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Jury RIMMs DRAM makers in Rambus case

Jury RIMMs DRAM makers in Rambus case

A San Francisco jury has ruled that Rambus did not engage in anti-competitive or fraudulent behaviour when it was a part of JEDEC in the mid-90s - higher memory prices could be one step closer for consumers as royalty charges are passed on.

Memory chip technology developer Rambus has earned a surprising victory in its long-running lawsuit against key DRAM manufacturers for patent infringement.

A San Francisco jury ruled on Wednesday that the company hadn't engaged in fraudulent or anti-competitive behaviour when it was a member of JEDEC in the mid-1990s, where it helped to create the set of standards for what became known as SDRAM.

This will no doubt be a blow for plaintiffs Hynix, Micron and Nanya, who claim that Rambus had deliberately hidden the fact it was seeking patents for a number of technologies that it worked with other board members to establish as industry standards.

The plaintiffs alleged that patenting several memory technologies which are integral parts of industry standards unfairly gave Rambus the right to royalties they believe are 'undeserved'. However, Rambus claimed that JEDEC's disclosure policy did not require members of the council to disclose any patents they held.

"This was an important one for us," said Rambus General Counsel Tom Lavelle in a phone interview with Reuters. "Their attempts to invalidate our patents and find us violative of fraud laws and monopoly laws of the United States have failed."

Micron said that this was one phase in a number of pending cases between Rambus and the DRAM manufacturers and that it planned to appeal the decision. "I think [the jurors] misapprehended what the standards-setting organisations are all about and the absolute need for good faith," added Jared Bobrow, an attorney for Micron.

Rambus stock rose by nearly 40 percent when the news broke – what this will do to the memory market is unclear at the moment, but it's becoming increasingly likely that DRAM manufacturers will have to pay royalties to Rambus in order to stay in business. These will no doubt be passed onto the consumer, as memory manufacturers are already struggling because the memory market is in free-fall at the moment.

Do you think the right side won this particular battle in the war? Let us know your thoughts in the forums.

8 Comments

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D3s3rt_F0x 28th March 2008, 10:42 Quote
Well bad for the other manufacturers and while people may not like what RAMBUS did its good business for themselves.
DXR_13KE 28th March 2008, 12:19 Quote
... and bad business for us...
steveo_mcg 28th March 2008, 12:22 Quote
.... and more than a little under hand...
TreeDude 28th March 2008, 13:38 Quote
At least the patents were filed after a product was created. It's those companies that do nothing but file patents and sue people without any product that piss me off the most.

Though I am glad I got my 4gb DDR2 800 when I did. Only paid $80. Looks like the prices will be on the rise soon.
REH 28th March 2008, 15:14 Quote
Amazing how the big co's can distort the story - here are some of the FACTS from this link: http://rambus.org/legal/

Short version BEFORE the latest 100% win by Rambus (as with EVERY serious legal arena - Rambus has won - invention should and must be protected - the last asset of the US imho):

Real jurors and courts have found Rambus NOT GUILTY!

