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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 92.72+5.2%3:59 PM EST

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To: Don Green who wrote (54807)9/22/2000 11:54:47 PM
From: Don Green  Read Replies (2) of 93625
 
Rambus love, Rambus hate

Sep. 22, 2000 (Electronic Engineering Times - CMP via COMTEX) -- When Hyundai
and Micron launched preemptive suits against Rambus Inc. recently, I called a
longtime source familiar with DRAM technology and patent law.

Now retired, this gentleman is no friend of Rambus DRAM. "My opinion hasn't
changed: Rambus is too complicated," he said.

The Rambus patents, however, are another matter. He put me on hold, went to his
basement office and resumed the conversation with a stack of Rambus patents at
the ready. Mike Farmwald and Mark Horowitz, the founders of Rambus, filed
comprehensive patent claims in the early 1990s related to memory bus
architectures and synchronous DRAM technology.

"These were very well-written claims, with a full page or two pages of
references," my source said. "The Patent Office later came back and told them to
split up the claims and refile them."

In 1999, the Patent Office finally granted a long string of patents to Farmwald
and Horowitz, with the patents assigned to Rambus. Based on what my source said,
the Rambus patents are not something the DRAM industry will be able to easily
avoid.

I asked my retired source about the impact of the suits on Rambus' goal of
getting RDRAMs established in the market. Won't the big DRAM players be even
less likely to develop RDRAMs, now that Rambus is asking them to pay for SDRAM
patents?

That is a complex issue, but my source said that business issues, by and large,
override emotions. Rambus could play its hand so that the intellectual property
revenues would complement the royalties from RDRAM shipments.

Is the Rambus patent offensive a deathbed strategy, with Rambus all but
acknowledging that RDRAMs are not destined to become mainstream? Will Micron,
which detests the Rambus model, end up paying higher fees for patents than
Samsung, which is supporting Rambus? Is it kosher to use patents as bargaining
chips in a bid to gain royalties from manufactured products?

This dual nature of the "new-millennium Rambus"-wielding a patent club in one
hand and beckoning "come join us" with the other-is the new reality.

It will be interesting to see if the Patent Office decision to grant some basic
patents to the Rambus founders helps or hurts their original goal of
establishing a new type of high-bandwidth memory in the marketplace. Will a
strong patent hand help Rambus there? Let me know what you think:
dlammers@cmp.com.


eet.com
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