Case 3:14-cv-00757-REP-DJN Document 160 Filed 05/18/15 Page 1 of 20 PageID# 15667
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE EASTERN DISTRICT OF VIRGINIA
`RICHMOND DIVISION
`
`
`CIVIL ACTION NO. 3:14-CV-00757-REP
`
`
`
`
`
`
`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.
`
`REPLY IN SUPPORT OF SAMSUNG’S MOTION
`TO SEVER NVIDIA’S PATENT INFRINGEMENT COUNTERCLAIMS
`
`
`
`

`

`Case 3:14-cv-00757-REP-DJN Document 160 Filed 05/18/15 Page 2 of 20 PageID# 15668
`
`TABLE OF CONTENTS
`
`
`Page
`INTRODUCTION ............................................................................................................. 1
`JOINDER SERVES NVIDIA’S STRATEGIC GOALS, NOT THE INTERESTS
`OF JUSTICE ...................................................................................................................... 1
`A.
`NVIDIA Has No Legitimate Explanation for Its Delay in Filing Its
`Counterclaims ........................................................................................................ 1
`Joinder Is Impractical Under NVIDIA’s Proposed Schedule, While
`Severance Will Provide Prompt Resolution of NVIDIA’s Counterclaims ............ 3
`The ITC Investigation Does Not Eliminate Samsung’s Prejudice from an
`Artificially Abbreviated Schedule ......................................................................... 5
`NVIDIA’S COUNTERCLAIM PATENTS ARE DISTINCT FROM
`SAMSUNG’S ASSERTED PATENTS AND RAISE SEPARABLE,
`PERIPHERAL ISSUES ..................................................................................................... 7
`A.
`NVIDIA’s Counterclaim Patents Are Directed Toward Graphics
`Processing and Samsung’s Patents Are Not .......................................................... 7
`NVIDIA’s Counterclaim and Samsung’s Patent Claims Share Few
`Exhibits and Witnesses ........................................................................................ 10
`IF THE COURT DENIES SEVERANCE, IT SHOULD IMPOSE CERTAIN
`CONDITIONS IN THE INTERESTS OF FAIRNESS AND JUSTICE ......................... 13
`CONCLUSION ................................................................................................................ 14
`
`I.
`II.
`
`III.
`
`IV.
`
`V.
`
`B.
`
`C.
`
`B.
`
`
`
`i
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`

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`Case 3:14-cv-00757-REP-DJN Document 160 Filed 05/18/15 Page 3 of 20 PageID# 15669
`
`TABLE OF AUTHORITIES
`
`
`Page
`
`CASES
`A&E Prods. Grp. L.P. v. Accessory Corp.,
`No. 00 CIV. 7271 (LMM), 2002 WL 1041321 (S.D.N.Y. May 23, 2002) .............................. 7
`Baergas v. City of N.Y.,
`No. 04CIV2944(BSJ)(HBP), 2005 WL 2105550 (S.D.N.Y. Sept. 1, 2005) .................... 12, 13
`Chase v. Pan–Pac. Broad., Inc.,
`750 F.2d 131 (D.C. Cir. 1984) .................................................................................................. 4
`Dee-K Enters., Inc. v. Heveafil Sdn. Bhd.,
`985 F. Supp. 640 (E.D. Va. 1997) ............................................................................................ 3
`Johnson v. BAE Sys. Land & Armaments, L.P.,
`No. 3:12-CV-1790-D, 2014 WL 1714487 (N.D. Tex. Apr. 30, 2014) ................................... 13
`Koh v. Microtek Int’l, Inc.,
`250 F. Supp. 2d 627 (E.D. Va. 2003) ....................................................................... 2, 5, 12, 13
`Medicenters of Am., Inc. v. T & V Realty & Equip. Corp.,
`371 F. Supp. 1180 (E.D. Va. 1974) .......................................................................................... 3
`Neifeld v. Steinberg,
`438 F.2d 423 (3d Cir. 1971)...................................................................................................... 4
`Nortel Networks Inc. v. Foundry Networks, Inc.,
`No. 01-CV-10442-DPW, 2003 WL 26476584 (D. Mass. Mar. 24, 2003) ............................... 7
`Polygroup Ltd. v. Gen. Foam Plastics Corp.,
`No. 3:12CV48, 2012 WL 2554645 (E.D. Va. June 28, 2012) .................................................. 3
`Thornapple Assocs., Inc. v. Izadpanah,
`No. 1:14CV767 JCC/TRJ, 2014 WL 7239018 (E.D. Va. Dec. 17, 2014) .............................. 14
`
`OTHER AUTHORITIES
`15 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure ............................. 3
`
`RULES
`Fed. R. Civ. P. 21 .......................................................................................................................... 12
`
`Fed. R. Civ. P. 42 .................................................................................................................... 13, 14
`
`
`
`ii
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`
`I.
