Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-mc-80024/USCOURTS-cand-5_06-mc-80024-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: Civil Miscellaneous Case

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

TESSERA, INC.,

Plaintiff,

 v.

MICRON TECHNOLOGY, INC., MICRON

SEMICONDUCTOR PRODUCTS, INC.,

INFINEON TECHNOLOGIES AG, INFINEON

TECHNOLOGIES RICHMOND, LP and

INFINEON TECHNOLOGIES NORTH

AMERICA CORP.,

Defendants.

 ____/

Case No. C-06-80024-MISC-JW (PVT)

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF'S

MOTION TO COMPEL PRODUCTION

OF DOCUMENTS FROM NON-PARTY

HYNIX SEMICONDUCTOR AMERICA,

INC.

[Docket Nos. 1 -17]

INTRODUCTION

Plaintiff Tessera, Inc. ("Plaintiff") moves to compel production of documents from

non-party Hynix Semiconductor America, Inc. ("Hynix Semiconductor America"). Nonparty Hynix Semiconductor America opposes the motion. On March 21, 2006, the parties

appeared for hearing. Having reviewed the papers and considered the arguments of counsel

and for the reasons set forth below, the court grants in part and denies in part plaintiff

Tessera's motion to compel production of documents from non-party Hynix Semiconductor

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1 The holding of this court is limited to the facts and the particular circumstances underlying the present

motion.

2 Unlike other dynamic random access memory chips ("DRAM"), the RDRAM version developed by

Rambus incorporated new circuitry and packaging technology. Initially, DRAM chips were developed to respond to the

increased need for semiconductor memory technology used in personal computers, servers and other devices. 

2

America.1

BACKGROUND

Plaintiff Tessera develops semiconductor packaging technology. Semiconductor

packaging serves many purposes, including acting as the electrical interface between

semiconductor chips and circuit boards and protecting semiconductor chips from damage,

contamination and stress. Tessera holds more than 300 patents for semiconductor packaging

technology which it licenses to various semiconductor manufacturing companies throughout

the world. 

In the early 1990s, Tessera developed certain semiconductor packaging technology to

package the synchronous dynamic random access memory chip developed by Rambus, Inc. in

or around the same time period ("RDRAM").2 The synchronous RDRAM chip was

apparently a revolutionary innovation in microprocessor architectural technology because it

allowed for performance of more complex and faster operations and outpaced other circuitry

technology available at that time. Indeed, Intel adopted the synchronous RDRAM chip as

next generation memory technology for its microprocessors in 1996. In 1998, reference

design for the synchronous RDRAM included Tessera's semiconductor packaging

technology. A reference design sets forth the assembly instructions for the synchronous

RDRAM to semiconductor manufacturers. Therefore, Tessera's semiconductor packaging

technology became a necessary component in the manufacture of synchronous RDRAM

chips.

Plaintiff Tessera licenses its semiconductor packaging technology directly to

semiconductor manufacturers (not Rambus itself). Typically, licensing agreements require

the semiconductor manufacturers to pay Tessera royalties on the volume of synchcronous

RDRAM chips sold which uses its semiconductor packaging technology. 

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3 The information filed by the U.S. Department of Justice alleged that from on or about April 1, 1999 to on

or about June 15, 2002, Hynix Semiconductor Industries, Inc. and others participated in a conspiracy in the United States

and elsewhere to suppress and eliminate competition by fixing the prices of DRAM chips to be sold to certain original

equipment manufacturers of personal computers and servers. For purposes of the plea agreement, the conspiracy related to

dynamic random access memory semiconductor devices and modules, including synchronous dynamic random access memory

and double data rate dynamic random access memory semiconductor devices and modules, but not Rambus dynamic random

access memory semiconductor devices and modules. 

3

On April 13, 2005, plaintiff Tessera filed an amended complaint against defendants

Micron Technology, Inc., Micron Semiconductor Products, Inc., Infineon Technologies AG,

Infineon Technologies Richmond, LP and Infineon Technologies North America Corporation

in U.S. District Court in the Eastern District of Texas. By its complaint, plaintiff Tessera

alleges, inter alia, patent infringement, antitrust violations and various state law claims. 

