Rambus Won Infineon Appeal. No Royalties, but also No Fines

by Anton Shilov
01/30/2003 | 03:26 PM

It seems that Rambus received an additional chance to sue the memory manufacturers and force them to pay royalties for the technologies implemented into DDR and SDR SDRAM memory chips they manufacture and sell. The United States Court of Appeals for the Federal Circuit reversed rulings from a Virginia trial court that found Rambus liable for fraud associated with standard-setting activities on two computer memory technologies. In 2001 the Virginia trial court issued an injunction against Rambus and awarded Infineon attorney $7 million fees. As Rambus was not found guilty of fraud now, according to the most-recent ruling both companies will cover their legal expenses by their own.

Virginia trial court found in 2001 Rambus liable for fraud because the company did not disclosed all their patents during the JEDEC meetings it attended in early nineties.<%BANNER[article]%>

The decision was favourable for Rambus, as the judge decided that the JEDEC did not really make a lot of efforts in order to force every involved company to “lay all the cards on the table”, to disclose all their patents and applications. According to the Judge Prost, the language of the JEDEC’s policy statements actually does not impose any direct duty on members. While the policy language advises JEDEC as a whole to avoid standards “calling for the use of” a patent and the manual obligates the chairperson to remind members to inform the meeting of any patents or applications relevant to the work of the committee, this court finds no language in the membership application or manual excerpts expressly requiring members to disclose information.

For instance, among all sixty attendees only five applications and sixty patents have been disclosed during JEDEC’s history. If these members perceived the duty to encompass any patent or application with a vague relationship to the JEDEC standard, the record would likely contain a substantially greater number of disclosed patents and applications. That would be legally right, but considering the fact that all companies benefit from selling one type of memory and all they want to achieve one goal, there is no need to disclose all the patents. Nevertheless, it now looks reasonable to ask all the participants of JEDEC to start doing it in order to avoid another “Rambuses”.

The Judge also noted the following:

The record is replete with additional and specific instances of Rambus employees attending JEDEC meetings, taking notes of what was discussed, identifying instances where Rambus already had claims covering what was discussed, and then seeking claims to cover what they learned at the JEDEC meetings. Yet Rambus “did not tell the people at JEDEC that what they were proposing for standardization infringed [its] patents.” Instead, after considering whether to “walk into the next JEDEC meeting and simply provide a list of patent numbers which have issued,” Rambus concluded that it was better to remain silent because “we may not want to make it easy for all to figure out what we have, especially if nothing looks really strong.” Rambus was even advised by its patent attorneys “to stop attending JEDEC” and that “if you go to the JEDEC meetings and stay silent and don’t do anything else, you still have a risk that your patents will be unenforceable if you let the standard go forward and you don’t tell them you have patents.” Rambus was explicitly warned in 1992 that “you cannot mislead JEDEC into thinking that Rambus will not enforce its patent.”

The main idea of the current ruling that is that now Rambus can ask for reconsideration of the legal dispute that concern possible Rambus’ patents infringements by Infineon. So, Rambus has won a battle, but the results of the war between Rambus and memory makers are not clear yet. Nevertheless, Rambus’ shares gained more than 50% after the ruling.