`
`INTRODUCTION
`
`NVIDIA’s opposition brief fails to rebut the demonstrated prejudice to Samsung if
`
`NVIDIA’s eleventh-hour patent infringement counterclaims are allowed to proceed as part of the
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`original action filed over six months ago. NVIDIA instead argues that a purported overlap in
`
`technology might lead to some “efficiencies” in the course of the litigation. Not only is that
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`argument not sufficiently supported by the facts, but vague promises of judicial economy cannot
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`outweigh the unfair burden on the Court and on Samsung from combining these distinct sets of
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`claims in one proceeding. These are the precise circumstances for which this Court’s discretion
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`to sever peripheral claims was designed, and the Court should exercise that discretion to sever
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`NVIDIA’s patent infringement counterclaims.
`
`II.
`
`JOINDER SERVES NVIDIA’S STRATEGIC GOALS, NOT THE INTERESTS OF
`JUSTICE
`
`A.
`
`NVIDIA Has No Legitimate Explanation for Its Delay in Filing Its
`Counterclaims
`
`NVIDIA admits that it considered asserting the NVIDIA Counterclaim Patents against
`
`Samsung in early 2014 (see Opp. at 14), but fails to explain why it waited over a year to actually
`
`file. NVIDIA further offers no justification or explanation about why, when it finally elected to
`
`sue Samsung on these patents, it did so as infringement counterclaims in this action the day
`
`before the pretrial conference. NVIDIA could have (but did not) assert the NVIDIA
`
`Counterclaim Patents on September 4, 2014 when it filed a complaint in the International Trade
`
`Commission (the “932 ITC Investigation”). NVIDIA also could have (but did not) assert the
`
`NVIDIA Counterclaim Patents on January 26, 2015, March 3, 2015 or March 31, 2015 when it
`
`filed its first three Answers in this action. (Dkt. Nos. 50, 59, 70.) That NVIDIA waited until
`
`11:14 PM on April 14, 2015—46 minutes before the day of the Court’s scheduling conference to
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`1
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`set the trial date—to assert these patents as counterclaims in this action reveals its intentions: to
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`maximize the disruption to the Court’s pretrial schedule sufficient to justify a later trial date.
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`Neither Samsung nor this Court knew that NVIDIA would assert the NVIDIA
`
`Counterclaim Patents when the parties exchanged proposed pretrial schedules in early April.
`
`NVIDIA first notified Samsung that it would assert patent infringement counterclaims on April
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`13—two days before the scheduling conference to set the trial date; even then, NVIDIA did not
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`identify which patents it would assert. NVIDIA first identified the NVIDIA Counterclaim
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`Patents just 11 hours before the Court’s scheduled pretrial conference, providing so little notice
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`that the Court was unable to review NVIDIA’s counterclaims before the pretrial conference.
`
`NVIDIA’s opposition brief ignores this timeline of events and its practical effect on the
`
`parties. Instead, NVIDIA repeatedly asserts that its counterclaims were “timely.” (Opp. at 1-2,
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`11, 14-15.) But the technical timeliness of the counterclaims is not at issue; had NVIDIA not
`
`met the Court’s extended filing deadline, the need for severance would never have arisen.
`
`Procedurally proper counterclaims may be severed if they are peripheral and severance would
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`promote fundamental fairness and judicial economy. See e.g., Koh v. Microtek Int’l, Inc., 250 F.