Defendants are semiconductor manufacturers. Plaintiff Tessera complains that defendants

unlawfully colluded with others to boycott the synchronous RDRAM chip. The effect of the

boycott was to reduce supply and increase the price for whatever synchronous RDRAM chips

were produced. Plaintiff Tessera alleges that defendants conspired to boycott the

synchronous RDRAM chips to reduce demand for them and artificially inflate the price of

pre-existing and inferior DRAM chips for their own financial gain. Defendants' actions even

caused Intel to abandon exclusive use of synchronous RDRAM chips in its microprocessors. 

Plaintiff Tessera alleges that defendants' actions deprived the company of significant

royalties.

Prior to the filing of plaintiff Tessera's complaint, the Federal Trade Commission

("FTC") had undertaken an investigation and found that semiconductor manufacturers,

including Infineon Technologies AG, Infineon Technologies Richmond, LP and Infineon

Technologies North America Corporation (the "Infineon companies"), Micron Technologies,

Inc., Micron Semiconductor Products, Inc. (the "Micron companies") and Hynix

Semiconductor Industries, Inc. ("Hynix, Inc."), had colluded to boycott and impact the

market price of DRAM chips. The U.S. Department of Justice also had undertaken such an

investigation. On May 11, 2005, Hynix, Inc. pleaded guilty to an information charging a

violation of the Sherman Antitrust Act and was fined $185 million.3

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4 Non-party Hynix Semiconductor America did not seek court approval prior to filing its sur-reply.

Generally, leave of the court is necessary to file a sur-reply. "[O]nce a reply is filed, no additional memoranda, papers or

letters may be filed without prior Court approval." Civ. L.R. 7-3(d). On March 9, 2006, non-party Hynix Semiconductor

America notified the court it had withdrawn the sur-reply. 

4

Notwithstanding the above, various semiconductor manufacturers eventually came to

incorporate Tessera's semiconductor packaging technology in the manufacture of newer

generation DRAM chips. Hynix, Inc. and Samsung, which are two of the largest

semiconductor manufacturers, currently license Tessera's technology. As part of its license,

Hynix, Inc. currently makes back payments to plaintiff Tessera for DRAM chips which

previously had used its semiconductor packaging technology.

On October 14, 2005, U.S. District Court Judge Leonard Davis, presiding in the

underlying litigation, granted defendants' partial motion to dismiss on the grounds that

plaintiff Tessera had not met the standing requirements to bring an antitrust suit ("October

14, 2005 Order"). Specifically, plaintiff Tessera must show that as a licensor in the

semiconductor chip market, it was a target of defendants' conspiracy. 

On September 27, 2005, plaintiff Tessera served non-party Hynix Semiconductor

America with a subpoena duces tecum seeking production of documents. On January 27,

2006, plaintiff Tessera filed a motion to compel documents. On February 28, 2006, Hynix

Semiconductor filed an opposition to the motion to compel. On March 7, 2006, plaintiff

Tessera filed a reply. On March 8, 2006, non-party Hynix Semiconductor America filed a

sur-reply.4 Pursuant to stipulation and order, non-party Hynix Semiconductor America filed

a sur-reply on March 13, 2006. On March 14, 2006, plaintiff Tessera filed further response

to the sur-reply. 

STANDARD

A party may serve a subpoena to obtain discovery from a non-party. Fed. R. Civ. P.

45. The Advisory Committee Notes further state that a non-party subject to a subpoena is

required to produce materials in its control, which may or may not be located within the

district or territory that the subpoena has been served. Fed. R. Civ. P. 45 advisory committee

notes on 1991 amendments. A non-party is subject to the same scope of discovery as a party

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served with Rule 34 requests. Id. See also, Fed R. Civ. P. 45 advisory committee notes on

1970 amendments ("scope of discovery through a subpoena is the same as that applicable to

Rule 34 and other discovery rules."). Under Rule 34, the rule governing the production of

documents between parties, the proper scope of discovery is as specified in Rule 26(b). 

Under the Federal Rules of Civil Procedure,

[p]arties may obtain discovery regarding any matter, not

privileged, that is relevant to the claim or defense of any party . . .

. relevant information need not be admissible at the trial if the

discovery appears reasonably calculated to lead to the discovery

of admissible evidence.

Fed. R. Civ. P. 26(b)(1). Relevancy, for the purposes of discovery, is defined broadly,

although it is not without "ultimate and necessary boundaries." Pacific Gas and Elec. Co. v.

