ALJ Gildea Grants Renewed Motion To Terminate Investigation As To Nanya Respondents In Certain Dynamic Random Access Memory And NAND Flash Memory Devices (337-TA-803)
On July 10, 2012, ALJ E. James Gildea issued the public version of Order No. 58 in Certain Dynamic Random Access Memory and NAND Flash Memory Devices and Products Containing Same (Inv. No. 337-TA-803). In the Order, ALJ Gildea granted Respondents Nanya Technology Corporation and Nanya Technology Corporation, USA (collectively, “Nanya”) and Complainants Intellectual Ventures Management, LLC, Invention Investment Fund I, L.P., Invention Investment Fund II, LLC, Intellectual Ventures I LLC, and Intellectual Ventures II LLC’s (collectively, “Complainants”) renewed motion to terminate Nanya from the investigation on the basis of a settlement agreement.
On December 19, 2011, Nanya and Complainants filed their original motion to terminate after Nanya, Complainants, and nonparty IV International Licensing Netherlands B.V. (“IV Netherlands”) executed several license and settlement agreements resolving the dispute between the parties. ALJ Gildea, however, denied the parties motion on public interest grounds and because Nanya and Complainants failed to sufficiently explain the circumstances surrounding their unusual settlement agreement. See our March 27, 2012 post for further details regarding Order No. 25 denying movants’ original motion to terminate.
On March 28, 2012, Nanya and Complainants filed a renewed motion, which provided additional explanations regarding the parties rationale for creating a complex and indirect settlement agreement. The parties also addressed the ALJ’s concern that the license agreement between Nanya and IV Netherlands was structured to avoid the payment of U.S. Taxes. In particular, Nanya and Complainants provided the ALJ with various documents (the substance of which was redacted from the public version of the order) establishing that the “additional layer of nonparty foreign entities involved in the Nanya settlement” will have a de minimis impact on the payment of U.S. taxes on any settlement monies.
On April 9, 2012, Respondents Hynix Semiconductor America, Inc. and Hynix Semiconductor Inc. (collectively, “Hynix”) filed an opposition to the renewed motion, arguing that the nonparty entities involved in the settlement may not have the right to license the asserted patents and, thus, that “movants have not established that the settlement agreement is ‘legally effective.’” In response, ALJ Gildea requested further briefing from Complainants concerning the transfer of rights to the asserted patents. According to the Order, Complainants’ response (which was redacted from the public version of the order) failed to mitigate the ALJ’s concerns and ALJ Gildea requested that Complainants submit a sworn affidavit establishing the nonparty entities right to license the asserted patents. After reviewing Complainants’ submission, ALJ Gildea determined that any doubts raised by Hynix with respect to the Nanya settlement were removed and granted Complainants and Nanya’s renewed motion to terminate.