`
`Supp. 2d 627, 632 (E.D. Va. 2003). And that is the situation here: while technically timely,
`
`NVIDIA’s counterclaims were not asserted until mid-April, in an effort to delay the proceedings
`
`in this action, including the trial schedule, and distort the principles of fundamental fairness and
`
`judicial economy.
`
`NVIDIA attempts to minimize its gamesmanship by mischaracterizing Samsung’s and
`
`the Court’s actions. NVIDIA protests that “Samsung advocated for an aggressive schedule …
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`knowing that NVIDIA had already filed its counterclaims.” (Opp. at 12.) NVIDIA also claims,
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`without further explanation, that the “Court set trial for January 11, 2016.” (Opp. at 4.) At the
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`April 15, 2015 hearing, however, Samsung advocated for an aggressive case schedule for the
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`Samsung Patents alone. And the Court set the January 11, 2016 trial date and pretrial dates for
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`the Samsung Patents alone. As NVIDIA knows, the Court explicitly stated that the trial and
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`pretrial dates did not apply to the NVIDIA Counterclaim Patents, and it invited Samsung to file a
`
`motion to sever.
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`Finally, NVIDIA’s excuse that its permissive counterclaims would have jeopardized its
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`motion to transfer is wrong as a matter of law. (See Opp. at 15.) A defendant does not waive its
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`venue objections by filing a permissive counterclaim. Polygroup Ltd. v. Gen. Foam Plastics
`
`Corp., No. 3:12CV48, 2012 WL 2554645, at *6 (E.D. Va. June 28, 2012) (Payne, J.). In
`
`Polygroup, this Court explicitly rejected the sole case that NVIDIA relies on, Medicenters of
`
`America, Inc. v. T & V Realty & Equipment Corp., 371 F. Supp. 1180, 1184 (E.D. Va. 1974).
`
`The Court adopted the holding of modern cases “that no Rule 12(b) defense is waived by the
`
`assertion of a counterclaim, whether permissive or compulsory.” Polygroup, 2012 WL 2554645,
`
`at *6 (citing Dee-K Enters., Inc. v. Heveafil Sdn. Bhd., 985 F. Supp. 640, 643 (E.D. Va. 1997);
`
`15 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1397, at 790;
`
`Chase v. Pan–Pac. Broad., Inc., 750 F.2d 131, 132 (D.C. Cir. 1984); Neifeld v. Steinberg, 438
`
`F.2d 423, 428 n.10 (3d Cir. 1971)). NVIDIA could have brought the patent infringement
`
`counterclaims without affecting its pending motion to transfer. But it decided not to as part of its
`
`effort to disrupt the schedule on Samsung’s claims.
`
`B.
`
`Joinder Is Impractical Under NVIDIA’s Proposed Schedule, While
`Severance Will Provide Prompt Resolution of NVIDIA’s Counterclaims
`
`Any purported prejudice to NVIDIA is dwarfed by the unfair prejudice that Samsung
`
`would suffer if the Court adopts NVIDIA’s proposed pretrial schedule for the NVIDIA
`
`Counterclaim Patents. NVIDIA’s proposed schedule would force Samsung to try the NVIDIA
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`3
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`Counterclaim Patents just nine months after NVIDIA filed its counterclaims. This schedule
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`provides insufficient time for Samsung to prepare its defense, giving Samsung:
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`• 38 days to prepare its invalidity contentions (May 22, 2015);
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`• 9 weeks to prepare for the Court’s technical tutorial (June 17, 2015);
`
`•
`
`•
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`fewer than 3 months to prepare for the Markman Hearing (July 6, 2015);
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`just 6 months to complete all fact and expert discovery on the NVIDIA Counterclaim
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`Patents (October 30, 2015); and
`
`•
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`fewer than 7 months before summary judgment motions are due (November 5, 2015).
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`The only prejudice that NVIDIA identifies is that (1) “resolution of its counterclaims will
`
`be delayed” and (2) NVIDIA will be required to “engage in two separate actions.” (Opp. at 11.)
`
`Both claims of prejudice are illusory.
