Power Integrations, Inc. v. On Semiconductor Corporation et al

MOTION to Strike Renewed Motion to Strike Legacy-Fairchild Products from Power Integrations Inc's Counterclaim for Infringement of the '876 Patent

N.D. Cal.August 2, 2018

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF Roger Fulghum (Pro hac vice) roger.fulghum@bakerbotts.com BAKER BOTTS L.L.P. 910 Louisiana Street Houston, TX 77002 Telephone: (713) 229-1234 Facsimile: (713) 229-1522 Colette Reiner Mayer (CA BAR 263630) CRMayer@mofo.com MORRISON & FOERSTER LLP 755 Page Mill Road Palo Alto, California 94304-1018 Telephone: (650) 813-5600 Facsimile: (650) 494-0792 Attorneys for ON SEMICONDUCTOR CORPORATION and SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION POWER INTEGRATIONS, INC., Plaintiff and Counter- Defendant, vs. ON SEMICONDUCTOR CORPORATION AND SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, Defendants and Counter- Claimants. CASE NO. 16-cv-06371-BLF ON SEMICONDUCTOR CORPORATION and SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC’S RENEWED MOTION TO STRIKE LEGACY- FAIRCHILD PRODUCTS FROM POWER INTEGRATIONS, INC.’S COUNTERCLAIM FOR INFRINGEMENT OF THE ’876 PATENT Date: October 11, 2018 Time: 9:00 a.m. The Hon. Beth Labson Freeman CASE NO. 17-cv-03189-BLF ON SEMICONDUCTOR CORPORATION AND SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, Plaintiffs and Counter- Defendants, vs. POWER INTEGRATIONS, INC., Defendant and Counter- Claimants. Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 1 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -i- TABLE OF CONTENTS Page NOTICE OF MOTION ......................................................................................................................1 I. INTRODUCTION ..................................................................................................................1 II. FACTUAL BACKGROUND ...............................................................................................3 III. LEGAL STANDARD ............................................................................................................5 IV. ARGUMENT .........................................................................................................................5 A. ON Adopts PI’s Proposal to Add ON as a Defendant in the 2015 California Case, Resolving PI’s Res Judicata and Party Issues ..................................................5 B. Adding Legacy-Fairchild Products to This Case for One of Fifteen Patents is Impractical, Highly Inefficient, and Will Increase the Burden on Everyone .....................................................................................................................7 C. PI’s Treatment of the ’079 Patent in This Case Belies PI’s Stated Concerns About Res Judicata .....................................................................................................9 V. CONCLUSION ....................................................................................................................10 Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 2 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -ii- TABLE OF AUTHORITIES Page(s) CASES Landis v. North Am. Co., 299 U.S. 248 (1936) .....................................................................................................................6 Nurse v. United States, 226 F.3d 996 (9th Cir. 2000) ........................................................................................................6 Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402 (9th Cir. 2010) ........................................................................................................6 OTHER AUTHORITIES Federal Rule of Civil Procedure 12 ..............................................................................................1, 10 Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 3 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -1- NOTICE OF MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: Please take notice that, on October 11, 2018, at 9:00 a.m., or as soon thereafter as the matter may be heard, Defendants ON Semiconductor Corporation and Semiconductor Components Industries, LLC (collectively “ON”) will and hereby do renew their motion to strike legacy-Fairchild1 products from Power Integrations, Inc.’s (“PI”) counterclaim for infringement of U.S. Patent No. 6,249,876 (“the ’876 patent”). Instead of litigating infringement concerning the same legacy-Fairchild products in two separate cases in this district, ON has consented to and should be added as a defendant in Power Integrations, Inc. v. Fairchild Semiconductor Inc., et al., Case No. 15-cv-04854-MMC (“the 2015 California Case” before Judge Chesney), which resolves the