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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Barry Grossman who wrote (66362)	2/21/2001 3:00:18 PM
From: Mihaela	Read Replies (3) \| Respond to of 93625

ebnews.com 'Smoking gun' seen lacking in Rambus papers By Jack Robertson EBN (02/21/01, 02:11:58 PM EST) Court documents submitted in an antitrust suit filed against Rambus Inc. and unsealed last week by a San Jose federal judge do not appear to have produced the "smoking gun" that the company's adversaries were hoping for. The documents -- part of a restraint of trade suit filed by Hyundai Electronics Industries Co. Ltd. -- do reference Rambus' alleged possession of synchronous DRAM patents while it was a member of the JEDEC industry standards body. But much of the data is open to interpretation, according to sources. Hyundai hopes the information will prove Rambus violated JEDEC disclosure rules by failing to tell the committee it had filed its own SDRAM patents even as the technology was being discussed as part of open JEDEC standards deliberation. Hyundai has also argued that Rambus is violating antitrust laws by using its synchronous patents to subvert the industry's open SDRAM standard. Rambus, Los Altos, Calif., has denied the charges. The 201 pages of company documents include Rambus' five-year business plan dating from 1992 and 29 e-mail summaries of JEDEC meetings from 1992 through 1995 during which Rambus was present when the SDRAM technology was discussed. A review of the unsealed material showed that little of Rambus' dialogue pertained to the company's SDRAM patents, while internal company emails are being interpreted variously by parties with knowledge of the case to either support or challenge Rambus' claims. The newly released documents predominately relate to Rambus' preoccupation with establishing Direct Rambus DRAM in the market against the then-evolving SDRAM specification. Rambus did refer to what it called "Sync DRAMs" in its confidential 1992 five-year business plan. As part of a multi-faceted strategy to push its Rambus DRAM design, the company proposed a legal attack on what it called "Synch DRAMs infringing on some claims in our filed patents; and there are additional claims we can file for our patents that cover features of Sync DRAMs. Then we will be in position to request patent licensing (fees and royalties) from any manufacturer of Sync DRAMs. Our action plan is to determine the exact claims and file the additional claims by the end of Q3/92. Then to advise Sync DRAM manufacturers in Q4 '92." Rambus' challengers charge the business plan showed as early as 1992 that the company was crafting its patent defense policy without revealing its intentions to JEDEC. Sources with knowledge of Rambus' strategy said the business plan was written shortly after the company was formed and at a time when it didn't yet have legal counsel on staff. "As part of any litigation there are numerous documents and Rambus makes a policy not to comment on specific documents," said Avo Kanadjian, vice president of worldwide marketing for Rambus. "However, it would be irresponsible and misleading for anyone to view any documents out of context and without seeing all the evidence. It is our right and indeed our obligation to shareholders to do all in our power to protect our patented innovations." Hyundai declined to comment on the documents. Other aspects of Rambus' business plan were revealed in a series of 29 e-mails sent by Richard Crisp, the company's engineering manager who attended the JEDEC meetings. The e-mails offer a blow-by-blow account of the SDRAM technical deliberations and reveal an industry divided over the proposed standard. Crisp's e-mails show Rambus made a concerted effort to sell Direct RDRAM to JEDEC's semiconductor manufacturing members and to counter marketing moves then underway by SDRAM supporters. In a reference to the JEDEC SDRAM deliberations, Crisp on Dec. 11, 1992, wrote, "IBM raised the issue that they were aware some 'voting' JEDEC attendees have patents pending on SDRAMs that they have not made the committee aware of. They will come to the next meeting with a list of the offenders. Their [sic] are currently about 20 patents that are on the tracking list so the list will get longer." There is no further information in the documents as to how Rambus responded. Litigants in the case charge Rambus failed to disclose an initial 1990 patent application, which they claim had broad SDRAM claims. Rambus has defended its actions by asserting that it was not a JEDEC member at the time the SDRAM standard was finally ratified. Two of Crisp's other e-mail messages deal with Rambus' patent relations with JEDEC. Both were issued in response to a separate JEDEC standards proposal, known as SyncLink, or SLDRAM, which at the time was considered a head-on competitor to Direct Rambus. SLDRAM, which is not an issue in the Hyundai suit, ultimately failed to be adopted by JEDEC, although portions of the technology survived as part of a proposed DDR-II standard now being drafted. Crisp's e-mails referred to basic Rambus DRAM patents that may be infringed upon by SLDRAM, although sources close to Rambus noted that Crisp was an engineer and not a legal authority when it came to patent issues. Other sources, however, interpreted Crisp's e-mails as also pertaining to SDRAM technology that Rambus was withholding from JEDEC. Crisp, in a May 24, 1995 e-mail stated "if we have a really strong one [patent claim] ... that is key to the operation of the SLDRAM, then we may want to play that card." After a long discussion of the pros and cons of Rambus vs. SLDRAM, Crisp wrote, "we may want to walk into the next JEDEC meeting and simply provide a list of patent numbers ... here are our issued patent numbers, you decide for yourselves what does and does not infringe. On the other hand we may not want to make it easy for all to figure our what we have if nothing looks really strong." In other instances, Crisp's e-mail questions whether the Rambus patents superseded SLDRAM. "Basically it is foolish to believe that the companies on SLDRAMs will not apply for patents to protect their work ... This will be an interesting poker game for sure. I'd like to somehow make it appear to the world that the JEDEC group moving in the SyncLink direction is an admission of failure for the previous high profile work of JEDEC [on] SDRAMs." Crisp then related a discussion with two Intel Corp. employees, "who asked me what I thought of the SyncLink proposal. They asked about the intellectual property issue, and I responded that my personal opinion was that it would be virtually impossible for them to not infringe some aspect of what we had done. I re-emphasized this was my own personal opinion and was not to be taken as a definitive statement." Rambus' market opponents said yet another e-mail written by Crisp shows the firm intended to keep its SDRAM intellectual property secret from JEDEC. Sources familiar with Rambus' strategy said the email demonstrates the company was in fact determined to be forthcoming with any patent plans it might have in the works. Crisp's Dec. 5, 1995, email stated that "Personally,I don't think this (patent policy) is nearly as onerous as some of us have earlier believed. As long as we mention that there are potential patent issues when a showing or a ballot comes to the floor, then we have not engaged in 'inequitable behavior.' At the same time, we do not necessarily have to agree to abide by the policy for any particular presentation or ballot. In other words, we can pick and choose what we decide to abide by on a case-by-case basis. "The things we should not do are to not speak up when we know that there is a patent issue, to intentionally propose something as a standard and quietly have a patent in our back pocket we are keeping secret that is required to implement the standard and then stick it to them later. I am unaware of us doing any of this or of any plans to do this." Rambus filed its original broad patent application in 1990, which was subsequently revised many times over the years. In 1997, more specific claims regarding SDRAM innovations were added to the original patent application, which was finally granted in 1999. Hyundai successfully petitioned Federal Magistrate Patricia Trumbull of the U.S. District Court in San Jose to declassify the papers. Hyundai argued that the documents should be allowed as evidence in a separate SDRAM patent suit Rambus has filed against the company in Mannheim, Germany, and also as part of a preliminary fact finding probe of Rambus' actions that sources say the Federal Trade Commission is conducting. Rambus' patent claims have led to a raft of lawsuits and counter claims. The company is suing Hyundai on charges of patent infringement in England and has filed separate suits in Germany against Infineon Technologies AG and Micron Technology Inc. Rambus has also filed against Infineon in Richmond, Va. Additionally, Micron is counter suing Hyundai in Wilmington, Del.