`
`First, severance will not significantly delay trial on the NVIDIA Counterclaim Patents.
`
`Samsung proposes an April 2016 trial date, just three months after the trial on the Samsung
`
`Patents and less than a month later than the March 14, 2016 trial date that NVIDIA initially
`
`proposed. (Dkt. No. 82-1.) Samsung’s proposed 12-month schedule for the NVIDIA
`
`Counterclaim Patents is consistent with the Court’s practices1 and faster than the time to trial for
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`Samsung’s claims (14 months).
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`NVIDIA does not explain the sudden urgency. NVIDIA is happy to drag its feet when it
`
`suits its interests. NVIDIA apparently believed that Samsung infringed the NVIDIA
`
`Counterclaim Patents for over a year before asserting them as counterclaims in this action. (Opp.
`
`at 14.) Before it filed its counterclaims, NVIDIA sought a trial date 16 months after Samsung
`
`
`1 The average time to trial in the Eastern District of Virginia is 11.9 months. (See
`http://www.uscourts.gov/Statistics/FederalJudicialCaseloadStatistics/caseload-statistics-
`2014.aspx, last accessed May 18, 2015.)
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`4
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`filed its Complaint on the Samsung Patents (Dkt. No. 82-1). But now NVIDIA advocates a
`
`9-month pretrial schedule for the NVIDIA Counterclaim Patents. NVIDIA should live by its
`
`own cliché—the sauce for the goose is sauce for the gander.
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`Second, because the NVIDIA Counterclaim Patents are so different from the Samsung
`
`Patents, severance will not prejudice NVIDIA by forcing NVIDIA to engage in two separate
`
`actions. As explained in Section IV, there will be little, if any, overlap in the pretrial and trial
`
`preparations for the NVIDIA Counterclaim Patents and the Samsung Patents. NVIDIA will be
`
`forced to engage in two distinct actions whether its counterclaims are severed or not.
`
`C.
`
`The ITC Investigation Does Not Eliminate Samsung’s Prejudice from an
`Artificially Abbreviated Schedule
`
`NVIDIA’s discussion about the 932 ITC Investigation is a misdirection. To decide this
`
`motion, the Court must determine whether the NVIDIA Counterclaims raise peripheral issues in
`
`this action and whether it would be efficient to try the NVIDIA Counterclaim Patents with the
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`Samsung Patents. See Koh, 250 F. Supp. 2d at 632. It is thus irrelevant how similar the NVIDIA
`
`Counterclaim Patents are to the patents NVIDIA asserts in the 932 ITC Investigation. The
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`relevant inquiry for this motion to sever is how similar NVIDIA’s Counterclaim Patents are to
`
`the Samsung Patents.
`
`NVIDIA suggests that the similarities between NVIDIA’s Counterclaim Patents and the
`
`NVIDIA patents at issue in the ITC investigation would somehow allow Samsung to prepare for
`
`trial on the Counterclaim Patents more quickly. But NVIDIA greatly overstates those
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`similarities and their effect on the ability to be ready for trial in this case. The NVIDIA
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`Counterclaim Patents are necessarily different from the patents that NVIDIA asserts in the 932
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`ITC Investigation—different patents, by definition, claim different inventions. And because they
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`are different, the NVIDIA Counterclaim Patents require different and new discovery. Even
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`patents in the same technical field require independent prior art searches and non-infringement
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`analyses, and implicate different terms for claim construction. NVIDIA identifies seven
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`inventors that are listed on both the NVIDIA Counterclaim Patents and the patents asserted in the
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`932 ITC Investigation. (See Opp. at 13.) NVIDIA omits that eight of the inventors of the
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`NVIDIA Counterclaim Patents are not listed as inventors in any of the patents asserted in the 932
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`ITC Investigation.2 Even the overlapping inventors will need to be re-deposed because the
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`NVIDIA Counterclaim Patents claim different inventions. The parties will also need extensive
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`discovery from third parties, some of them foreign—a problem that NVIDIA’s cross-use
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`proposal did not address. (See Opp. at 13.) Finally, because Samsung’s counsel in this action is
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`not involved in the 932 ITC Investigation, they are unfamiliar with the discovery in the 932 ITC
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`Investigation, including the confidential document production and depositions in that action.
