Electroic News says... "Industry to Attack Rambus Patents"
This is their last ditch effort to avoid paying Rambus royalties. They don't have a leg to stand on. It is all over and Rambus has won!
electronicnews.com
Industry to Attack Rambus Patents
Memory makers reportedly upping the ante
By Steven Fyffe
If industry reports are accurate, some major memory makers will soon be asking
the Federal Trade Commission (FTC) to overrule the sweeping patent claims of
Rambus Inc. A report earlier this month stated that a group of DRAM
manufacturers were preparing to file an antitrust complaint against Rambus with
the FTC.
Some analysts said the impending move was a last ditch
effort to avoid paying Mountain View, Calif.-based Rambus
royalties for its patents on mainstream SDRAMs, double
data rate (DDR) SDRAMS, and logic controllers with
synchronous interfaces.
Rambus has said that it always planned to force memory
makers to pay for its patented synchronous DRAM
technology, and has recently upped the legal pressure on
companies to do so. Hitachi Ltd. tried to fight off one such
patent infringement suit, but capitulated last month and
signed a licensing agreement with Rambus instead.
"If Hitachi thought they could have proven those patents
were not valid, they probably would not have settled," said
Steve Cullen, principal analyst at Cahners In-Stat Group,
Scottsdale, Ariz. "To me that says they don't have a basis
for challenging the patents. If they are planning an antitrust complaint, it seems
to me they think they are going to have a hard time breaking those patents."
An antitrust battle would take even longer than a courtroom confrontation, Cullen
said.
Hitachi agreed to the licensing deal after its customer Sega Enterprises Ltd. was
dragged into the suit filed by Rambus, on the grounds that some of Sega's game
consoles contained Hitachi's SH microprocessor. Rambus claimed the
processor used its synchronous technology.
"It's bigger than just DRAM," said Bob Merritt, director of emerging markets at
Semico Research Corp., Phoenix. "This extends to microprocessors, SDRAMs,
DDR and chipsets, and anybody making them." The battle has the potential to
affect everyone in the product chain, including OEMs, Merritt added. "By
bringing in the customer with Sega, they have demonstrated this thing has the
potential to go all the way up the chain to the OEMs, and that's never been done
before."
The top three DRAM makers, Samsung Semiconductor Inc., Hyundai
Electronics Industries Co. Ltd. and Micron Technology Inc., publicly have
remained quiet on the possibility of antitrust action.
But Merritt said a legal challenge of Rambus' patents was inevitable. "It's too big
of a risk to be floating around undefined," he said. "When you're talking about
1.5 to 2 percent royalties in an industry that has been losing money, it can
make a big, big difference."
The royalties could add up to $600 million to $800 million a year if all the
companies were found to be violating Rambus' patents and decided to pay up,
according to Merritt.
Avo Kanadjian, vice president of worldwide marketing at Rambus, said he had
read reports of the possible antitrust complaint, but was not aware of any current
proceedings. Rambus prefers negotiation to confrontation, Kanadjian said.
"Since the last suit against Hitachi, a number of companies have studied our
patents and come to us to negotiate."
Rambus aims to control half the DRAM market by 2003, he said. "The
companies we are dealing with all have their own IP (intellectual property), and it
is very common for them (to) meet and cross-license their respective patent
portfolios. We are very confident they respect the IP of others."
Some of the legal defenses raised by Hitachi may be incorporated into the
reported antitrust complaint against Rambus. One of the arguments was that
Rambus had taken technology discussed in open sessions of the Joint Electron
Devices Engineering Council (JEDEC) early in the 1990s. "If you are forming a
standard, and you know you are pressing patent action on those standards, you
are supposed to let the committee know," said Jim Handy, a memory analyst at
GartnerGroup Inc.'s Dataquest division, San Jose. "Rambus did not broadcast
what they were doing in JEDEC."
Kanadjian said Rambus had not broken the rules. "JEDEC standards don't
preclude companies from charging for the use of their IP," he said.
The whole concept of a patent vs. a monopoly presented an interesting paradox,
Cullen said.
"What is a patent but a legal monopoly? The government recognizes the
investment you have made in developing a technology and says, 'We are going
to give you a monopoly on it until this patent expires.' Antitrust laws come into
play when somebody's patent position gets too strong. And it's up to a judge to
decide if that has happened." |