Lynch, Case No. C-01-3023 VRW, 2002 WL 32812098, at *1 (N.D. Cal. August 19, 2002)

(citing Hickman v. Taylor, 329 U.S. 495, 507 (1947)). 

A court, however, has discretion to limit discovery if:

(i) the discovery sought is unreasonably cumulative or duplicative, or is

obtainable from some other source that is more convenient, less

burdensome, or less expensive;

(ii) the party seeking discovery has had ample opportunity by discovery in

the action to obtain the information sought; or

(iii) the burden or expense of the proposed discovery outweighs its likely

benefit, taking into account the needs of the case, the amount in controversy, the parties'

resources, the importance of the issues at stake in the litigation, and the importance of the

proposed discovery in resolving the issues.

Fed. R. Civ. P. 26(b)(2). "A party or an attorney responsible for the issuance and service of a

subpoena shall take reasonable steps to avoid imposing undue burden or expense on a person

subject to that subpoena." Fed. R. Civ. P. 45(c)(1). 

DISCUSSION

Plaintiff Tessera moves to compel production of documents from non-party Hynix

Semiconductor America on the grounds that the documents requested are relevant, that the

documents sought from Hynix, Inc. are within the control of its U.S. subsidiary Hynix

Semiconductor America and that the documents sought are within three narrowly tailored

categories.

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A. Documents Subpoenaed are Relevant

Hynix, Inc. is a Korean company and parent to U.S. subsidiary, Hynix Semiconductor

America. Because Hynix, Inc. participated in the price fixing conspiracy with various

semiconductor manufacturers, plaintiff Tessera alleges that Hynix Semiconductor America

has documents especially relevant to the underlying litigation. Plaintiff Tessera seeks

documents from Hynix, Inc. and Hynix Semiconductor America and "each of their

successors, predecessors and related entities, including subsidiaries, parent corporations,

divisions, officers, directors, employees, agents, representatives, attorneys and anyone acting

on their behalf." (collectively the "Hynix Semiconductor companies"). Specifically, plaintiff

Tessera seeks documents responsive to the following document requests: (1) documents

already produced in other cases involving the same issues in Tessera's case against Micron

Technology, Inc. and the Infineon companies; (2) documents relating to Tessera and its

technology; and (3) communications relating to packaging technology used in DRAM

products. 

Non-party Hynix Semiconductor America challenges the relevance of the requested

documents on the grounds that the Korean parent company pleaded guilty to an antitrust

violation that was unrelated to the synchronous dynamic random access memory chip

developed by Rambus. Indeed, the plea agreement specifically excluded RDRAM chips. 

The claims set forth in the complaint filed in the underlying litigation relate to price fixing of

RDRAM chips only. Therefore, Hynix Semiconductor America rejects any attempt by

plaintiff Tessera to suggest the documents requested are relevant because the Hynix

Semiconductor companies participated in claims of price fixing for the DRAM chips. 

As the Hynix Semiconductor companies were semiconductor manufacturers of

DRAM chips during the relevant time period, currently license plaintiff Tessera's

semiconductor packaging technology and are making back payments for prior use of such

technology and have been involved in numerous governmental investigations, patent and

antitrust litigation matters which involved defendants Micron and Infineon, the documents

requested are relevant to the claims set forth in plaintiff Tessera's complaint.

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1. Hynix Semiconductor America Does Not Have Control Over All

Documents in Possession of its Parent Company, Hynix

Semiconductor Industries, Inc.

Plaintiff Tessera argues that non-party Hynix Semiconductor America is required to

produce responsive documents from parent company, Hynix, Inc., which are in its

"possession, custody or control." Plaintiff Tessera argues that Hynix Semiconductor

America controls documents even in the possession of Hynix, Inc. because it has the legal

right to obtain such documents on demand. Though the Ninth Circuit has not specifically

defined what constitutes a "legal right" to obtain documents "on demand," plaintiff Tessera

argues that the language is not to be narrowly interpreted. Rather the inquiry should be

factual and case specific. In support of its position, plaintiff Tessera cites to cases where

courts have found that a subsidiary may have control of documents in possession of the

parent company. For example, courts have determined that a subsidiary controls documents

in possession of the parent company when counsel for the subsidiary has admitted access to

documents in possession of the parent company or when the subsidiary can obtain documents

in possession of the parent company in the ordinary course of business. See, e.g., Hunter

Douglas, Inc v. Comfotex Corp., No. M8-85 (WHP), 1999 U.S. Dist. LEXIS 101 (S.D.N.Y.