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`The alleged similarity between the NVIDIA Counterclaim Patents and the patents
`
`asserted in the 932 ITC Investigation begs the question: why did NVIDIA wait so long to bring
`
`its counterclaims in this action? NVIDIA has been asserting allegedly similar patents against
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`Samsung since September 2014. Yet NVIDIA waited more than eight months before filing its
`
`counterclaims. NVIDIA’s only response is that its counterclaims were timely (Opp. at 1-2, 11,
`
`14-15), and that NVIDIA “has the right to choose its own forum” (Opp. at 15). These
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`irrelevancies merely confirm that NVIDIA’s sole purpose in waiting to file its counterclaims was
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`delay and disruption.
`
`NVIDIA’s reference to A&E Products Group L.P. v. Accessory Corp., No. 00 CIV. 7271
`
`(LMM), 2002 WL 1041321 (S.D.N.Y. May 23, 2002), and Nortel Networks Inc. v. Foundry
`
`
`2 Namely, Jeffrey B. Moskal, David C. Tannenbaum, Andrew D. Bowen, Jakob Nebeker, Brett
`W. Coon, Stuart F. Oberman, Ming Siu, and Matthew Gerlach are inventors on the NVIDIA
`Counterclaim Patents but are not named in the patents asserted in the 932 ITC Investigation.
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`6
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`Networks, Inc., No. 01-CV-10442-DPW, 2003 WL 26476584, at *11 (D. Mass. Mar. 24, 2003),
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`is unavailing because of the relationship in those cases between the original claims and the
`
`counterclaims. (Opp. at 10-11.) In both cases, the court refused to sever counterclaims related to
`
`the plaintiff’s enforcement of the asserted patents. In A&E, the antitrust counterclaim arose from
`
`the plaintiff’s allegedly anti-competitive enforcement of the asserted patents. 2002 WL
`
`1041321, at *2. Similarly, in Nortel, the patent misuse, antitrust, and unfair competition claims
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`arose from the plaintiff’s failure to notify the IEEE standards-setting body of the asserted
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`patents. 2003 WL 26476584, at *13. Of course, none of NVIDIA’s patent infringement
`
`counterclaims involve the Samsung Patents.
`
`III. NVIDIA’S COUNTERCLAIM PATENTS ARE DISTINCT FROM SAMSUNG’S
`ASSERTED PATENTS AND RAISE SEPARABLE, PERIPHERAL ISSUES
`
`A.
`
`NVIDIA’s Counterclaim Patents Are Directed Toward Graphics Processing
`and Samsung’s Patents Are Not
`
`NVIDIA’s Counterclaim Patents are all directed at 3D rendering—i.e., how three-
`
`dimensional objects are depicted on a two-dimensional computer screen. As NVIDIA describes
`
`it, the basic 3D rendering problem is how one turns a mesh representing the points on a surface
`
`(left image) into a realistic image (right image). (Ex. 1,3 932 ITC Investigation, NVIDIA
`
`Technology Tutorial Demonstratives; Ex. 2, 932 ITC Investigation, NVIDIA Technology
`
`Tutorial Hearing Tr. dated Feb. 2, 2015, at 23:8-17.)
`
`
`3 All exhibits refer to exhibits to the Declaration of Robert McFarland in Support of Samsung’s
`Motion to Sever NVIDIA’s Patent Infringement Counterclaims.
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`The NVIDIA Counterclaim Patents are all directed toward various stages of the process
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`through which a mesh made up of points, edges, and triangles transforms into the final image
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`displayed by a computer.
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`
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`1) The ’414 Patent is directed to a graphics pipeline implemented on a single
`
`semiconductor platform that is capable of vertex blending (or “skinning”). In
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`vertex blending, the surface of a sharp edge or corner of a 3-D object is adjusted
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`to create a smooth transition surface.
