The Best Idea I Ever Had I Stole
Story Filed: Sunday, May 13, 2001 10:30 AM EST
May 13, 2001 (JAGfn.com via COMTEX) -- Regardless of the jury verdict against Rambus, we would like subscribers to know the following: We will not drop Rambus from our portfolios, and we do not think the fraud allegations are correct. Whether or not the jury verdict will stand remains to be seen, but based on the judge's prior actions, we wouldn't be surprised if he just simply let the appellate courts deal with the issue.
If we felt Rambus did something truly wrong, we would not keep the company in our portfolios. Unlike Lernout and Hauspie, who did commit fraud against their investors and partners, Rambus has been accused of committing fraud while they attended JEDEC standardizations meetings in the early 90's. Largely, the basis by which the jury found Rambus guilty is flawed, and does not pertain to actual patent law.
Despite the fact that we think outcome is a result of a monumental spin job by the Infineon attorneys, we do feel it will be important to see how Rambus defends themselves in Delaware against Micron.
Rambus meets Infineon in court in Germany on May 18th, and the trial against Micron in Delaware begins at the end of the month.
The outcome of the Infineon trial is not the end of the world for Rambus, and depending on how the trials against Micron and Infineon in the near future go, this may be a fantastic buying opportunity.
In regards to our ongoing reporting of the Rambus case, some subscribers have called the effort an imbalance of reporting over the other companies in our portfolios. We would like to remind subscribers that although we are following Rambus very closely at this juncture, it does not mean we are not staying on top of our other investments. We are. We believe by putting Rambus under the microscope, and staying on top of the trials by attending them, we have a thorough understanding of Rambus, and whether or not the fraud charges are justified. We can say this with conviction, based on our time in Richmond: the fraud charges are not justified.
The case Rambus has brought against the memory manufacturers regards patent infringement. The case the memory manufacturers have brought against Rambus is largely the result of an industry that is resisting a long-overdue abandonment of an outdated model built upon cross licensing.
The implications of this legal battle are far-reaching and portend a necessary change that must happen with regards to standards settings, if the industry truly wants to proceed and advance in a knowledge-based economy. At present, with the latest verdict against Rambus, there is little, if any reason for an intellectual property firm to join, or stay in a standards-setting body. Effectively, any IP firm that enters a committee like JEDEC will risk giving up their IP rights, and therefore forfeiting their potential for revenue.
As we've stated a number of times in the past, Rambus' RDRAM technology is what attracted us to the company in the first place, and it is largely what will keep the company in our portfolios if SDRAM and DDR royalties are not granted to the company.
In their mid-quarter conference call, Geoff Tate stated that the OEM pricing goal the company was expecting to see at the end of the year has for the most part already been met. Currently, Pentium 4 systems without a monitor are retailing for around $900.
When it comes to price for performance, there will be little question as to which Pentium 4 offers more value, the RDRAM P4, or the SDRAM P4. We believe the performance of the Pentium 4 with SDRAM will suffer, and therefore the minor cost difference at the retail level between RDRAM and SDRAM will become a non-issue with most buyers. In our opinion, consumers will see the value of the Rambus P4 based on the incredible performance advantage.
For those of you who tired of our extensive Rambus reporting, we apologize, but it's only going to become more exhaustive. Both Jim and Bill spent the last two and a half weeks in Richmond observing the trial against Infineon; they were the first to arrive, and they were practically the last to leave.
By Fred Hager |
