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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (25391)	8/24/2001 12:43:10 AM
From: Bilow	Respond to of 30051

Hi mishedlo; My guess is that Rambus doesn't win royalties on DDR, so I wouldn't go long it except as a DCB. At the Infineon trial, they had two claims, one for DDR clocking and one for DLL. Those two claims were among the claims that were thrown out first, so one supposes that they were not as strong as the SDRAM only claims. The DDR clocking claim was way off base, I'd be very surprised if they got anywhere with it. If you look at how the original RDRAM patent used two clocks, it doesn't have the least similarity to DDR clocking. The DLL claim may have more of a chance, but I haven't looked at it carefully. So I would put the chances of them winning at DDR to be much less than 50%, and that's without taking into consideration the fraud conviction. On the other hand, I put the royalty rate for DDR at 2%, and Rambus was asking 3.5%. But that brings in a whole 'nother issue, which is how much royalties can Rambus win in court, assuming that the courts do decide that there is infringement not eliminated by fraud? Zeev Hed will tell you that 3.5% is very reasonable royalties, but I don't think Zeev knows much about the practices of the memory industry, and he's been nothing but dead wrong on the strength of Rambus' patent position so far. In other words, in order to pull down the brass ring, Rambus has to: (1) Prove that DDR infringes against their patents; (2) Not have their fraudulent business practices wipe out the DDR royalties; and (3) Obtain the high royalties that they're asking for. I think that the odds are against them on both 1 and 3, while 2 may be in their favor. But overall, I just don't know enough about the legal system to estimate the chance. If someone is convinced that Rambus does have a 50% chance of winning 2%~3.5% royalties on DDR, they should be looking to buy as much RMBS as possible. Maybe they should look for a better technical entry point, but they should be watching the stock carefully. -- Carl P.S. Any further comments, we should take over to the RMBS thread.