Jan. 11, 1999) and Camden Iron & Metal, Inc. v. Marubeni America Corp., 138 F.R.D. 438

(D.N.J. 1991).

In Choice-Intersil Microsystems, Inc. v. Agere Sys., 224 F.R.D. 471 (N.D. Cal. 2004)

the court compelled the production of documents from a non-party that was the whollyowned U.S. subsidiary of a German parent company. Plaintiff Choice-Intersil alleged claims

of breach of contract and trade secret misappropriation related to a wireless medium access

controller chip ("WMAC"). Despite arguments that the U.S. subsidiary and the German

parent company were distinct entities and that the U.S. subsidiary did not have control of

documents in possession of the German parent company, the court found that the U.S.

company was a wholly-owned subsidiary of the German parent company, that

notwithstanding changes in market conditions, the U.S. subsidiary would have marketed the 

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WMAC in North America, that the U.S. subsidiary and the German parent company shared

databases for documents and records and that the U.S. subsidiary was able to obtain

documents from the German parent company related to the marketing of the WMAC chip

upon demand. Based on the ability of the U.S. subsidiary to obtain high-level marketing

documents related to WMAC from the German parent company, the court concluded the U.S.

subsidiary also had control over technical documents related to WMAC also in possession of

the German parent company.

Here, plaintiff Tessera argues that Hynix Semiconductor America has access to

documents from its Korean parent company. First, during the parties' efforts to meet and

confer, counsel for Hynix Semiconductor America admitted that it has the ability to produce

documents which originated from the Korean parent company. Second, documents

originating from the parent company already would have been produced in response to

preceding litigation, including the FTC and U.S. Department of Justice investigations. 

Moreover, the Korean parent company and the U.S. subsidiary share the same U.S. counsel

in whose offices such documents are likely stored. 

Hynix Semiconductor America also has the ability to obtain documents from Hynix,

Inc. in the ordinary course of business. Plaintiff Tessera points to the Hynix website which

states that non-party Hynix Semiconductor America forms part of a global sales network for

the sales, marketing and distribution of Hynix products in the United States. Additionally,

the website reflects that Hynix Semiconductor America is involved in the research and

development of, inter alia, advanced packaging technology. Finally, Hynix, Inc. exercises

significant control over its U.S. subsidiary. The Korean parent company owns 96.7 percent

of non-party Hynix Semiconductor America and the two companies have overlapping

directors. Of the three board of directors for the U.S. subsidiary, two overlap with the

Korean parent company. The CEO and Chairman of the Board for Hynix, Inc. is also a

director on the board of the U.S. subsidiary. 

In opposition, non-party Hynix Semiconductor America disputes that it controls

documents in possession of the Korean parent company. Instead, Hynix Semiconductor

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In a December 7, 2005 letter, counsel for Hynix Semiconductor America stated that "[a]s a compromise

. . . , we would be willing to produce to Tessera documents originating from [Hynix, Inc.] which have already been produced,

whether in response to discovery or through other agreements, within the litigations referenced in your letter, provided these

documents contain the search terms discussed below. I want to stress that we do not believe we are legally required to

produce these documents under the subpoena, but are offering to produce these documents in the spirit of compromise."

Declaration of Keith L. Slenkovich in Support of Non-party Hynix Semiconductor America, Inc.'s Opposition to Plaintiff

Tessera's Motion to Compel Production of Documents Pursuant to Subpoena to Hynix Semiconductor America, Inc.

(Slenkovich Decl."), Exh. D. 

9

America explains that during efforts to meet and confer on discovery issues, counsel offered

to produce a limited set of documents which originated from the Korean parent company and

was previously produced in Rambus-related litigation.5 Hynix Semiconductor America

contends such an offer fails to demonstrate that it has access to any and all documents in

possession of its Korean parent company and therefore, plaintiff Tessera has not met its

burden in showing the U.S. subsidiary controls documents in possession of the parent

company. Non-party Hynix Semiconductor America distinguishes the Choice-Intersil case

by arguing that the court compelled production of documents, which was very narrow in

scope. There, the court ordered production of documents for the marketing and technical

development of a specific product because the U.S. subsidiary was to become the North

American distributor for that product and therefore, the U.S. subsidiary had access to those

specific-type documents from the parent company. 

