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August 23, 2006

Memory Mudfight Stayed

The ongoing DRAM brouhaha between Hynix and patent-holder Rambus is chilling out, pending a Federal Trade Commission (FTC) decision in its antitrust investigation against Rambus.

Judge Ronald Whyte of the Northern District of California stayed the third portion of a three-part trial, giving the FTC time to set royalty rates on Rambus's patents, and to give Hynix 90 days to apply any FTC findings into its antitrust accusation against Rambus. Part three of the California case is Hynix' accusation of monopolization and unfair competition, that Rambus impeded marketplace adoption of DDR SDRAM.

Hynix had orginally filed against Rambus, seeking declaratory judgment that ten of Ramus' DRAM patents were invalid and not being infringed. Instead, the jury found that all ten patents were both valid and infringed. Oops. Judge Whyte slashed the jury award of $306.9 million to $174 million, calling it "exaggerated", and daring Rambus with a new trial if it didn't like it. Rambus took the bird in hand. So much for phases one and two of the trifecta trial.

Hynix and others under fire by Rambus have argued that the Rambus patents are invalid, and that Rambus improperly failed to divulge patent applications until after the technology was adopted as a global standard. But there appears to have been no compulsion for such disclosure by the standards committee, JEDEC. As noted in an earlier Patent Prospector entry:

The judge in the Rambus-Hynix case, Ronald M. Whyte, noted in his January finding of fact that there was no reason for Rambus to think it had been obliged to disclose to JEDEC its then-current patent applications. In 1993, Gorden Kelly, JEDEC committee chair, stated that JEDEC did not require disclosure of patent applications, and that Kelly's employer, IBM, had no intentions of disclosing its patent applications to JEDEC.

The FTC has done a 180° on Rambus, first letting it off the hook, then, perhaps under political pressure, turning the heat back on with a renewed investigation. Rambus is figuring on being screwed by the FTC, and worried about the impact it will have in Judge Whyte's trial. Robert Kramer, acting general counsel at Rambus remarked, "In the event this case proceeds to trial, we expect to demonstrate to the court that the Commission's findings should not be given prima facie weight." As we all know, prima facie weight makes for heavy lifting.

Rambus has its own antitrust suit going in California, accusing fellow memory-chip makers of conspiracy in price-fixing, sharing cost and price data so as to shove Rambus out of the market. A date for that trial has not yet been set. But Rambus has already scored points there, getting the court to grant access to evidence of an alleged anti-competitive scheme perpetrated by Hynix and other memory manufacturers. Plus, the U.S. Department of Justice, in its own inquiry, in March squeezed price-fixing guilty pleas from four former Hynix executives.

Rambus is also going after Samsung Electronics, Micron Technologies, Inotera Memories and Nanya Technology, having settled with Infineon Technologies AG in March of last year.

Posted by Patent Hawk at August 23, 2006 1:19 PM | Litigation