same party issue identified in this Court’s order denying ON’s first motion to strike, renders moot PI’s res judicata concerns, and better serves the interest of judicial economy by preventing redundant claims and burdensome duplication of proceedings. STATEMENT OF RELIEF Pursuant to Federal Rule of Civil Procedure 12(f) and the Court’s inherent authority, ON requests that the Court strike Paragraph 17 of PI’s counterclaim for infringement of the ’876 patent in its entirety and strike the portions of Paragraph 15 of that same counterclaim alleging that legacy-Fairchild products infringe the ’876 patent, including any infringement contentions related to the same. MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In its counterclaim for infringement of the ’876 patent, PI recently added legacy-Fairchild products to this case that were already (and still are) accused of infringing the same patent in another case in this district before Judge Chesney (the 2015 California Case). See Dkt. No. 100 at 21-22. If left unresolved, PI’s repetitious pleadings will cause and lead to duplicative discovery, 1 The corporations Fairchild Semiconductor International, Inc., Fairchild Semiconductor Corporation, and Fairchild (Taiwan) Corporation are collectively referred to herein as “Fairchild.” Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 4 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -2- depositions, and trial testimony from the same engineers, designers, salespeople, and other Fairchild employees about the same products in both cases, who otherwise would not need to testify or be produced in this case. This duplication presents an undue burden on both courts and all parties. For that reason, ON moved to strike PI’s counterclaim on March 13, 2018. Dkt. 117. Although the Court recognized “the potential increase in judicial economy were the legacy- Fairchild products to be litigated in one action,” the Court denied ON’s first motion to strike on June 14, citing PI’s concern that striking legacy-Fairchild products from this case may prejudice PI because ON is not a party to the 2015 California Case. Dkt. 151 at 8. The Court’s order explained that its “denial is without prejudice to ON’s ability to renew its request provided that the same party issue regarding ON and Fairchild is resolved.” Id. The Court also expressed the need for additional information about the corporate relationship between ON and Fairchild. Id. at 6. With this renewed motion, ON provides that information together with its binding representations that resolve any concerns regarding res judicata. ON could and should be added as a defendant to the 2015 California Case, and ON is subject to mandatory joinder. In that case, PI is seeking a permanent injunction barring all sales of the accused products. In seeking that remedy, PI would be best served by joining ON as a party to the 2015 California Case because, as a result of reorganizations in ON’s sales operations following its acquisition of Fairchild in 2016, the named Fairchild defendants no longer sell the legacy- Fairchild products accused of infringement. ON has already committed before Judge Chesney that it will not oppose ON’s joinder in the 2015 California Case, and ON makes the same representation to this Court. ON’s joinder will resolve not only the pleading issues in the 2015 California Case, but also the same party and res judicata issue related to the resolution of ON’s first motion to strike. Having consented to the resolution of that issue, ON respectfully submits that the interest of judicial economy, practical case management considerations, and the risk of juror confusion compel limiting the scope of this case to legacy-ON products for the reasons set forth below and in ON’s first motion to strike (Dkt. 117). The Court should strike PI’s counterclaim for infringement of the ’876 patent with respect to legacy-Fairchild products. Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 5 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -3- II. FACTUAL BACKGROUND 2 At the time of their respective filings (and until recently), this case and the 2015 California Case were each directed to either legacy-ON products or legacy-Fairchild products. With its counterclaim on the ’876 patent, however, PI expanded the scope of this case to include the same legacy-Fairchild products at issue in the 2015 California Case. Dkt. 117 at 5-8; Ex. A, April 27, 2018 hearing transcript, 13:11-14 (“I am satisfied that the [2015 California Case] does address the very products and the claims that are readdressed” in this case). ON moved to strike this duplication, which will otherwise waste judicial resources, inconvenience witnesses, and result in unnecessarily burdensome