FTC fires opening salvo in Rambus patent dispute
Commission seeks to block royalty claims
Jack Robertson
EBN
(05/05/2003 10:00 AM EST)
The Federal Trade Commission last week opened its antitrust hearing against Rambus Inc. to determine whether the intellectual property (IP) designer engaged in restraint of trade when it failed to disclose pending patents while a member of a JEDEC committee drafting an SDRAM open industry standard.
The stakes are high for Rambus given that lawyers for the FTC are asking the commission to bar the company from collecting royalties on the patents, which Rambus said define a synchronous memory interface found in all SDRAM and DDR SDRAM chips shipping today.
Rambus in its most recent quarter collected $24.8 million in royalties, which included increased payments from memory IC companies that have licensed the company's SDRAM and DDR technology.
An FTC cease-and-desist order would also block Rambus from seeking royalties on any new claims related to its synchronous interface patents. Geoff Oliver, an FTC attorney, said the order would keep Rambus from making patent claims covering a range of technologies, including auto precharge, low-voltage swing, source synchronous clocking, and externally supplied reference voltages.
At the opening day of the hearing, the FTC and Rambus clashed over whether the company attempted to use its patents to unfairly lay claim to the industry SDRAM standard or is entitled to receive royalty payments for what Rambus claims is a legitimate invention.
In presenting the FTC's case, Oliver said Rambus hid its pending patents from JEDEC in an effort to ensure that the industry would commit to manufacturing products before Rambus began demanding royalties.
Oliver argued that the entire industry infrastructure of DRAM, chipset, and motherboard suppliers, computer manufacturers, and test equipment companies had designed and validated their products to conform to the JEDEC standards. He charged that Rambus then tried to "monopolize" the standards by waiting until industry specifications "had been locked in" before disclosing its patents.
Rambus lawyers responded that JEDEC rules didn't require the company to disclose pending patents. Greg Stone, an attorney representing Rambus, Los Altos, Calif., said JEDEC regulations pertained only to the disclosure of existing patents and not to patent applications--except in certain instances when companies made technical presentations during JEDEC meetings.
Stone added that JEDEC's own records showed that "almost no companies disclosed patent applications" except for those few that made formal presentations.
Stone said many companies declined to disclose pending patents for fear of tipping off competitors to corporate R&D strategies or because of the threat that rival DRAM manufacturers might rush to file their own applications ahead of their competitors. In particular, Stone said IBM Corp. and certain other panel members told JEDEC directly that they would not reveal patent applications.
The FTC's Oliver argued that the failure of some JEDEC members to disclose their patent applications did not excuse Rambus of responsibility. "This does not justify Rambus' violation of antitrust laws," he said.
The FTC's first witness in the case, JEDEC chairman Desi Rhoden, contended that the organization's rules do in fact require disclosure of patent applications. Rhoden cited a JEDEC operating manual that spelled out "the obligation to disclose any patent or pending patent."
Sean Royall, a second attorney for the federal trade body, cited internal Rambus documents that he said showed that the company was aware of the possibility that its patents could be declared unenforceable if it was found that their existence were kept from JEDEC during the standards process.
In their initial defense, Rambus attorneys also argued that the company's synchronous patents are a valid and enforceable extension of the original Rambus DRAM (RDRAM) patent issued in 1990.
Stone said the company is seeking to collect royalties from all DRAM manufacturers because its synchronous memory interface IP "resulted from superior skill" that included technology covered by the company's 1990 patent.
"All DRAM manufacturers today use some of the technology in the original patent," he said.
However, the FTC's Royall said that as a member of the JEDEC SDRAM body from 1992 to 1996, Rambus was privy to technical presentations and later amended its earlier patent to include many of the same technologies.
Royall cited JEDEC presentations related to programmable CAS latency, programmable burst length, on-chip phase-locked-loop/delay-locked-loop (PLL/DLL) specifications, and dual-edge clocking, which he charged were added later as amendments to the Rambus patent.
Stone countered that it was JEDEC that took Rambus' 1990 patent and used the description of the synchronous memory interface to devise what eventually came to define the open industry SDRAM standard.
Stone charged that DRAM manufacturers "were slow to develop a new- generation DRAM" to compete with Rambus' RDRAM interface and were forced to adopt much of the original patent invention to arrive at the JEDEC SDRAM and DDR standards. |
