Analysis: Infineon won't be alone in fight
against Rambus
By Jack Robertson
Electronic Buyers' News
(08/18/00, 06:08:30 PM EDT)
WASHINGTON -- Rambus Inc. has given the DRAM industry what it has
longcoveted: a definitive lawsuit to challenge the validity of Rambus' patents on
synchronous DRAMs and logic interfaces. DRAM protagonists have been
considering filing a patent suit against Rambus, which has now obliged them by
suing Infineon Technologies AG for patent violations.
After licensing its SDRAM technology to three Japanese DRAM makers, Rambus
is carrying through on threats to sue recalcitrant chip makers that are balking at
coming to terms with the design firm. By taking on Infineon, which is still
majority-owned by German giant Siemens AG, Rambus has dispelled all charges
that it is only going after DRAM companies likely to become licensees rather than
endure a long legal fight.
The U.S. patent suit was filed in Virginia federal court against Infineon after it
appeared that licensing negotiations had broken down, said Avo Kanadjian,
Rambus' vice president of worldwide marketing (see Aug. 11 story). Discussions
between the two companies, according to Kanadjian, resumed following filing of
the suit. But Infineon, having just been sued by Rambus, was allegedly not very
receptive to the idea of renewed talks.
On Monday, in fact, Infineon vowed to fight the Rambus suit vigorously (see Aug.
14 story). Analysts noted that Infineon isn't likely to agree to an out-of-court
settlement, as Hitachi Ltd. did recently.
"Infineon has almost nothing to gain by backing down," said Bob Merritt, an
analyst at Semico Research Corp. in Redwood City, Calif. "Hitachi got a great
deal from Rambus in settling: royalties to Rambus are applicable only until the
end of the year, when Hitachi and NEC merge their DRAM design and marketing
operations. And with Rambus dropping Sega Enterprises [which uses Hitachi
chips in its Dreamcast game player] from the suit, Hitachi protected one of its
prime customers." Infineon apparently was close to filing a patent-infringement
suit of its own against Rambus when the Mountain View, Calif., company beat it
to the punch. An ad hoc industry group of DRAM and logic-chip makers and some
OEMs have been meeting for more than two months to consider possible
counteractions against the aggressive licensing campaign Rambus has been
waging for its patents.
While some DRAM companies were purportedly reluctant to take the lead in filing
suit against Rambus, Infineon was said to have thought about spearheading such
an initiative. A spokesman at Infineon's headquarters in Munich said he knew
nothing about such a possibility.
In addition to the ad hoc group's activities, the industry's Advanced DRAM
Technology alliance has pondered filing an antitrust complaint against Rambus
with the Federal Trade Commission. The charge would be similar to the
now-dropped Hitachi defense that Rambus used data obtained from the
open-standards deliberations of the Joint Electronic Device Engineering Council
(JEDEC) as the basis for its patents. Hitachi claimed, as will the alliance if it does
file with the FTC, that Rambus is now attempting to use those patents to restrain
trade by charging high licensing fees on single-data-rate and double-data-rate
SDRAM, putting competitors at a disadvantage vis-a-vis Direct Rambus DRAM.
The alliance, however, apparently has one major defector--Intel Corp., which quit
the discussions after initial news reports of the appeared on the meetings (see
March 1 story).
Pat Gelsinger, vice president and chief technology officer of the Intel architecture
group and the company's representative at the alliance meetings, blamed several
DRAM members-including Hyundai, Infineon, Micron, NEC, and Samsung-for
leaking reports that Intel was participating in the discussions. Sources said he
claimed Intel no longer had confidence that the alliance's antitrust deliberations
would remain confidential.
An Intel spokesman said the company routinely doesn't comment on reports from
industry sources who can't be identified. Gelsinger couldn't be reached for
comment. Meanwhile, DRAM makers are lining up to support Infineon in its
defense against Rambus. As reported previously, a large number of DRAM
suppliers had rallied around Hitachi after Rambus filed suit against it.
According to sources, companies scoured their patent portfolios to find what they
claimed were prior inventions of SDRAM technology. That research effort
continued even after Hitachi settled with Rambus, and the library of industry
patents related to SDRAMs is now expected to be available to Infineon.
Sources also said that JEDEC, which has considered it inappropriate to take any
action against Rambus, will now be able to file a friend-of-the-court brief detailing
its position. As for the ad hoc industry group, it has not come to a final agreement
on what pre-emptive strike, if any, to take against Rambus. Sources said there is
concern that any united action might create an unfavorable image of the industry
as ganging up on Rambus. Even Infineon is reportedly worried about a backlash
resulting from the appearance of a foreign electronics giant attacking a small U.S.
high-tech company.
Semico's Merritt notes, however, that Rambus appears now to have alleviated all
these concerns by throwing the first legal punch, opening the way for a final
determination on the validity of Rambus' SDRAM patent and licensing strategy.
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