"Control is defined as the legal right to obtain documents upon demand." United

States v. International Union of Petroleum and Indus. Workers, AFL-CIO, 870 F.2d 1450,

1452 (9th Cir, 1989). "The party seeking production of the documents bears the burden of

proving that the opposing party has such control." Id.

Aside from documents from the Korean parent company which are already in

possession of the U.S. subsidiary as a result of preceding governmental investigations,

antitrust and patent litigation, plaintiff Tessera has not shown that Hynix Semiconductor

America has the legal right to obtain other documents from Hynix, Inc. upon demand. 

Although the Korean parent company owns 96.7 percent of the U.S. subsidiary, the Hynix

Semiconductor companies form a global sales, marketing and distribution network, the Hynix

Semiconductor companies have undertaken joint efforts in research and development of

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advanced packaging technology, the Hynix Semiconductor companies have overlapping

directors and share counsel, there is no specific showing that Hynix Semiconductor America

has the legal right to obtain any of the documents set forth in the document requests upon

demand. In Choice-Intersil v. Agere, supra, 224 F.R.D. at 472, the court found that the U.S.

subsidiary had specific access to certain documents in possession of the German parent

company. Plaintiff Tessera makes no showing that Hynix Semiconductor America shares

any document databases with its Korean parent company or that Hynix Semiconductor

America can obtain documents related to DRAM, RDRAM or Tessera semiconductor

packaging technology from its Korean parent company upon demand. To the extent, the two

entities share the same counsel, their counsel alone could have sought documents

independently from each of the respective entities to respond to FTC and U.S. Department of

Justice investigations and other antitrust and patent related matters. Moreover, it appears the

pre-existing database of relevant documents was collected in response to litigation matters

and not obtained by the U.S. subsidiary from the parent company in the ordinary course of

business. That the Hynix Semiconductor companies form a global network or jointly

undertake research and development efforts in advanced packaging technology does not

mean that the U.S. subsidiary is wholly-owned or controlled by the parent. See, e.g., U.S. v.

Int'l Union of Petroleum and Indus. Workers, AFL-CIO, 870 F.2d 1450, 1453-1454 ("Control

must be firmly placed in reality, not in an esoteric concept such as 'inherent relationship.'")

and In re Legato Systems, Inc., 204 F.R.D. 167 (N.D. Ca. 2001) (defendant compelled to

produce his testimony before the SEC because defendant was entitled to request the

transcript and such request would only be denied for "good cause."). Therefore, the duty by

Hynix Semiconductor America to produce documents from its Korean parent company is

limited to existing electronic databases containing documents already in its possession (or

that of their counsel).

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B. Burden of Subpoena to Non-Party Hynix Semiconductor America

1. Scope of the Document Requests

Plaintiff Tessera contends it has subpoenaed documents from Hynix Semiconductor

America in three narrowly tailored categories. Non-party Hynix Semiconductor America

asserts that the document requests are overbroad and burdensome.

a. Document Request No. 1

Document Request No. 1:

All documents produced in antitrust-related legal proceedings, including the

FTC investigation entitled In the Matter of Rambus Incorporated, Docket No. 9302,

the DOJ investigation of Hynix's anticompetitive conduct in the DRAM industry, In re

Dynamic Random Access Memory (DRAM) Antitrust Litigation, Docket No. 02-cv01486 filed in the Northern District of California, and Coordinated DRAM Cases,

Judicial Council Coordination proceeding No. 4265 filed in the California Superior

Court, San Francisco County.

Response to Document Request No. 1:

Hynix Semiconductor America objects to this request on the grounds

that it is overbroad, burdensome, and not relevant to the matters at issue in the

litigation in this case. In addition to seeking many millions of pages of

documents originating from numerous parties, almost all of which are subject

to various forms of protective order, HSA is informed and believes that under

the state of current proceedings at issue in the present litigation, the only

documents which relate to the threshold issue of antitrust standing for Tessera

are documents that specifically relate to Tessera. Specifically, the Court in this

matter recently ruled that "Tessera's only remaining avenue for its antitrust

claims is to show that as a licensor to the chip market, it was the target of the

Defendants' conspiracy." For Tessera to impose on a third party the enormous

burden suggested by this overly broad request under these circumstances would

be disproportionately burdensome and oppressive. HSA is willing to meet and

confer with Tessera to appropriately limit the scope of this request so that it is

limited to the issues in the case and does not impose an undue burden on HSA. 