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`2) The ’531 Patent is directed to performing two stages of the rendering process,
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`vertex shading and pixel shading, in the same general part of a GPU. Vertex
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`shading is the process of determining where each portion of a 3-D object appears
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`in an image displayed on a 2-D screen. Pixel shading determines the color and
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`intensity of each pixel that is displayed in the image. The unified sharer
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`architecture in the ’531 Patent performs both vertex and pixel shading in a unified
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`execution pipeline in the GPU.
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`3) The ’590 Patent is directed to a graphics processing system that allows vertex
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`texture processing by accessing vertex texture map data and executing vertex
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`shader programs on such data. Texture mapping is a graphic design process in
`
`which a 2-D surface (a texture map), is “wrapped around” a 3-D object to add
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`graphic detail such as bumps and other surface detail.
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`4) The ’013 Patent is directed to a graphics pipeline system that permits iterative
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`shading and texturing (described above) to render a 3-D image. As described in
`
`the ’013 patent, texture information is retrieved based on a shading calculation,
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`and an additional shading calculation is performed using the texture information.
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`In contrast, none of the Samsung Patents cover graphics processing. The terms “render,”
`
`“pixel,” “vertex,” “shading,” “texture,” and “graphics pipeline” never appear in the Samsung
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`Patents. The term “graphics” only appears twice—and not in relation to graphics processing.
`
`Instead, the Samsung Patents relate to microprocessor design, microprocessor fabrication, and
`
`specific features of consumer electronic devices. Even the Samsung Patents that are asserted
`
`against NVIDIA GPUs do not target the GPUs’ graphics processing functions, as described in
`
`Samsung’s Memorandum in Support of Its Motion to Sever. (Mem. at 7-8.) The Samsung
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`Patents cover (a) the circuit designs on the GPUs (’158, ’938, ’602 Patents), (b) the processes for
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`manufacturing microprocessors (’902 and ’675 Patents), and (c) the GPU’s detection of an
`
`external monitor (ʼ724 Patent). (Id.) There is effectively no overlap in the claimed subject
`
`matter.
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`B.
`
`NVIDIA’s Counterclaim and Samsung’s Patent Claims Share Few Exhibits
`and Witnesses
`
`NVIDIA’s initial disclosures demonstrate that it would be inefficient to try the claims
`
`together. NVIDIA’s initial disclosures identify 88 individuals who may have discoverable
`
`information about Samsung’s claims and NVIDIA’s counterclaims. None of the individuals
`
`identified by NVIDIA have discoverable information about both the NVIDIA Counterclaim
`
`Patents and the Samsung Patents. Only two of 88 individuals appear to have information
`
`relevant to both Samsung’s claims and NVIDIA’s counterclaims. Specifically, NVIDIA claims
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`John Lonergan has knowledge about the “sales and marketing of NVIDIA GPUs” and ARM has
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`knowledge of the “design, operation, and development of” NVIDIA’s accused products and
`
`Samsung’s accused products.” (Ex. 3, NVIDIA’s Initial Disclosures at 4, 8.) Similarly,
`
`NVIDIA’s initial disclosures only identify one category of documents that appear to relate to
`
`both Samsung’s claims and NVIDIA’s counterclaims: “Documents relating to financial
`
`information for NVIDIA used to support its claims or defenses.” (Id. at 15.) Thus by NVIDIA’s
`
`own admission, NVIDIA’s counterclaims and Samsung’s claims share few, if any, witnesses or
`
`documents.
`
`Samsung identified 106 persons likely to have discoverable information related to the
`
`Samsung Patents and 77 persons likely to have discoverable information related to the NVIDIA
`
`Counterclaim Patents. (Ex. 4, Samsung’s Initial Disclosures served Apr. 24, 2015; Ex. 5,
`
`Samsung’s Initial Disclosures Relating to NVIDIA’s Counterclaims, served May 13, 2015.) Of
`
`the 181 unique persons that Samsung identified, only two individuals are likely to have
`
`information relevant to both Samsung’s claims and NVIDIA’s counterclaims: (1) Tae Hyung
`
`Kim, who is likely to have information relative to Samsung’s licensing practices, and
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`(2) employees of ARM, who are likely to have technical information about the Samsung
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`Accused Devices and NVIDIA Accused Devices. (Ex. 4 at 4, 9; Ex. 5 at 4, 10.)
