FTC presents opening arguments in Rambus antitrust case

FTC presents opening arguments in Rambus antitrust case
By Jack Robertson , EBN
April 30, 2003 (10:34 p.m. EST)
URL: http://www.eetimes.com/story/OEG20030430S0045

WASHINGTON — The Federal Trade Commission and Rambus Inc. clashed Wednesday (April 30) over whether the IP firm attempted to use its SDRAM patents to unfairly lay claim to an open industry SDRAM standard or is entitled to receive royalty payments for what Rambus claims is a legitimate invention.

At the opening day of an FTC antitrust hearing here, the two sides squared off over whether Rambus was required to disclose pending synchronous memory interface patent applications to the JEDEC industry panel when Rambus sat on a JEDEC subcommittee to define an open SDRAM standard.

The FTC charged that Rambus tried to "monopolize" JEDEC SDRAM and DDR SDRAM standards by waiting until industry specifications "had been locked in" before disclosing its SDRAM patents.

Geoff Oliver, an attorney for the FTC, argued that the entire industry infrastructure of DRAM, chipset, and motherboard suppliers, computer makers, and test equipment companies had de signed and validated their products to conform to the JEDEC standards. Oliver claimed that Rambus then co-opted the industry SDRAM and DDR standards by asserting its patent claims after the standard was ratified.

In presenting the FTC's claims, Oliver said Rambus deliberately hid its pending patents from JEDEC while participating in SDRAM standard deliberations in an effort to ensure that the industry would commit to manufacturing products before demanding royalties.

Greg Stone, an attorney representing Rambus (Los Altos, Calif.), countered that the firm was seeking to collect royalties from all DRAM makers because its synchronous memory interface IP "resulted from superior skill" that included technology covered by the company's original 1990 patent.

"All DRAM manufacturers today use some of the technology in the original patent," Stone said. Sean Royall, another FTC attorney, said in today's hearing that during the four years Rambus was a member of JEDEC the firm was privy to industry SDRAM technical presentations and then later amended its earlier patent to include many of the same technologies.

Royall specifically 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.

In defending Rambus' actions, Stone countered that it was JEDEC that took Rambus' 1990 patent and used the description of the synchronous memory interface to devise what eventually defined the open industry SDRAM standard.

Stone charged that DRAM makers "were slow in developing a new generation DRAM" to compete with Rambus' proprietary memory interface, known as Rambus DRAM (RDRAM), and were forced to adopt much of the original patent invention to come up with the JEDEC SDRAM and DDR standards.

Rambus and the FTC also locked horns over Rambus' alleged failure to disclose its SDRAM patents when it participated in J EDEC SDRAM standards deliberations from 1992-1996. The FTC's Royall cited internal company documents that he said demonstrated Rambus was aware of the possibility that its patents could be declared unenforceable if it was found that their existence was kept from JEDEC during the standards process.

Rambus' Stone retorted by citing the patent policy manuals of JEDEC and its parent, the Electronic Industries Alliance (EIA), in addition to memos written by JEDEC. Stone said the JEDEC regulations did not require members to disclose patent applications except in certain instances when companies made technical presentations during JEDEC meetings.

He 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 makers might rush to file their own patent applications ahead of their competitors. In particular, Stone said that IBM Corp. and certain other JEDEC panel members told the standards body directly that they would not disclose any patent applications.

The FTC's Oliver argued that the failure of some JEDEC members to disclose their patent applications did not excuse Rambus of its responsibility. "This does not justify Rambus' violation of antitrust laws," he said.

As part of its opening arguments, the FTC legal team reiterated previous charges that Rambus in 1998 destroyed large volumes of documents and claimed that the company "was intent on getting rid of harmful evidence." Royall said Rambus kept no inventory of destroyed documents.

In pretrial briefs, Rambus argued that the 1998 document house cleaning was undertaken as part of a normal industry practice of document retention.

The FTC hearing is expected to continue for six to eight weeks. Chief Administrative Law Judge Stephen McGuire will render a decision, which will then be sent to the full commission for a final determination.