Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-02133/USCOURTS-cand-4_05-cv-02133-4/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SUMITOMO MITSUBISHI SILICON

CORPORATION, et al.,

Plaintiffs,

 v.

MEMC ELECTRONIC MATERIALS, INC.,

Defendant.

 /

No. C 05-2133 SBA

(Related to Case No. C 01-4925)

ORDER

[Docket No. 63]

This matter comes before the Court on MEMC Electronic Materials, Inc.'s Motion for Separate Trial

and Deferred Discovery [Docket No. 63]. Having read and considered the papers presented by the parties,

the Court finds this matter appropriate for dispositionwithout a hearing. The Court hereby DENIES MEMC

Electronic Materials, Inc.'s Motion for Separate Trial and Deferred Discovery. 

BACKGROUND

On July 13, 2004, Plaintiffs Sumitomo MitsubishiSiliconCorporation and SUMCO USA Corporation

(collectively, "SUMCO") filed suit in the United States District Court for the District of Delaware against

MEMC Electronic Materials, Inc. ("MEMC" or "Defendant"). 

On October 5, 2004, SUMCO filed a First Amended Complaint against MEMC. In the First

Amended Complaint, SUMCO allegesthatMEMC has engaged in certain anti-competitive conduct, including

but not limited to: (a) accumulating a large number of patents for the purpose of creating an all-encompassing

anti-competitive patent domain; (b) intentionally failing to disclose material prior art to the United States Patent

and Trademark Office ("PTO"); (c) enforcing United States Patent No. 5,919,302 (the "'302 Patent") in bad

faith;and (d) threatening to file additionalseriatim patent infringementsuits with respect to otherMEMC patents

that emanate fromthe '302 Patent. The following causes of action are asserted against MEMC: (1) Attempted

Monopolization; (2) Declaratory Judgment ofPatent Non-Infringement; (3) Declaratory Judgement of Patent

Invalidity; (4) Declaratory Judgment of Patent Unenforceability; and (5) Patent Misuse. 

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On March 31, 2005, the Delaware Court granted MEMC's Motion to Transfer. The case was

subsequently transferred to this district pursuant to 28 U.S.C. § 1404(a). 

On October 24, 2005, MEMC filed the instant Motion for Separate Trial and Deferred Discovery on

SUMCO's Claim of Attempted Monopolization.

LEGAL STANDARD

Federal Rule of Civil Procedure 42(b) provides in relevant part:

The court, in furtherance of convenience or to avoid prejudice, or when separate

trials will be conducive to expedition and economy, may order a separate trialof any

claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of

any number of claims, cross-claims, counterclaims, third-party claims, or issues,

always preserving inviolate the right of trial by jury as declared by the Seventh

Amendment to the Constitution or as given by a statute of the United States.

Fed. R. Civ. P. 42(b). 

In deciding whether separate trials will best serve the convenience of the parties and the court, avoid

prejudice, and minimize expense and delay, "the major consideration is directed toward the choice most likely

to result in a just final disposition of the litigation." See In re Innotron Diagnostics, 800 F.2d 1077, 1084

(Fed. Cir. 1986) (quoting 9 C. Wright & A. Miller, Federal Practice and Procedure, § 2388 (1971)).

Bifurcation is not an abuse of discretion if interests favor such separation and the issues are clearly separable.

Angelo v. Armstrong World Indus., 11 F.3d 957, 964 (10th Cir. 1993). "Regardless of efficiency and

separability, however, bifurcation is an abuse of discretion if it is unfair or prejudicial to a party." Id.

In addition to having the discretion to bifurcate issues for trial, the district court also has broad

discretion to controlthe course ofdiscovery. National Independent TheatreExhibitors,Inc. v.BuenaVista

Distrib. Co., 748 F.2d 602, 609 (11th Cir. 1985). Even when bifurcation of issues for trial is appropriate,

a stay ofdiscovery may be denied if the stay would result in unnecessary inefficiency. Accord Dentsply Int'l,

Inc. v. New Tech. Co., 1996 U.S. Dist. LEXIS 19846 * 6 (D. Del. 1996). 

ANALYSIS

In its Motion for Separate Trial and Deferred Discovery, MEMC asks the Court to enter an order

setting the trial on SUMCO's patent claims to occur separate and apart from, and prior to, the trial on

SUMCO's antitrust claim. MEMC also requests that the Court order a stay on all discovery relating to

SUMCO's antitrust claim until SUMCO's patent claims are resolved. MEMC contends that its Motion is

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1The '302 Patent is at issue in Case No. C 01-04925 SBA, which is set for trial in March 2006. 

Several dispositive motions are also scheduled to be heard by this Court in Case No. C 01-04925 in

January 2006. 

