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Thursday, November 23, 2017
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Court Paper Unveils Rambus’ Tactics On SDRAM Patents


Monday, February 26, 2001


Rambus vs the Memory Industry

Rambus Inc.''s contention that it owns fundamental chip-interface technology used by virtually every DRAM vendor in the market has prompted speculation in legal circles as to how secure its patent claims will prove to be.

The release of internal company documents by a San Jose U.S. District Court magistrate earlier this month has raised the issue of whether Rambus used so-called "submarine" tactics to secure rights to the contested DRAM technology. Such claims are commonly used by opponents to support their charges of antitrust violations, according to attorneys polled.

In legal parlance, "submarine patents" are kept under wraps until products they cover come to market, and then surface as the patent holder seeks licensing fees and royalties, said James Burger, an attorney at Dow, Lohnes & Albertson, Washington, D.C.

Companies claim that Rambus violates JEDEC patent policies

Three DRAM makers -- Hyundai Electronics Industries, Infineon Technologies, and Micron Technology -- in separate cases in the United States and in Europe are accusing Rambus of just such anti-competitive tactics. The suppliers, which Rambus is suing for alleged SDRAM patent infringement, claim that the company failed to disclose its own SDRAM patent applications as required while participating in JEDEC industry deliberations to draft an open standard for the technology.

Rambus has countered that it was not obligated to disclose its SDRAM patent filings because the company never participated in a final JEDEC vote to ratify the standard.

A second issue that is likely to be addressed in the court cases is whether the SDRAM standards adopted by JEDEC predate Rambus'' patent applications. Legal opponents argue that Rambus only filed definitive SDRAM claims in 1997, two to four years after a series of JEDEC SDRAM standards had been adopted. Rambus contends the amended 1997 claims were part of the company''s original 1990 patent application and as such predate the JEDEC standard.

Rambus’ revised patent application enforceable?

"It all depends on how specific the original patent application is," said Alexander Poltrorak, chairman of General Patent Corp., a Suffern, N.Y., patent manager "It becomes legally blurred when the revised patent application doesn''t deal specifically with an invention claimed in the original application." Confidential Rambus documents unsealed recently by a San Jose federal judge have added fuel to the debate, with both sides pointing to disclosures they claim support their respective cases. Hyundai, which petitioned for the release of the files as part of an antitrust suit it filed against Rambus, said the documents show Rambus had a hidden agenda to subvert the industry''s open DRAM standard. Rambus, Los Altos, Calif., has denied the allegations.

A common defense used in patent infringement trials is to establish a pattern of anti-competitive behavior that would render the patents unenforceable, according to Poltrorak.‘

Patents may affect participation in standard bodies

In fact, many companies are now far more careful in their relations with industry standards bodies in the wake of several precedent-setting cases in the last decade, Burger said. "If companies have intellectual property they don''t want to disclose, they now tend to stay out of any open standards drafting body," he said.’

Burger pointed to a 1996 consent decree Dell Computer Corp. signed with the Federal Trade Commission agreeing not to enforce its patents on a video-bus line that were not disclosed to an industry group drafting open standards on the technology.’

Rambus, which participated in JEDEC SDRAM deliberations for four years, left the group in 1996, one month after the Dell consent decree. Legal opponents claim this showed that Rambus feared it could become the target of similar antitrust charges if it remained in the JEDEC group without disclosing its SDRAM patent applications. Rambus has said the JEDEC process was ineffective and unrelated to the company''s core business of promoting various versions of its proprietary Direct Rambus DRAM.

Rambus now finds itself the subject of an FTC fact-finding probe as to whether nondisclosure of its SDRAM patent applications to JEDEC constituted a restraint of trade, according to industry sources interviewed by the commission. Asked to comment on the probe, a Rambus spokeswoman said the company "has not been contacted by the FTC."

JEDEC members were to disclose pending patent details

During its four years in the JEDEC group, Rambus disclosed only one patent application on a product unrelated to SDRAMs. Rambus was not a member of JEDEC when the final industry SDRAM standard was adopted in 1996, according to Avo Kanadjian, the company''s vice president of worldwide marketing.

But that did not exempt the company from its obligation to disclose its 1990 SDRAM patent application, said Farhad Tabrizi, Hyundai''s vice president of worldwide memory marketing. Indeed, critics say unsealed company e-mails written between 1992 and 1996, when Rambus was a JEDEC member, show the company''s intent to use any SDRAM patent it obtained to collect royalties from chip makers to provide a cost advantage to the company''s Direct RDRAMs.

