interest in the
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`Second Counterclaim at all.” Id. at 507. Thus, “[p]ermitting the Counter-Claim to go forward in
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`this case would mean that each Plaintiff uninvolved in the Counterclaim would bear the burden
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`of extended and costly discovery, pretrial procedures and motions practice while they waited for
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`adjudication of their own claims.” Id. Based on those unique inefficiencies, the CVI court
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`granted severance. No such inefficiencies exist here because NVIDIA’s counterclaims are
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`asserted solely against Plaintiff Samsung and its products.
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`More on point is A&E Products Group L.P. In that case, the plaintiff alleged that four
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`styles of hangers sold by the defendant infringed four of plaintiff’s patents. The defendant’s
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`counterclaims alleged antitrust violations in the hanger industry as well as defamation, tortious
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`interference with business relations, patent infringement, and false patent marketing. The
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` 1
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` As stated by Samsung at the pretrial conference, Samsung’s own eight patents cover five
`different areas of technology. And two of its asserted patents are unrelated to the other six and
`do not accuse GPUs. Samsung fails to explain why having the Court and a jury adjudicate its
`claims under those eight patents and disparate technologies in a single action is not a problem.
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 15 of 23 PageID# 15548
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`plaintiff moved to sever the counterclaims arguing that the antitrust, defamation, and tortious
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`interference claims were completely separate from plaintiff’s patent claims and the patent
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`infringement counterclaims were separate because the patents had different inventors, dates,
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`places of invention, and the like. Like Samsung, the plaintiff in A&E Products Group alleged
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`that the patent infringement counterclaims would require separate witnesses and documentary
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`proof and that the subject matter of the testimony would be different. The Court nevertheless
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`denied the motion to sever, stating that “[s]everance is a ‘procedural device to be employed only
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`in exceptional circumstances.’” 2002 WL 1041321 at *2. The Court further found that severance
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`was not appropriate because the defendant alleged that plaintiff’s use of its patents was linked to
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`plaintiff’s anti-competitive conduct and because severance “would not result in sufficient judicial
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`economy at this time.” Id. The same is true here. NVIDIA’s counterclaims relate to the same
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`kind of technology as Samsung’s claims, and there would be no judicial efficiency in severance.
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`C.
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`NVIDIA Will Be Prejudiced If Its Counterclaims Are Severed From the
`Original Action
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`NVIDIA will be prejudiced if its counterclaims are severed because resolution of its
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`counterclaims will be delayed despite the fact that they were timely filed and filed consistent
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`with the Court’s schedule.
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`NVIDIA should not be required to prepare its affirmative case on a delayed timeframe
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`and separately from Samsung’s claims against it. NVIDIA timely filed its counterclaims, which
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`are part of a larger business dispute between Samsung and NVIDIA related to their respective
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`GPUs. NVIDIA should not have to engage in two separate actions to resolve what is a single
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`dispute with Samsung. Nortel Networks Inc. v. Foundry Networks, Inc., No. 01CV10442, 2003
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`WL 26476584, at *14 (D. Mass. Mar. 24, 2003) (“[A] unitary action is more likely to result in a
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`just final disposition of this action.”).
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 16 of 23 PageID# 15549
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`D.
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`Samsung Will Not Be Prejudiced If The Counterclaims Are Tried In The
`Original Action
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`It is Samsung’s burden to prove that it will be prejudiced if the Court does not sever the
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`counterclaims against it. Baergas, 2005 WL 2105550 at *7. Samsung has not—and cannot—
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`meet this burden.
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`1.
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`The Counterclaims Can Be Tried Under The Current Schedule
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`Samsung contends that it will be prejudiced if the counterclaims are not severed because
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`it will otherwise be “impossible” for it to meet the current schedule. (Mot. at 10.) Samsung is
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`wrong for at least three reasons. Although Samsung sought a trial in early November, the Court
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`set a schedule that provides more than two additional months for the counterclaim discovery to
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`be completed and the claims to be efficiently tried to a single jury.
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`First, at the pretrial conference, Samsung advocated for an aggressive schedule (in a
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`forum it chose because of the availability of an aggressive schedule) knowing that NVIDIA had
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`already filed its counterclaims. Indeed, NVIDIA contacted Samsung two days before seeking
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`leave to file its counterclaims to give Samsung notice that NVIDIA intended to file
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`counterclaims and to give Samsung the opportunity to modify its schedule. Samsung refused to
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`change its schedule and sought a mid-November trial date. The actual trial date is January 11,
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`2016, providing more than two months of additional pretrial preparation time. Nonetheless,
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`Samsung wants to delay the resolution of NVIDIA’s counterclaims until April 11, 2016, almost a
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`year from now. See Exh. C to the Parties Proposed Pre-Trial Schedules and Trial Dates filed
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`April 21, 2015 (Dkt. No. 96-3) at p. 6. This is improper. Samsung should be held to a schedule
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`for which it pressed and for the reason it chose this forum.
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`Second, the NVIDIA Counterclaim Patents are similar to—and in some cases related to—
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`the patents and the accused products at issue in the 932 ITC Investigation between NVIDIA and
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`Case 3:14-cv-00757-REP-DJN Document 135 Filed 05/08/15 Page 17 of 23 PageID# 15550
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`Samsung. Samsung has engaged in ongoing discovery related to these similar patents since
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`December 2014. Samsung is aware of the documents it needs to produce, and has likely already
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`produced them in the 932 ITC Investigation. To further reduce