2

 This argument is not purely speculative, as SUMCO identifies witnesses and evidence that may be

lost in the event of a delay. Specifically, a former Vice President of MEMC, John DeLuca, has recently

retired from MEMC. Additionally, the Texas Pacific Group, the entity that acquired a majority interest in

MEMC in 2000, has announced that it will be selling its remaining stock interest in MEMC in 2006. 

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warranted under Federal Rule of Civil Procedure 42(b) because bifurcation of the patent and antitrust issues

would further the interests of judicial economy. Specifically, MEMC argues that SUMCO's antitrust claim is

wholly dependent upon its ability to prove the patent claims asserted in the Amended Complaint, as well as its

ability to successfully defend against certain patent claims being asserted by MEMC against SUMCO in

another related case1 currently pending before this Court. Thus, according to MEMC, permitting the parties

to resolve the "less complex" patent issuesfirst would potentially obviate the need for the parties and the Court

to spend time on "exhaustive additional discovery, [and] costly economic analysis" relating to SUMCO's

antitrust claim. 

SUMCO vigorously opposes MEMC's Motion and the Court finds its arguments to be persuasive.

First and foremost, SUMCO notes that, should MEMC prevail on its Motion, the earliest date SUMCO could

even start any discovery on its antitrust claim would be the end of2007, and thus the trialon the antitrust claim

would be delayed until at least 2008. Such a delay would decidedly not further the interests of judicial

economy or provide for an efficient resolution ofthis case. See, e.g., Vitronic Corp. v. Conceptronic, Inc.,

1993 WL 300882 *2 (D.N.H. 1993) ("The court is not persuaded that a second phase of discovery and trial

on a claim whichwill nonetheless require resolution independent fromthatrequired forinfringement liability will

result in the most efficient just final disposition of the litigation."). A delay would also unfairly prejudice

SUMCO because, as SUMCO points out, it could result in the loss or spoliation of evidence.2 Additionally,

SUMCO notes that there are numerous witnesses who are likely to be witnesses to both the patent issues and

the antitrust issues. Given that some of these witnesses reside in Japan and Korea, it would be far less

burdensome on both the witnesses and the parties for the parties to depose the witnesses on all of the issues

at the same time. Accord THK America, Inc. v. Nippon SeikoK.K., 141 F.R.D. 463, 465 (N.D. Ill. 1991)

(noting that bifurcationwould impose a twofold increase in expenses for both parties due to the fact thatmany

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witnesses were located in Japan). Further, allowing discovery to proceed on all of the claims asserted in the

Amended Complaint would significantly reduce the potential for time-consuming and expensive discovery

disputes as to whether the particular discovery is directed toward the patent or the antitrust claims. Accord

Dentsply, 1996 U.S. Dist. LEXIS 19846 at * 6. Last, the prospect of settlement is more likely to be enhanced

– rather than hindered – byfull and unified discovery because it will allow the parties to become better informed

about the strengths and weaknesses of their respective positions on the entire case. 

Significantly, MEMC does notrespond to any ofthe argumentssetforth in SUMCO's opposition brief,

but instead persistently clings to its belief that pursuit of the antitrust claim at this juncture is an unnecessary

waste oftime and resources because once the patent claims are resolved,SUMCO's antitrust claim necessarily

fails. This argument, however, does not compel the conclusion that the Court should bifurcate the antitrust and

patent claims at this stage in the litigation. Indeed, the opposite is true. Since many of the issues relating to the

'302 Patent may be resolved after the completion of Case No. C 01-04295 SBA in March 2006, or could be

resolved upon summary judgment in this case, the parties will have ample opportunity to appropriately narrow

the issues prior to trial. However, if, at the time of trial, it appears that it would be most efficient and

expeditious to try the claims separately, MEMC is hereby granted leave to re-file its motion for a bifurcated

trial. Thus, for the above stated reasons, the Court hereby DENIES the Motion for Deferred Discovery WITH

PREJUDICE and DENIES the Motion for Separate Trial WITHOUT PREJUDICE. 

CONCLUSION

IT IS HEREBY ORDERED THAT MEMC's Motion for Separate Trial and Deferred Discovery

[Docket No. 63] is DENIED. The request for deferred discovery is DENIED WITH PREJUDICE. The

request for a separate trial is DENIED WITHOUT PREJUDICE. 

IT IS FURTHER ORDERED THAT the December 6, 2005 Case Management Conference is

VACATED. The parties shall appear for a telephonic Case Management Conference on Wednesday,

January 25, 2006 at 3:00 p.m. The parties shall meet and conferpriorto the conference and shall prepare

a joint Case Management Conference Statement which shall be filed no later than ten (10) days prior to the

Case Management Conference. Plaintiffs shall be responsible for filing the statement as well as for arranging

the conference call. All parties shall be on the line and shall call (510) 637-3559 at the above indicated date

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and time. 

IT IS SO ORDERED.

 

Dated: 12/5/05 SAUNDRA BROWN ARMSTRONG

United States District Judge

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