Intension on “Sync DRAM” patent highlighted in business communications

The documents released by the court show Rambus did refer to what it called "Sync DRAMs" in a confidential five-year business plan dating from 1992.

As part of a multifaceted strategy to push its Direct RDRAM design, the company proposed in the unsealed documents a legal attack on what it called "Sync 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."

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.

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. Crisp''s e-mails show Rambus made a concerted effort to sell Direct RDRAM to JEDEC members and to counter marketing moves then under way by SDRAM supporters.

Rambus'' market opponents said one e-mail in particular written by Crisp showed the company intended to keep its SDRAM intellectual property secret from JEDEC. Sources familiar with Rambus'' product strategy said the e-mail demonstrates the company was determined to be forthcoming with any patent plans it might have in the works.

"Personally, I don''t think this [patent policy] is nearly as onerous as some of us have earlier believed," Crisp stated in a Dec. 5, 1995, e-mail. "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."

How the court is to look at these materials

Since Rambus never revealed to JEDEC its 1990 SDRAM patent application, the unsealed documents relate to the company''s intentions and possible motives behind the nondisclosure, critics charge.
Points such as this will likely be featured as a central issue of legal argument during the upcoming trials, although Rambus'' Kanadjian asserted that the information cannot be interpreted without first being put into context.

"As part of any litigation, there are numerous documents, and Rambus makes a policy not to comment on specific documents," he said. "It would be irresponsible and misleading for anyone to view any documents out of context and without seeing all the evidence."

The issues are not precedent

Rambus Inc. isn''t the first company to become ensnared in a patent controversy relating to deliberations of the Joint Electron Device Engineering Council (JEDEC). The issue has played a role in several cases, and at least two disputes are currently active.

Sun Microsystems is suing Kingston Technology Inc., Fountain Valley, Calif., on memory module patent infringement charges. JEDEC officials have been subpoenaed to give depsoitions as Kingston is arguing there is an open industry standard on the module that predates the Sun patent claims.

Kingston, like the Rambus legal adversaries, charges that by not disclosing its memory module patent plans, the patents were made unenforceable. The case is pending in U.S. District Court in San Jose.

Micron Electronics Inc. is suing Smart Modular Technologies Inc. for allegedly infringing its patent on a write-protect feature in DRAM modules that is part of an existing JEDEC standard. Another module maker, Simple Technology Inc., settled with Micron last year in a dispute over the same patent.

In 1993, Wang Laboratory Inc. sued Mitsubishi Electric America Inc. for infringing its SIMM patent, leading Mitsubishi to counter that Wang had failed to disclose the patent during JEDEC deliberations related to the industry SIMM standard. The case was settled before any final court action, with Mitsubishi freed from damages.

All three litigants in the Rambus synchronous patent cases --Hyundai Electronics Industries Co. Ltd., Infineon Technologies AG, and Micron Technology Inc. -- cite the Mitsubishi case as upholding the JEDEC rule that pending patents must be disclosed to the body during the drafting of any standard.

Hitachi Ltd. raised the JEDEC anti-trust issue when Rambus sued it last year for alleged SDRAM patent infringement. The question was never resolved, as Hitachi signed an SDRAM licensing agreement and Rambus subsequently dropped all charges.

A similar case involving nondisclosure of pending patents caused the Federal Trade Commission in December 1996 to obtain a consent decree from Dell Computer Corp. agreeing not to enforce its patents on a VL bus line. The FTC charged that Dell failed to disclose its patents while a member of the Video Electronics Standards Association (VESA) when that body was drafting bus-line standards.

Are there other ways to resolve these patents?

The Micron-Smart Modular spat may soon be resolved. The group is now voting to remove the write-protect portion of the DRAM module standard, according to Kenneth McGee, staff chairman of the JEDEC memory committee.

"It''s not an essential part of the standard and was only included because Intel Corp. had included this spec as part of its own PC66 and PC100 module specification," McGee said. "To solve the patent issue with Micron, JEDEC will remove the write-protect spec from its DIMM standards."

Arthur Sarnia, project marketing manager at Smart Modular, said his company will simply deactivate the module pin that controls the write-protect feature. "The feature is not needed in modules and was swept up in the JEDEC spec without any thought," he said. "When it is removed from the JEDEC spec, it will no longer be an issue."

By: DocMemory
Copyright © 2001 CST, Inc. All Rights Reserved

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