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Monday, 21 January 2008

Rambus in the wars

Last Friday Rambus Inc. failed in its attempt to save most of its patent for a memory-chip design, the validity of which was challenged by Hynix Semiconductor Inc. and Micron Technology Inc. The European Patent Office rejected all but one of Rambus's requests to reinstate patent claims in the case. However, this decision still leaves the Los Altos, California-based company with at least five other European patents related to dynamic random access memory chips.

Rambus, which designs semiconductors, has been embroiled in lawsuits in both Europe and the US with chipmakers Infineon Technologies AG, Micron and Hynix over royalties which Rambus claims they owe for using its patented technology. In March 2005 Infineon agreed to pay as much as $150 million to settle its five-year patent dispute with Rambus.

Litigation continues in the US, where cases involving Hynix, which will address antitrust, unfair competition and fraud claims against Rambus, are scheduled for a trial beginning next week in San Jose, California, Federal Court. A non-jury trial in Wilmington, Delaware, was held in November over antitrust claims filed by Micron against Rambus, on which the judge has yet to rule.

Left: never mind the Rambus, what about the Catbus!

Meanwhile Rambus is appealing against a US Federal Trade Commission finding that it used its patents to exact excessively high licensing fees from the memory-chip industry (arguments are scheduled to be heard on St Valentine's Day, 14 February). In Europe Rambus still faces allegations by EU antitrust regulators that it broke competition rules by seeking "unreasonable royalties" for some memory chips.

Patent royalties are the lifeblood for Rambus, generating $118.3 million, or 85 percent of the company's revenue, in the first nine months of 2007. The EU has claimed that Rambus practised "deceptive conduct" by hiding patents when industry standards were set which allowed the company to claim royalties from rivals. Rambus responded to the EU's allegations at a two-day hearing in Brussels last December (source: Stephanie Bodoni, Bloomberg News).

The IPKat is fascinated at the manner in which Rambus seeks to manipulate the market with its patents, which appear to cover a broad spectrum of validity: the company demonstrates that the interests of the innovator, the developer and the patent troll cannot always be easily separated. Merpel adds, from the point of view of internal corporate governance, how does one prepare an annual budget for a business that must almost by definition spend so much of its income on an expensive activity with an uncertain outcome such as litigation?

Rambus here
Rambo here

1 comment:

Jeremy said...

Steve has emailed the IPKat to say "I am not an EE but many I speak with who were working in this field in late 80's and early 90's think that Rambus technology and patents revolutionized an industry. In the early 90's they had synch memory running at 500MHZ why the rest of the industry was struggling at 33MHZ. Rambus co founder and inventor Mark Horowitz is considered one f the best and brightest in his field. As for a budget the company spends 5-10mm per quarter defending this IP in the hope of capturing a 1-3.5% royalty on the entire DRAM market 30bn+".

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