`
`Of course, defendants Old Micro, Inc. f/k/a Velocity Micro, Inc., and Velocity Holdings
`
`(collectively, “Velocity Micro”) are entirely uninvolved in NVIDIA’s patent infringement
`
`counterclaims. Velocity Micro’s initial disclosures do not identify any witnesses or documents
`
`common to Samsung’s claims against Velocity and NVIDIA’s counterclaims against Samsung.
`
`The parties’ initial disclosures confirm that very little of the parties’ pretrial preparations
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`for the Samsung Patents would overlap with the pretrial preparations for the NVIDIA
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`Counterclaim Patents. Almost none of the witnesses that are likely to testify on Samsung’s
`
`claims will testify regarding NVIDIA’s patent infringement counterclaims. Unless the cases are
`
`severed, the jury will have to tackle two entirely different cases: one involving Samsung’s
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`Patents and a completely disjointed case involving NVIDIA’s Counterclaim Patents with
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`completely separate witnesses, products, and technology.
`
`NVIDIA oversimplifies the issues by claiming that the accused products are “primarily
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`GPUs for both Samsung’s claims and NVIDIA’s counterclaims.” (Opp. at 7.) First, the
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`Samsung Patents are directed toward the general circuit design and manufacturing processes that
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`are common to GPUs and other processors and semiconductor chips, while NVIDIA’s
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`Counterclaim Patents are directed toward the specific graphics processing features of the GPU.
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`Second, Samsung accuses a variety of non-GPU products including NVIDIA processers, mobile
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`devices, and laptops that are entirely irrelevant to NVIDIA’s Counterclaim Patents. Third, the
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`fact that a joined action will implicate both Samsung and NVIDIA’s GPUs is more likely to lead
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`to jury confusion rather than any efficiencies. If the cases are joined, NVIDIA may present
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`evidence about how NVIDIA’s GPUs and Samsung’s GPUs practice the NVIDIA Counterclaim
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`Case 3:14-cv-00757-REP-DJN Document 160 Filed 05/18/15 Page 15 of 20 PageID# 15681
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`Patents. A single jury would need to evaluate NVIDIA’s GPUs as practicing NVIDIA’s patents
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`but infringing Samsung’s patents and Samsung’s GPUs as practicing Samsung’s patents but
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`infringing NVIDIA’s patents. Confusion seems nearly inevitable.
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`NVIDIA then attempts to show that its claims are not peripheral by identifying five
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`Samsung and NVIDIA products that allegedly practice the NVIDIA Counterclaim Patents and a
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`Samsung Patent. (Opp. at 8.) NVIDIA’s G80 chip is accused of infringing Samsung’s ʼ902
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`Patent and is allegedly a commercial embodiment of NVIDIA’s Counterclaim Patents. (Id.) But
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`the G80 chip is just one of 181 NVIDIA chips that are asserted in this case. Similarly
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`unconvincing is NVIDIA’s argument that four out of the 284 Samsung products accused in
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`NVIDIA’s counterclaims also practice Samsung’s ʼ158 Patent. (Id.) NVIDIA further fails to
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`specify whether any of these Samsung products are among the “approximately ten”
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`representative products that NVIDIA expects to present at trial. (Opp. at 13-14.) The overlap is
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`small, and NVIDIA’s odds are long.
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`NVIDIA’s counterclaims squarely meet the definition of “peripheral” issues mandating
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`severance under Rule 21. (See Mem. at 8-10); Koh, 250 F. Supp. 2d at 632. Even the two non-
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`binding cases that NVIDIA relies on, Baergas v. City of New York, No. 04CIV2944(BSJ)(HBP),
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`2005 WL 2105550, at *3 (S.D.N.Y. Sept. 1, 2005), and Johnson v. BAE Systems Land &
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`Armaments, L.P., No. 3:12-CV-1790-D, 2014 WL 1714487, at *35-36 (N.D. Tex. Apr. 30,
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`2014), actually support severance in this action. (Opp. at 5-7.) The court in Baergas
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`acknowledged that “[t]he decision whether to grant a severance motion is committed to the
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`sound discretion of the trial court.” Baergas, 2005 WL 2105550, at *3 (citations omitted).