* Jan 03 RMBS vs IFX: CAFC (nation-wide patent experts) wrote:
"In sum, the district court erred in its construction of each of the disputed terms. In light of the revised claim construction, this court vacates the grant of JMOL of noninfringement and remands for the district court to reconsider infringement." "In sum, substantial evidence does not support the jury's verdict that Rambus breached its duties under the EIA/JEDEC policy. Infineon did not show the first element of a Virginia fraud action and therefore did not prove fraud associated with the SDRAM standard. No reasonable jury could find otherwise. The district court erred in denying JMOL of no fraud on the SDRAM verdict. Because of these holdings, the new trial and injunction issues are moot."
* Oct 03 RMBS vs IFX: Supreme Court (highest court of the U.S.) confirmed the CAFC.
* After 54 days of hearings, 44 live witness records, 1,770 admitted exhibits, 12,000 pages of trial transcript and 3 extensions of time later...
Feb 04 FTC ALJ wrote:
"Complaint Counsel have failed to sustain their burden of proof with respect all three of the violations alleged in the Complaint. A review of the three violations alleged in the Complaint shows that although Respondent is in possession of monopoly power in the relevant markets, Complaint Counsel have failed to demonstrate that Respondent engaged in a pattern of exclusionary, anticompetitive conduct which subverted an open standards process, or that Respondent utilized such conduct to capture an unlawfl monopoly in the technology-related markets. Analyzing the challenged conduct under established principles of economics and antitrust law and utilizing the preponderance of evidence standard, Complaint Counsel have not proven the elements necessary to support a finding of liability."
* On 01/04/2006, after-hours, Judge Whyte issues his ruling on spolation from the October trial. Rambus wins 100%. There was no spoliation, it's a complete victory for Rambus. Or, as the Judge puts it: "Here, the court does not find dismissal to be an appropriate sanction because it does not find the application of the unclean hands doctrine to be warranted. Further, the evidence presented does not bear out Hynix's allegations that Rambus adopted its Document Retention Policy in bad faith. The evidence also does not demonstrate that Rambus targeted any specific document or category of relevant documents with the intent to prevent production in a lawsuit such as the one initiated by Hynix. The evidence here does not show that Rambus destroyed specific, material documents prejudicial to Hynix's ability to defend against Rambus's patent claims. Therefore, Hynix's unclean hands defense fails."
* On 04/24/2006, Monday, the jury decides that Rambus wins $306 million from Hynix. Here's the actual jury verdict form: 37 to 0!
steveo_mcg 28th March 2008, 18:53 Quote
Yeah i'll take those facts with more than a pinch of scepticism given the quoted source.
Tim S 28th March 2008, 19:30 Quote
Rambus has the right to protect its IP, but that doesn't prevent it from being a bit of a coy move - I'm sure this wouldn't have come about had it opened up RDRAM to other manufacturers and RDRAM had prevailed. Price was what killed RDRAM - right the way back to when it was first introduced with the Pentium 3... and then again with the Pentium 4.
mtsugawa 28th March 2008, 20:35 Quote
Quote:
Originally Posted by Tim S
Rambus has the right to protect its IP, but that doesn't prevent it from being a bit of a coy move - I'm sure this wouldn't have come about had it opened up RDRAM to other manufacturers and RDRAM had prevailed. Price was what killed RDRAM - right the way back to when it was first introduced with the Pentium 3... and then again with the Pentium 4.

You realize that the reason for the high price of RDRAM was due to the memory manufacturers' (MM's) joint boycott of RDRAM and subsequent price-fixing of it's competitor, DDR, don't you?

Basically, the MM's realized that RDRAM was both superior in performance and more cost effective. They realized that Intel and Rambus would control the pace of innovation for future memory generations and they would simply become foundries for Intel/Rambus memories. So, what did they do, after learning from Rambus the technical details of RDRAM, they decided to simply steal these ideas and incorporate them into DDR. They got together and put together a joint strategy to kill Rambus and make it's IP public domain. This was a very well thought out strategy.

First, they invited Rambus to join JEDEC (an organization that it completely controlled by the large MM's). They did this under the guise that Rambus would be able to influence the organization to adopt RDRAM as a standard. However, they never allowed Rambus to present it's RDRAM for standardization. They twice refused Rambus's request to present their technology...the only company ever, in the history of JEDEC, to be denied.

Secondly, they all colluded to jointly boycott RDRAM. Worse, they took seed money from Intel ($500M) to develop RDRAM and then used this money to buy a competitor's plant that was already producing RDRAM and then shut it down. They also gave Intel extremely high estimates of the amount of RDRAM that each MM would produce, making Intel believe that there would be ample supply of RDRAM for the 850 motherboard ramp. However, behind the scenes, they were not working on RDRAM at all. Instead, they were cherry picking certain RDRAM technologies and incorporating them into the "JEDEC" standard DDR product.

So, when Intel released the 850 chipset, there was no RDRAM to go with it. This caused the price of RDRAM to skyrocket since there were so many motherboards, but no memory to go with them. At the same time, the MM's were selling their DDR product below cost just to compete with the artificially inflated price of RDRAM.

After they finally got Intel to back away from their RDRAM strategy, then the MM's jointly raised the price of the DDR product. They have all pled guilty to the Department of Justice's price fixing charges.

Another prong in the MM's joint strategy, was to feed misinformation to the media regarding Rambus's performance and manufacturing process. They said the performance was no better than DDR and that there were many problems manufacturing the product. They were able to get their story told since they spent so much on advertising in the various technical rags and blogs.

I'm sure, if you've read this far, you're thinking what kind of conspiracy nut is this guy, "mtsugawa"? Well, everything that I've stated has been well documented and is proven by the MM's own emails and documents. There's far too many links for me to list here, but if you're interested in the investment of a lifetime, I recommend you go to rambus.org to start your research. Another great source is the Investor's Village Rambus message board: http://www.investorvillage.com

Thanks for your time.

Mark (a 10-year Rambus investor)
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