John: I see all of this as a massive chess game right now, or Poker if you prefer. Poker is a somewhat better analogy, because there is a lot of huffing and puffing going on, and believe me, bluffing. Rambus has one enormously powerful chip on its side of the table right now: the patents in question. Now, I don't claim to understand how good these patents are, but Rambus has hired first rate patent counsel to defend them and has indicated that it will not be passive in their defense. This can be an all or nothing approach, because if they push too hard too fast, and the patents are determined by an arbitrator or court of competent jurisdiction to be too broad or not on point they have lost not only their big chip, but the resentment which will follow from the industry for pushing the issue will be pretty large. Backlash will occur, and Rambus may have a harder time getting accomodations going forward from other industry players. They still have Intel support however, and you could argue that that is all they still need to hit the $6.00/sh. in 2003.
That is one approach. But then look at it this way. Rambus is sitting at the table with two pair, aces and kings. Hitachi is sitting across the table with more chips in their pile, but they know Rambus is willing to keep raising the ante on this one hand until every chip they can beg, borrow or steal is bet. Because if Rambus wins this hand, they get not only the pot (future revenues) but part of past pots (past revenues for product already shipped using the violative design) and maybe the current pot even gets bigger due to some form of damages beyond compensatory. And, time is on Rambus' side because every minute that goes by more product is being shipped with the potentially violative technology in it, so as the two cardplayers stare at each other across the table, the clock is ticking...in Rambus' favor. Now, Hitachi may have a full house but when it looks at the pile of chips in front of it will it be willing to bet em all (so to speak). Some of its friends are standing behind it going "yeah, bet em all", because they may also have something to lose, but they are not in the game right now. Sega is looking at Hitachi with a frown on its face, suggesting maybe they fold. So, what does big old Hitachi do when looking across at a steely-eyed, winner take all, nothing-to-lose Rambus?
Do they feel lucky?
I think Rambus is doing exactly the right thing right now. I am sure they have discussed all this with Intel and have their blessing. As Gemstar has proven, you must be insistent the power of your patent protection and you must defend each and every perceived incursion on your legal turf. Strength and assurance are everything right now. And, if Rambus loses eventually, they are right back where they are now anyway. If they win totally, we have another Qualcomm,or bigger. If they settle, on any terms at all, they win more than they had hoped of eight months ago.
That is why I like their strategy and think it is a smart move at this point in time.
|