Any document produced must be governed by an appropriate protective order.

Plaintiff Tessera asserts the first document request is narrowly tailored because it

seeks documents related to the FTC and U.S. Department of Justice investigations of the

DRAM industry and any related civil actions. Documents from preceding litigation may be

relevant in showing the nature and breadth of the conspiracy in the underlying litigation by

defendants and third-parties, such as the Hynix Semiconductor companies. Specifically,

plaintiff Tessera considers the documents relevant to issues in the case, including the scope

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of the semiconductor manufacturers' conspiracy to manipulate the DRAM market,

semiconductor manufacturers' attempts to boycott RDRAM and the semiconductor

manufacturers exchange of technical information to avoid payments of significant royalties to

companies such as Rambus and Tessera.

Non-party Hynix Semiconductor America objects to the request on the grounds that it

is overbroad and burdensome. Hynix Semiconductor America complains that the request

encompasses "thousands of documents" and to seek documents produced in "any antitrustrelated legal proceeding" is overbroad. Moreover, Hynix Semiconductor complains that the

request has not been narrowed to specify whether it must produce responsive documents in

"any antitrust-related legal proceeding" in which it was a party, witness and/or non-party. 

Hynix Semiconductor America further complains that it possesses thousands of pages of

documents that even originated from other parties and subject to various forms of protective

order. 

In reply, plaintiff Tessera asserts that Hynix Semiconductor America need merely

produce existing electronic databases of documents on DVD-ROMS or hard drives to

respond to the subpoena. Plaintiff Tessera further asserts that Hynix Semiconductor America

needlessly delayed its response by failing to agree to a list of search terms proffered during

the parties' meet and confer. For example, Hynix Semiconductor America would not agree to

include defendants Micron companies and Infineon companies on the list of proposed search

terms. Plaintiff Tessera also asserts that the U.S. Department of Justice investigation

included the RDRAM chip and whether or not Hynix, Inc. pleaded guilty to an antitrust

violation that excluded RDRAM does not make the document request not relevant. Finally,

plaintiff Tessera explains it only seeks documents produced by Hynix Semiconductor

companies in which it was a party in preceding "antitrust-related" legal proceedings. 

As an initial matter, plaintiff Tessera is not limited to seeking documents related to

establishing antitrust standing in the underlying litigation. During efforts to meet and confer

which spanned from early September 2005 through late January 2006, the parties discussed a

proposed list of search terms to run through electronic document databases created by the

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6 The court was surprised that during the hearing plaintiff Tessera admitted that it had not thoroughly

reviewed the 5,200 documents previously produced by non-party Hynix Semiconductor America. Hynix Semiconductor

America stated that a portion of the documents already produced contain some FTC documents. In light of the looming

discovery deadline, the court will allow production of documents from the FTC investigation despite plaintiff Tessera's

admitted failure to thoroughly review all documents already produced by non-party Hynix Semiconductor America. 

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Hynix Semiconductor companies for preceding governmental investigations, related antitrust

and patent litigation. Plaintiff Tessera proposed the following list of search terms: Tessera,

packaging, package, packages, ball grid array, chip scale package, chip scale packaging,

BGA, CSP, compliant, compliant layer, patent, Micron and Infineon. Hynix Semiconductor

companies later agreed to the proposed list of search terms except for "patent," "Micron" and

"Infineon." Plaintiff Tessera later rejected non-party Hynix Semiconductor America's

counter-proposal and brought this motion to compel. Following the filing of its motion to

compel, plaintiff Tessera sought further compromise by requesting that the proposed search

term list include the terms RDRAM and Rambus. In turn, non-party Hynix Semiconductor

America rejected the counter-counter-proposal. Hynix Semiconductor America complained

that including "RDRAM" and "Rambus" to the proposed list of search terms yielded 150,000

document "hits," which consists of approximately 2.2 million pages. 