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`Moreover, as explained in Samsung’s opening memorandum, severance is proper under the
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`factors defined in Baergas and Johnson:
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`(1) whether the claims arise out of the same transaction or occurrence, (2) whether
`the claims present common questions of fact or law, (3) whether severance would
`serve judicial economy, (4) prejudice to the parties caused by severance, and
`(5) whether the claims involve different witnesses and evidence.
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`Id. at *4; see also Johnson, 2014 WL 1714487, at *35-36.
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`NVIDIA’s counterclaims are also factually distinguishable from the joined claims in
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`Baergas and Johnson. In Baergas, the court joined a plaintiff’s employment discrimination and
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`civil rights claims because both claims arose from the same occurrence—the plaintiff’s employer
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`falsely accused the plaintiff of theft causing him to be arrested and subsequently terminated.
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`Baergas, 2005 WL 2105550, at *3. Similarly, in Johnson, the court refused to sever the race
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`discrimination claims of four minority plaintiffs because the plaintiffs were terminated at the
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`same time, by the same defendants. Johnson, 2014 WL 1714487, at *36.
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`In contrast, NVIDIA’s counterclaims are entirely peripheral to Samsung’s claims. There
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`are no common questions of fact or law, and there is no risk of duplicitous litigation or
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`inconsistent verdicts if the Court orders separate trials. (See NVIDIA’s Opposition to Samsung’s
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`Motion to Sever (“Opp.”) at 6.) The Court should exercise its discretion to sever those
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`counterclaims because severance will serve the ends of justice and further the prompt and
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`efficient disposition of both actions. See Koh, 250 F. Supp. 2d at 632.
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`IV.
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`IF THE COURT DENIES SEVERANCE, IT SHOULD IMPOSE CERTAIN
`CONDITIONS IN THE INTERESTS OF FAIRNESS AND JUSTICE
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`Severance is the most judicious way of advancing the administration of justice.
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`NVIDIA’s cited case, Thornapple Associates, Inc. v. Izadpanah, No. 1:14CV767 JCC/TRJ, 2014
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`WL 7239018 (E.D. Va. Dec. 17, 2014), confirms that severance—not bifurcation under Rule
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`42—is appropriate. (Opp. at 7.) There, an expert witness filed a breach of contract suit against a
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`litigant for non-payment of the expert’s fees. 2014 WL 7239018, at *1. The litigant filed a
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`third-party complaint against his former attorneys claiming that the attorneys were responsible
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`for part of the unpaid expert witness fees. Id. The court bifurcated the third-party complaint
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`because the third-party claim could not proceed if it were severed. Id. Without a judgment in
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`the original action, the third-party plaintiff lacked standing under Article III of the Constitution
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`to bring suit against his former attorneys. Id. Those concerns are inapplicable here because
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`NVIDIA’s patent infringement counterclaims do not depend on a judgment in Samsung’s
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`original case and may be litigated in an entirely independent action.
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`If, however, the Court denies or stays its decision on severance, the Court should take
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`certain steps to address the concerns raised in Samsung’s Memorandum and as set out below. In
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`particular, if the Court denies Samsung’s motion to sever but bifurcates this action under Rule
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`42, the Court should also (1) order a separate trial on the NVIDIA Counterclaim Patents for no
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`earlier than April, 2016, (2) adopt Samsung’s proposed pretrial schedule for the NVIDIA
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`Counterclaim Patents, and (3) allow the parties to further discuss discovery parameters, which
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`were adopted before NVIDIA asserted its Counterclaim Patents. While separate trials under
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`Rule 42 would address the risk of juror confusion, it would not ease the artificially abbreviated
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`discovery and pretrial schedule created by NVIDIA’s delay in bringing its counterclaims.
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`Adopting Samsung’s proposed pretrial schedule and allowing the parties to address the discovery
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`parameters is necessary to compensate for the harm caused by NVIDIA’s delay tactics.
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`Alternatively, if the Court stays its decision on Samsung’s motion to