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Two years ago, a Virginia judge tore Rambus to pieces for allegedly shredding documents while preparing to sue rivals for patent infringement. On Tuesday, the U.S. Court of Appeals for the Federal Circuit discarded Judge Robert Payne’s cutting 116-page order written during a patent fight between the Los Altos, Calif., chip licensing company and Samsung in Eastern Virginia U.S. District Court. Without going to the merits of the shredding allegations, the three-judge panel wrote that Payne didn’t have the jurisdiction to issue the order criticizing the company’s legal tactics. That’s because Rambus had already offered to pay Samsung’s attorney fees, effectively putting an end to the district court case, they reasoned. “We are pleased with this decision, as it ends a years-long debate and further clears the field to focus on the real issue of the ongoing patent infringement of Samsung and the other DRAM manufacturers,” said Thomas Lavelle, general counsel for Rambus, in a company press release. Lawyers from Weil Gotshal & Manges representing Samsung did not return phone calls seeking comment. Richard Taranto of Washington, D.C.-based Farr & Taranto argued the case for Rambus, which was also represented by three other firms. The ruling may not bury the shredding issue for good for Rambus. In a dispute in Delaware federal court with rival Micron Technology, lawyers are fighting in post-trial motions over when Rambus had a duty to start preserving documents. “The post-trial motion is not in any way based on or any way dependent on Judge Payne’s opinion,” said Robert Becher, a Quinn Emanuel Urquhart Oliver & Hedges partner representing Micron. “I don’t think that this decision is going to have any impact on the oral arguments or our position, particularly in that it was based on a jurisdictional issue.” Rambus originally sued Samsung for infringing on four of its patents in 2005 in California. Samsung then filed for declaratory judgment in the Eastern District of Virginia, seeking to invalidate the patents. Following a motion by Samsung for attorney fees, Payne denied the motion but issued his lengthy order highly critical of Rambus’ legal tactics. Payne stated it is “quite clear” that Rambus purposely shredded millions of pages of documents in the late 1990s as it was preparing to sue a slew of its rivals for infringing one of its chip design patents. The subject of shredding had come up in previous Rambus litigation. In an earlier patent infringement action against Infineon Technologies, Payne had ruled Rambus’ shredding prevented the company from prosecuting its claims, given the doctrine of “unclean hands.” Rambus promptly settled that case for $150 million � before Payne’s ruling could be published and become binding on other courts. Payne’s San Jose judicial colleague Ronald Whyte had also dealt with the issue, and ruled that Rambus did not have unclean hands in a case against Hynix. The appeals court found Tuesday that because Rambus had offered to pay the full amount of Samsung’s attorney fees (an offer that Samsung had rejected to pursue its motion), the case “became moot.” “The district court had no case or controversy to continue to consider,” Judge Randall Rader wrote for the panel in Samsung Electronics Co. v. Rambus Inc., 06-1579. “Thus, the trial court lacked subject matter jurisdiction to perpetuate an attorney fees dispute that was complete.” Rader was joined by Judge Alvin Schall and U.S. District Judge Joseph Farnan Jr., sitting by designation. The appellate panel vacated the order and remanded the case to the district court with instructions that the case be dismissed. The appellate ruling comes as Rambus, a frequent courtroom visitor, is enjoying a string of victories. In March, a San Jose federal jury rejected claims by a group of chip makers that Rambus violated antitrust laws. Last week, the same appeals court threw out a Federal Trade Commission ruling that accused Rambus of similar violations. That’s not to say that the litigation doesn’t have its costs. Although general litigation expenses dipped $2.9 million from the fourth quarter of 2007, Rambus spent $13.2 million in the first quarter of 2008, according to the company. This article originally appeared in The Recorder, a publication of ALM. �

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