discovery. In opposition to ON’s first motion to strike, PI argued that, because ON is not a party to the 2015 California Case, PI may lose rights due to res judicata if the claim against ON for legacy-Fairchild products is not adjudicated in this case. See id. at 16:11-18. The Court suggested that PI’s concerns could be most easily resolved through a stipulation, either before or after the Court’s ruling on ON’s first motion to strike. Id. at 15:24-16:9, 17:2-4. In response, PI suggested that “ON could be added to [the 2015 California Case] explicitly, which would be an easier way to deal with this to make sure there are no problems with claims.” Id. at 17:2-4. The Court agreed, observing that the simplest solution may be for the parties “to work out an agreement that Power Integrations will amend the 2015 [California] action to add ON” and that ON will not object to that amendment. Id. at 17:22-18:1. ON also agreed at the hearing that ON would not “raise any corporate issues with regard to [the 2015 California Case.]” Id. at 15:12-13. The Court ordered the parties to meet and confer on that issue and submit a joint statement by May 11. On April 30, ON provided a proposed stipulation to PI to resolve PI’s res judicata concern. (See Ex. B to Dkt. 141). In response, PI did not engage in substantive discussions about the stipulation, asserting without explanation that “ON’s proposal does not address our concerns, and we believe the best approach is to consolidate the claims directed to the ’876 patent going forward 2 The procedural histories of this case and the 2015 California Case are set forth in greater detail in ON’s first motion to strike (Dkt. 117 at 2-6) and the Court’s order on that motion (Dkt. 151 at 2-3). Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 6 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -4- . . . .” Id. The parties stated their respective positions in the joint statement filed May 11 (Dkt. 141), and on June 14 the Court denied without prejudice ON’s first motion to strike (Dkt. 117), explaining that its “denial is without prejudice to ON’s ability to renew its request provided that the same party issue regarding ON and Fairchild is resolved.” Dkt. 151 at 8. Since this Court’s order, ON has attempted to proceed with the Court’s proposed solution to join ON as a party to the 2015 California Case, despite PI’s refusal to engage. More specifically, on June 29, 2018, two weeks after the Court denied ON’s motion to strike, ON and Fairchild represented in a Joint Status Report to Judge Chesney that “ON Semiconductor would not oppose a motion by PI to add ON Semiconductor to this case.” (Ex. B, 2015 California Case, Dkt. 93 at 5-6.) With this motion and the concurrently filed Declaration of Robert Tuttle, Vice President and Chief IP Counsel for ON Semiconductor Corporation, ON makes the same binding representation to this Court that it will not oppose joinder. With these commitments on the record in both cases, PI’s res judicata concerns are easily avoided. On July 20, PI filed a motion in the 2015 California Case to transfer PI’s claims on the ’876 patent (along with the Fairchild defendants) to this Court. (Ex. C, 2015 California Case, Dkt. 95). PI’s motion in the 2015 California Case, however, would leave PI’s claims for infringement of the ‘079 patent on the same products in that court, thereby fracturing PI’s case against Fairchild products into two. As explained below, because PI’s motion would separate the ’876 and ’079 patent claims in the 2015 California Case, it would only exacerbate inefficiencies by splitting between cases the legacy-Fairchild products accused of infringing both patents, which will necessitate the same duplication of discovery and expense. Furthermore, although PI claims it is necessary to assert the ’876 patent against legacy-Fairchild products and transfer those claims to this case to avoid res judicata, PI curiously accuses only legacy-ON products of infringing the ’079 patent in this case. PI has not attempted to address parallel res judicata issues raised by the’079 patent, and PI is apparently content to proceed on those claims “as is” in the 2015 California Case despite the seemingly identical risk and without ON being at party to that case. In any event, ON will oppose PI’s motion in the 2015 California Case, and ON is filing this motion so that all claims on legacy-Fairchild products can proceed in the 2015 California Case. Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 7 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -5- III. LEGAL STANDARD Federal Rule of Civil Procedure 12(f)(1) permits a court, on its own, to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The decision to strike a portion of a party’s pleading is within the sound discretion of the court. Nurse v. United States, 226 F.3d 996, 1000 (9th Cir. 2000). Moreover, a court has inherent power “to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254 (1936); see also Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402, 404 (9th Cir. 2010). Use of inherent power “calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.” Landis, 299 U.S. at 254-255. IV. ARGUMENT A. ON Adopts PI’s Proposal to Add ON as a Defendant in the 2015 California Case, Resolving PI’s Res Judicata and Party Issues The only solution for PI’s duplicative pleadings is to join ON as a party in the 2015 California case and to strike the counterclaims against the legacy-Fairchild products from this case. Both parties and this Court have previously agreed that joinder would solve the problem. Since then, ON and Fairchild have represented in the 2015 California Case that they would not oppose joinder. With this motion and the concurrently filed Declaration of Robert Tuttle, ON hereby makes the same binding representation to this Court that it will not oppose joinder. ON is a necessary party subject to mandatory joinder in the 2015 California Case. Under Rule 19 of the Federal Rules of Civil Procedure, ON “must be joined as a party” if, in ON’s absence, “the court cannot accord complete relief among existing parties.” See FRCP 19(a)(1)(A). In the 2015 California Case, PI seeks injunctive relief that can only be obtained if ON is joined as a party. More specifically, PI’s complaint in the 2015 California Case requests “a permanent injunction preventing Defendants and their officers, directors, agents, servants, employees, attorneys, licensees, successors, assigns, and customers, and those in active concert or participation with any of them, from [infringing] any claim of the ’079 or ’876 patents or contributing to or inducing the same by others.” (Ex. B to Dkt 117 at 10). As explained in Mr. Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 8 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -6- Tuttle’s Declaration, none of the Fairchild entities named as defendants in the 2015 California Case currently sell in the United States the legacy-Fairchild products that are accused of infringing both the ’876 and ’079 patents in that case. Declaration of Robert Tuttle in Support of ON’s Renewed Motion to Strike (“Tuttle Decl.”) Ex. D at ¶ 4. To award the injunctive relief requested by PI, ON can and should be added as a necessary party. PI previously confirmed its intent to add ON as a party to the 2015 California Case, and PI also recently agreed with this Court that such a solution would resolve its res judicata concerns in this case. On August 19, 2016, after ON had announced its proposed acquisition of Fairchild but before the transaction had closed, PI informed Judge Chesney: “Power Integrations expects to add ON Semiconductor as a defendant in this [2015 California] case.” Ex. E, 2015 California Case, Case Management Statement at Dkt. No. 66 at 3. And at the April 27 hearing in this case, PI suggested that “ON could be added to [the 2015 California Case] explicitly, which would be an easier way to deal with this to make sure there are no problems with claims.” Ex. A, 17:2-4. The Court agreed. Id. at 17:22-24 (Court: “Another way of handling this is that you could, maybe the simpl[est] thing is for you to work out an agreement that Power Integrations will amend the 2015 action to add ON.”). ON does not oppose being added as a defendant in the 2015 California Case. In a recent Joint Status Report in the 2015 California case, ON and Fairchild made this unambiguously clear: “ON Semiconductor would not oppose a motion by PI to add ON Semiconductor to this case.” (Ex. C, 2015 California Court, Dkt. 93 at 5-6.) ON hereby makes the same binding representation in this case. ON agrees to join the stayed 2015 California Case as a defendant, whether that joinder is accomplished through an unopposed motion brought by PI or as part of a joint motion brought by all parties. To further resolve any issue that PI may have concerning preclusion of PI’s claims on the ’876 patent against legacy-Fairchild products, ON further submits and agrees that no defendant will raise any defense in the 2015 California Case based on an argument that the proper subsidiaries of ON Semiconductor Corporation are not named as defendants. Ex. D at ¶ 5. By adding ON Semiconductor Corporation and Semiconductor Components Industries LLC as defendants in the 2015 California Case, the proper parties will be named in that case. As Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 9 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -7- Mr. Tuttle explains in his Declaration, ON Semiconductor