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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 94.69-0.8%3:59 PM EST

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To: Don Green who wrote (47640)7/22/2000 12:19:02 AM
From: Don Green   of 93625
 
Rambus resistance martialing its forces

Jul. 21, 2000 (Electronic Buyers News - CMP via COMTEX) -- The counterattack
against Rambus Inc.'s synchronous-DRAM and logic-interface patent claims could
get ugly.

An ad hoc group of more than a dozen DRAM manufacturers, chipset makers, and
OEMs has started collecting intellectual-property and patent data to form the
basis of a civil suit to declare Rambus' synchronous patents invalid.

This is no lightweight group. Sources said the initial strategy session brought
out high-level executives-some coming all the way from Japan.

However, it may be at least a month before the group decides whether to move
ahead.

Many OEMs were alarmed when Rambus filed suit against Sega for violating its
synchronous patents by using Hitachi's Super-H processors that interface with
SDRAMs.

Although the case against Sega was dropped when Rambus settled the litigation
with Hitachi, OEMs using SDRAMs, DDR SDRAMs, chipsets, or processors with
synchronous interfaces realized they might not be immune from a Rambus patent
suit.

It also threw the supply chain's routine patent-litigation indemnity clauses
into a cocked hat. Traditionally, OEMs and chip suppliers have vague provisions
in their purchasing agreements about shouldering patent liability. Ever since
Rambus targeted Sega, OEMs have wanted iron-clad guarantees that IC suppliers
will help pay litigation costs and damages if Rambus sues them.

The ad hoc group reviewing the intellectual property and patents is
collaborating with the Advanced DRAM Technology alliance, which may file an
antitrust complaint against Rambus with the Federal Trade Commission.

Ironically, Intel-itself still under antitrust investigation by the FTC-is
participating in the DRAM industry's planning sessions.

Most participants in the parallel efforts against Rambus hope to avoid taking
legal action on the synchronous issue and are eager to see Rambus back off. But,
so far, the company shows no signs of doing so.

The industry group is strategizing on how litigation against Rambus should
proceed. A lawsuit to invalidate the Rambus synchronous patents must be filed by
a company that would claim the high-speed memory-design company violated its
patents. Many DRAM makers say they have pre-existing intellectual property
invalidating the Rambus synchronous patents but are reluctant to lead the charge
by filing a suit in their own names.

Sources said one major DRAM producer appears willing to be the legal
standard-bearer. (No. It's not Micron.)
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