Accordingly, non-party Hynix Semiconductor America shall produce on DVD-ROMS

or hard drives documents derived using specific search terms from databases created for the

U.S. Department of Justice investigation of the DRAM industry and any related preceding

litigation in which the Hynix Semiconductor companies were a party. The following search

terms shall be run through electronic document databases for production to plaintiff Tessera:

Tessera, packaging, package, packages, ball grid array, chip scale package, chip scale

packaging, BGA, CSP, compliant, compliant layer, RDRAM, Micron and Infineon. Because

Hynix Semiconductor America has stated that the electronic document database for the FTC

investigation of the DRAM industry cannot be electronically searched (beyond the "re" line),

Hynix Semiconductor America shall produce the entire electronic document database from

that investigation on hard drive or DVD-ROM subject to the following conditions.6 Hynix

Semiconductor America shall notify relevant third parties that documents subject to

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protective order have been or will be produced to plaintiff Tessera. In an effort however to

avoid any undue burden on non-party Hynix Semiconductor America, plaintiff Tessera shall

assume responsibility to review the documents produced on DVD-ROMS and/or hard drives

for responsiveness and obtain permission from any third parties for permission to use such

documents. The DVD-ROMS and/or hard drives and all documents contained therein

(regardless of their responsiveness to document request no. 1) shall be designated

"Confidential-Outside Attorney Eyes Only" pursuant to the stipulated protective order

negotiated between the parties in this motion and in the underlying litigation. Plaintiff

Tessera shall assume the burden to challenge the designation of any documents produced by

Hynix Semiconductor America. As discussed above, production of documents from the

Korean parent company is limited to documents which preexisted on electronic databases

from preceding litigation. 

b. Document Request No. 2

Document Request No. 2:

All documents, including internal communications and communications with

third-parties, concerning Tessera or Tessera technology.

Response to Document Request No. 2:

Hynix Semiconductor America ("HSA") objects to this request on the

grounds that it is vague and ambiguous in its use of the terms 'concerning

Tessera,' causing HSA to speculate as to what documents are sought. HSA is

willing to meet and confer with Tessera to appropriately limit the scope of this

request so that it is limited to the issues in the case and does not impose an

undue burden on HSA. Any documents produced must be governed by an

appropriate protective order.

As set forth in Judge Davis's July 13, 2005 Order, plaintiff Tessera must allege certain

facts as a licensor in the chip market to establish antitrust standing. Therefore, plaintiff

Tessera contends it seeks documents identified in this document request to determine

whether the Hynix Semiconductor companies may have had communications with others to

conspire to target licensors in the chip market, including Tessera and its technology.

Non-Party Hynix Semiconductor complains that the second document request is vague

and ambiguous because the term "Tessera technology" is undefined in the subpoena. Hynix

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Semiconductor America contends that it is willing to produce documents concerning Tessera

only.

In reply, Tessera asserts that Hynix Semiconductor America's objections are baseless. 

Tessera states that during efforts to meet and confer, it provided further elaboration as to the

meaning of "Tessera technology." Tessera explains that its technology is known by certain

trademarks and that the Hynix Semiconductor companies have licensed Tessera's technology

and some of its employees have received specific training toward its implementation. 

Based on Hynix Semiconductor America's agreement to produce responsive documents

relating to Tessera and the ensuing clarification from plaintiff regarding the meaning of its

technology, the motion to compel production of documents to document request no. 2 is

granted. As discussed above, production of documents from the Korean parent company is

limited to documents which preexisted on electronic databases from preceding litigation. 

c. Document Request No. 3

Document Request No. 3:

All communications and presentations, including internal communications and

presentations and those with third-parties, relating to packaging technology used in or

considered for use in DRAM, including SDRAM, RDRAM, DDR, DDR2 and DDR3.

Response to Document Request No. 3:

Hynix Semiconductor America ("HSA") objects to this request on the grounds

that it is overbroad, burdensome, and not relevant to the matters at issue in the

litigation in this case. In consideration of the foregoing general and specific

objections, HSA will produce no documents pursuant to this request. HSA is willing

to meet and confer with Tessera to appropriately limit the scope of this request so that

it is limited to the issues in the case and does not impose an undue burden on HSA. 

Any document produced must be governed by an appropriate protective order.

Plaintiff Tessera argues that it seeks documents identified in the third document

request for the same reasons it seeks documents identified in the second document request. 

The documents sought may be relevant to establishing plaintiff Tessera's antitrust standing in

the underlying litigation. Communications between the Hynix Semiconductor companies and

others relating to semiconductor packaging technology may show that plaintiff Tessera

and/or it technology was targeted by the defendants Micron companies and Infineon

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7 During the hearing, plaintiff Tessera stated for the first time that it would agree to limit production of

documents responsive to document request no. 3 to certain third parties, including JEDEC, SLDRAM, Inc., Advanced DRAM

Technology, Synclink Consortium and Counsel for Computing Power. However, this modification was not previously

discussed in the moving papers, the reply or plaintiff's response to the sur-reply. 