Corporation is the ultimate parent of the ON corporate family. Id. at ¶ 2. Semiconductor Components Industries, LLC is a wholly- owned direct subsidiary of ON Semiconductor Corporation. Id. Upon closing of ON’s acquisition of Fairchild on September 19, 2016, the defendants in the 2015 California Case became wholly- owned direct or indirect subsidiaries of ON Semiconductor Corporation. Id. at ¶ 3. ON has since reorganized its sales operations such that each ON-related entity that has sold the accused legacy- Fairchild products since September 19, 2016, is either a defendant in the 2015 California Case or another wholly-owned subsidiary of ON Semiconductor Corporation. Id. at ¶ 4. None of the named defendants in the 2015 California Case, however, currently sells in the United States any accused legacy-Fairchild products. Id. Accordingly, joinder of ON to the 2015 California Case will resolve the perceived res judicata concerns and allow PI to pursue its claims against legacy-Fairchild products in full in that case alone. ON further submits that — even in the absence of ON’s stipulation to be named as a defendant in the 2015 California Case — PI’s res judicata concern is misplaced and should not impact the Court’s analysis of ON’s motion. PI’s res judicata concern arises from PI’s belief that a counterclaim for infringement of the ’876 patent based on legacy-Fairchild products is compulsory in this case, even though Rule 13(a) includes an exception to the compulsory counterclaim rule for preexisting claims: The pleader need not state the claim if: . . . when the action was commenced, the claim was the subject of another pending action; Fed. R. Civ. P. 13(a)(2)(A). Because PI’s pleading in the 2015 California Court already includes the same legacy-Fairchild products, PI’s counterclaims are “the subject of another pending action” and not compulsory in this case. There is no risk of waiver, as confirmed by PI’s disparate treatment of the asserted ‘876 and ‘079 patents in this case. See infra Section IV.C. B. Adding Legacy-Fairchild Products to This Case for One of Fifteen Patents is Impractical, Highly Inefficient, and Will Increase the Burden on Everyone Neither party believes the status quo makes sense, but PI’s proposal to transfer the ’876 patent claims to this case perpetuates the same judicial economy problem the Court noted in its Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 10 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -8- prior order. Dkt. 151 at 8. As this case and the 2015 California Case are currently framed, two courts and two juries will adjudicate claims of infringement of the same patent based on the same products. As the Court noted at the outset of the April 27 hearing, ON’s motion to strike is attempting to narrow the scope of this case, which is already large. Ex. A at 4:1-3. In contrast, PI’s motion in the 2015 California Case seeks to sever and transfer three additional parties and yet another claim from Judge Chesney’s court to this Court. Moreover, PI’s motion creates new inefficiencies for both courts and all parties. Moreover, in the 2015 California Case, PI accuses the same set of legacy-Fairchild products of infringing both the ’079 and ’876 patents. Specifically, all but one of the products alleged to infringe the ’876 patent in PI’s First Amended Complaint are also accused of infringing the ’079 patent. Compare Ex. B to Dkt 117 ¶ 19 with ¶ 32. The legacy-Fairchild products accused of infringing the ’876 and ’079 patents are products that were developed and sold by Fairchild before it was acquired by ON. In comparison to the legacy-ON products at issue in this case, they were designed and developed by different engineers, in different locations, for different companies, and they have significant structural and operational differences. The witnesses and documents concerning legacy-Fairchild products are Fairchild witnesses and Fairchild documents, while the witnesses and documents concerning legacy-ON products are ON witnesses and ON documents. Accordingly, the evidence required for claims directed to legacy-Fairchild products is independent of the evidence required for claims directed to every other accused product in this case. Adding legacy-Fairchild products to this case expands its scope significantly. As it currently stands, the nearly complete overlap between the products accused of infringing the ’079 and ’876 patents is a source of convenience and judicial economy in the 2015 California Case, where the products are contained within one case. But if PI’s motion to sever and transfer is granted, and if ON’s renewed motion to strike is not granted, then the legacy-Fairchild products will be split between the two cases. Under this scenario, those