Look what else Jack is up to. This one may be a real scoop:
Patents are 'royalty' pain for DRAM industry -- IC makers may ask FTC to investigate Rambus on antitrust grounds
Jul. 07, 2000 (Electronic Buyers News - CMP via COMTEX) -- Major DRAM
manufacturers are quietly planning to file an industry antitrust complaint
against Rambus Inc. with the Federal Trade Commission, according to high-level
industry sources last week.
The move would be a pre-emptive strike to have Rambus' synchronous-DRAM
interface patents declared unenforceable. The biggest memory makers also want to
block further attempts by Rambus to force them to pay royalties on their
mainstream SDRAMs, double-data-rate SDRAMs, and logic controllers with
synchronous interfaces.
Rambus last month said it planned to seek royalties from any company using its
patented synchronous-memory technology in a sweeping claim aimed at virtually
all DRAM vendors and a number of other chip suppliers. Toshiba Corp. and Hitachi
Ltd. have since separately agreed to license the patents and pay Rambus
unspecified royalties.
The legal wrangling would appear to have far-reaching implications for OEMs
pondering whether to use conventional SDRAM or adopt Rambus' proprietary Direct
Rambus DRAM devices.
The company so far has charged at least one OEM with infringing its synchronous-
memory technology, adding Sega Enterprises Ltd. to a suit it had filed against
Hitachi. The game-console maker was implicated because the Hitachi SH
microprocessors found in some of its game consoles were alleged to use Rambus'
synchronous technology.
With their OEM customers at risk, "the [semiconductor] industry has no choice
but to bring litigation against Rambus," said Bob Merritt, an analyst at Semico
Research Corp., Redwood City, Calif.
"However, far more is at stake," Merritt said. "When Rambus filed
patent-infringement charges against Sega, an OEM chip customer, it opened
Pandora's box. Suddenly every OEM customer of SDRAMs, DDR, chipsets, or
microprocessors interfacing to synchronous memory is vulnerable to being sued by
Rambus. Neither memory producers nor their customers can tolerate this unsettled
situation, and it has to be resolved."
The FTC petition would be filed by a contingent of DRAM companies that are now
holding final meetings before deciding within the next two weeks whether to take
the antitrust action, according to sources involved in the discussions.
No DRAM company contacted would comment on the issue. A senior executive at one
of the industry's largest DRAM suppliers would say only that, "I expect to be
spending a lot of my time with lawyers in the next few months." JEDEC chairman
Desi Rhoden was out of town and unavailable for comment.
Avo Kanadjian, vice president of worldwide marketing at Rambus, Mountain View,
Calif., said he knew nothing about the potential plan and refused to speculate
on the company's reaction to a possible antitrust challenge.
A vice president at one of the so-called Big Five DRAM producers, who declined
to be identified, told EBN that memory vendors had hoped the Rambus synchronous
patents would be invalidated as the intellectual-property house proceeded with
its lawsuit against Hitachi and Sega.
Hitachi used an antitrust defense in challenging Rambus' patent claims and said
it had been using technology garnered during open JEDEC (Joint Electron Devices
Engineering Council) sessions in the early 1990s. However, Hitachi surprised the
industry last month by agreeing to settle the suit, leaving the counterclaim
unresolved. In ending the litigation, Hitachi agreed to license and royalty
fees, but pointedly refused to recognize Rambus' patent claim as valid. Sega was
dropped from the complaint at the same time.
Kanadjian said he doubted major DRAM makers will press any of the issues that
Hitachi raised in its initial defense. "Hitachi tried to add five major DRAM
manufacturers to the case, and all of them refused to join," he said. "If these
companies agreed with Hitachi, they could have joined the case at that time."
Still, Merritt said that aside from the deals brokered with Hitachi and Toshiba,
other DRAM manufacturers are unlikely to willingly pay for technology that they
believe is common property. "Semiconductor firms, of course, don't want to pay
royalties on synchronous technology they feel was pre-existing long before
Rambus ever filed for patents," he said.
The charges being drafted for the FTC complaint do in fact parallel Hitachi's
defense, according to sources involved in the effort.
As reported earlier this year, Hitachi argued before the U.S. International
Trade Commission that Rambus had violated the Sherman Antitrust Act. The company
alleged that Rambus tried to monopolize the memory market by forcing chip
manufacturers to use its proprietary Direct RDRAM design and then by interfering
with the adoption of competitive SDRAM technology by asserting rights to
synchronous-interface patents.
Hitachi also claimed that synchronous DRAMs and logic interfaces are open
industry standards developed by JEDEC. The company said Rambus was a participant
in JEDEC deliberations during which the standards were drafted, but pulled out
of the body in 1995 and filed amended synchronous-patent applications soon
after.
Hitachi said Rambus violated JEDEC rules and tried to restrain trade by refusing
to reveal its patent intentions during open panel discussions.
The company cited a 1996 FTC antitrust case against Dell Computer Corp. in which
Dell was cited for failing to disclose patents evolved during open-standards
deliberations by a body similar to JEDEC. Dell subsequently signed a consent
decree with the FTC that prohibited the company from enforcing any of the
patents it failed to disclose to the standards group.
Kanadjian contended that Rambus analyzed the Dell FTC consent decree after
Hitachi brought it up during the ITC case. "There's no similarity between the
Dell action and Rambus patents," he said.
Hitachi also alleged in its initial reply that the Rambus synchronous patents
were invalid because of "prior art," meaning that the technology was in wide use
long before the Rambus patents were granted. This claim may not be a main part
of the petition now being framed, since the FTC doesn't have the authority to
determine patent validity.
http://www.ebnonline.com/
By: Jack Robertson
Copyright 2000 CMP Media Inc.
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