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companies.

Hynix Semiconductor America objects to the document request on the grounds that it

is overbroad, burdensome and not relevant. Additionally, plaintiff Tessera has placed no

time limitation on the breadth of the request. Hynix Semiconductor America asserts that the

request involves potentially millions of pages of documents because the request is not limited

by time, by type of packaging, by identifying third parties, by generation or by type of

DRAM.

In reply, plaintiff Tessera states that the Hynix Semiconductor companies'

communications with others relating to packaging technology in DRAM chips may show

preferences for certain packaging technology. The communications between the Hynix

Semiconductor companies and others may show that defendants in the underlying litigation

chose certain packaging technology for anticompetitive reasons.

As production in response to document request no. 3 may involve millions of pages of

documents, the court finds the request constitutes an undue burden on non-party Hynix

Semiconductor America. Moreover, documents produced in document request no. 2 would

show if there were efforts by defendants in the underlying litigation to choose certain

packaging technology rather than Tessera's packaging technology for anticompetitive

reasons. For the reasons stated by plaintiff Tessera in seeking documents responsive to

document request no. 3, it is also duplicative. Therefore, plaintiff's motion to compel

production of documents in response to document request no. 3 is denied without prejudice.7

2. Costs Incurred by Non-party Hynix Semiconductor America

Finally, non-party Hynix Semiconductor America argues that the document requests

are unduly burdensome. Despite non-party Hynix Semiconductor America's extensive efforts

to meet and confer and determine the scope of the subpoena duces tecum, the burden and

attendant cost of such a large scale document production has been significant. Non-party

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Hynix Semiconductor America has collected, reviewed and designated more than 100,000

pages of documents for production. Moreover, non-party Hynix Semiconductor America has

incurred costs of more than $70,000. Therefore, non-party Hynix Semiconductor America

seeks reimbursement for its costs.

"[A]n order to compel production shall protect any person who is not a party or an

officer of a party from significant expense resulting from the inspection and copying

commanded." Fed. R. Civ. P. 45(c)(2)(B). In determining whether to award costs to a nonparty, the court considers factors, including the scope of the request, the invasiveness of the

request, the need to separate privileged material, the non-party's financial interest in the

litigation, whether the party seeking production of documents ultimately prevails, the relative

resources of the party and the non-party, the reasonableness of the costs sought and the

public importance of the litigation. William W. Schwarzer, A. Wallace Tashima, James M.

Wagstaffe, Federal Civil Procedure Before Trial, 11:2308-2309. Generally, attorneys' fees

and overhead costs are not permitted. Id.

Because non-party Hynix Semiconductor America may incur significant costs in

producing documents responsive to the subpoena duces tecum, an award to cover such costs

may be appropriate. As Hynix Semiconductor America has not completed production, and

the extent of the total costs incurred is not available, the court is not prepared to rule on the

merits of such a motion at this time. Hynix Semiconductor America may bring a motion at a

later date seeking award of such costs. 

CONCLUSION

For the foregoing reasons, Plaintiff's motion to compel production of documents from

non-party Hynix Semiconductor America is granted in part and denied in part.

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8 Non-party Hynix Semiconductor America's production of documents is subject to a stipulated protective

order. See, Stipulated Protective Order Regarding Documents Produced Pursuant to Subpoena to Hynix Semiconductor

America, Inc. signed by U.S. Magistrate Judge John D. Love, Eastern District of Texas, on March 6, 2006 ("March 6, 2006

Order"). The March 6, 2006 Order incorporates by reference the term and protections of the July 29, 2005 stipulated

protective order in the underlying action. Declaration of Trevor V. Stockinger In Support of Tessera, Inc.'s Response to Surreply to Tessera's Motion to Compel Production of Documents Pursuant to Subpoena to Hynix Semiconductor America, Inc.

("Stockinger Suppl. Decl."), Exhs. 17 and 18.

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Hynix Semiconductor America shall produce documents within fifteen (15) days of the date

of this order.8

IT IS SO ORDERED.

Dated: 3/22/2006 

PATRICIA V. TRUMBULL

United States Magistrate Judge 

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