legacy-Fairchild products will not only be imported into this case for the ’876 patent, but they will still be litigated in Judge Chesney’s court as part of PI’s claims regarding the ’079 patent. In other words, PI’s proposal would still require both courts and two different juries to consider and adjudicate evidence and Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 11 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -9- claims concerning the same legacy-Fairchild products. PI’s proposal to leave the claim on the ‘079 patent concerning legacy-Fairchild products in the 2015 California Case will perpetuate the same redundancies and inefficiencies as PI’s inclusion of legacy-Fairchild products in its counterclaim on the ’876 patent. In contrast, ON’s requested relief would eliminate those inefficiencies and let the two cases proceed as they were originally framed by PI itself, in parallel, with non-overlapping products. PI’s proposal to transfer the ’876 claims against Fairchild into this case will also confuse the jury and unduly prejudice both ON and Fairchild. With legacy-Fairchild products in this case, the jury will be asked to consider, with respect to only one of fifteen patents, a different company, different products, and different evidence than for every other patent in this case. There is no need for the Court, the parties, and the jury in this case to be burdened in this way. There is no need for the jury in this case to hear evidence concerning who Fairchild is, the extensive patent litigation history between PI and Fairchild, or how Fairchild relates to ON. And there is no doubt that PI will attempt to inject into this lawsuit a whole host of past history regarding Fairchild and PI’s previous litigation campaigns. The risk of juror confusion and prejudice to ON is unwarranted and easily avoidable. Striking PI’s claim for infringement of the ’876 patent with respect to legacy-Fairchild products will cause no prejudice to PI, particularly in view of ON’s stipulation to be added as a defendant in the 2015 California Case. PI chose to bring its claims for both of the ‘876 and ‘079 patents on the legacy-Fairchild products in the 2015 California Case. PI may pursue that claim in full in the 2015 California Case, and this case should proceed and concern only legacy-ON products. C. PI’s Treatment of the ’079 Patent in This Case Belies PI’s Stated Concerns About Res Judicata and Judicial Efficiency PI’s disparate treatment of the ’876 and ’079 patents undermines PI’s stated concerns about res judicata and demonstrates that PI’s motivation is to gain a strategic advantage by separating its claims against the legacy-Fairchild products across two lawsuits. If a counterclaim based on legacy-Fairchild products is compulsory in this case with respect to the ’876 patent, the same must be true for the ’079 patent. PI asserts the ‘876 and ’079 patents in both cases. But PI Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 12 of 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 07536-00002/9553699.6 ON SEMICONDUCTOR’S MOT. TO STRIKE LEGACY-FAIRCHILD PRODUCTS FROM ’876 COUNTERCLAIM Case Nos. 16-cv-06371-BLF and 17-cv-03189-BLF -10- inexplicably does not accuse legacy-Fairchild products of infringing the ’079 patent in this case, and PI’s claim on the ‘079 patent based on legacy-Fairchild products is proceeding exclusively in the 2015 California Case. Although PI only accuses legacy-ON products of infringing the ’079 patent in this case, PI has never voiced a concern regarding waiver of its claims against ON as to legacy-Fairchild products. PI’s disparate treatment of the ’079 patent thus belies PI’s stated concerns about res judicata. Moreover, if (as PI argues) judicial efficiency is best served by litigating all of PI’s claims concerning the ‘876 patent against both ON and Fairchild in a single lawsuit, the same would be true for the ‘079 patent. But, unlike its claim on the ‘876 patent, PI does not seek to transfer its claim on the ‘079 patent from the 2015 California Case to this Court. PI’s disparate treatment of the ‘079 patent thus also undermines its judicial efficiency argument. V. CONCLUSION ON respectfully requests that, under Federal Rule of Civil Procedure 12(f) and/or pursuant to the Court’s inherent authority, the Court strike Paragraph 17 of PI’s counterclaim for infringement of the ’876 patent in its entirety and strike the portions of Paragraph 15 of that same counterclaim alleging that legacy-Fairchild products infringe the ’876 patent, including any infringement contentions directed to those same products. DATED: August 2, 2018 Respectfully submitted, By /s/ Roger Fulghum Roger Fulghum Case 5:16-cv-06371-BLF Document 167 Filed 08/02/18 Page 13 of 13