Rambus - Lawsuits

Lawsuits

In the early 1990s, Rambus was invited to join the JEDEC. Rambus had been trying to interest memory manufacturers in licensing their proprietary memory interface, and numerous companies had signed non-disclosure agreements to view Rambus' technical data. During the later Infineon v. Rambus trial, Infineon memos from a meeting with representatives of other manufacturers surfaced, including the line "ne day all computers will be built this way, but hopefully without the royalties going to Rambus", and continuing with a strategy discussion for reducing or eliminating royalties to be paid to Rambus. As Rambus continued its participation in JEDEC, it became apparent that they were not prepared to agree to JEDEC's patent policy requiring owners of patents included in a standard to agree to license that technology under terms that are ‘reasonable and non-discriminatory’, and Rambus withdrew from the organization in 1995. Memos from Rambus at that time showed they were tailoring new patent applications to cover features of SDRAM being discussed, which were public knowledge (JEDEC meetings were not considered secret) and perfectly legal for patent owners who have patented underlying innovations, but were seen as evidence of bad faith by the jury in the first Infineon v. Rambus trial. The Court of Appeals for the Federal Circuit (CAFC) rejected this theory of bad faith in its decision overturning the fraud conviction Infineon achieved in the first trial (see below).

In 2000, Rambus began filing lawsuits against the largest memory manufacturers, claiming that they owned SDRAM and DDR technology. Seven manufacturers, including Samsung, quickly settled with Rambus and agreed to pay royalties on SDRAM and DDR memory. In May 2001, Rambus was found guilty of fraud for having claimed that they owned SDRAM and DDR technology, and all infringement claims against memory manufacturers were dismissed. In January 2003, the CAFC overturned the fraud verdict of the jury trial in Virginia under Judge Payne, issued a new claims construction, and remanded the case back to Virginia for re-trial on infringement. In October 2003, the US Supreme Court refused to hear the case. Thus, the case returned to Virginia per the CAFC ruling.

In January 2005, Rambus filed four more lawsuits against memory chip makers Hynix Semiconductor, Nanya Technology, Inotera Memories and Infineon Technology claiming that DDR 2, GDDR 2 and GDDR 3 chips contain Rambus technology. In March 2005, Rambus had its claim for patent infringements against Infineon dismissed. Rambus was accused of shredding key documents prior to court hearings, the judge agreed and dismissed Rambus' case against Infineon. This led Rambus to negotiate a settlement with Infineon, which agreed to pay Rambus quarterly license fees of $5.9m and in return, both companies ceased all litigation against each other. The agreement runs from November 2005 to November 2007. After this date, if Rambus has enough remaining agreements in place, Infineon may make extra payments up to $100m. In June 2005, Rambus also sued one of its strongest proponents, Samsung, the world's largest memory manufacturer, and terminated Samsung's license. Samsung had promoted Rambus's RDRAM and currently remains a licensee of Rambus's XDR memory.

In May 2002, the United States Federal Trade Commission (FTC) filed charges against Rambus for antitrust violations. Specifically, the FTC complaint asserted that through the use of patent continuations and divisionals, Rambus pursued a strategy of expanding the scope of its patent claims to encompass the emerging SDRAM standard. The FTC's antitrust allegations against Rambus went to trial in the summer of 2003 after the organization formally accused Rambus of anti-competitive behavior the previous June, itself the result of an investigation launched in May 2002 at the behest of the memory manufacturers. The FTC's chief administrative-law judge, Stephen J. McGuire, dismissed the antitrust claims against Rambus in 2004, saying that the memory industry had no reasonable alternatives to Rambus technology and was aware of the potential scope of Rambus patent rights, according to the company. Soon after, FTC investigators filed a brief to appeal against that ruling.

On August 2, 2006, the Federal Trade Commission overturned McGuire's ruling, stating that Rambus illegally monopolized the memory industry under section 2 of the Sherman Antitrust Act, and also practiced deception that violated section 5 of the Federal Trade Commission Act.

February 5, 2007, U.S. Federal Trade Commission issued a ruling that limits maximum royalties that Rambus may demand from manufacturers of dynamic random access memory (DRAM), which was set to 0.5% for DDR SDRAM for 3 years from the date the Commission's Order is issued and then going to 0; while SDRAM's maximum royalty was set to 0.25%. The Commission claimed that halving the DDR SDRAM rate for SDRAM would reflect the fact that while DDR SDRAM utilizes four of the relevant Rambus technologies, SDRAM uses only two. In addition to collecting fees for DRAM chips, Rambus will also be able to receive 0.5% and 1.0% royalties for SDRAM and DDR SDRAM memory controllers or other non-memory chip components respectively. However, the ruling did not prohibit Rambus from collecting royalties on products based on (G)DDR2 SDRAM and other JEDEC post-DDR memory standards. Rambus has appealed the FTC Opinion/Remedy and awaits a court date for the appeal.

July 30, 2007, the European Commission launched antitrust investigations against Rambus, taking the view that Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents which it later claimed were relevant to the adopted standard. This type of behaviour is known as a "patent ambush". Against this background, the Commission provisionally considered that Rambus breached the EC Treaty's rules on abuse of a dominant market position (Article 82 EC Treaty) by subsequently claiming unreasonable royalties for the use of those relevant patents. The Commission's preliminary view is that without its "patent ambush", Rambus would not have been able to charge the royalty rates it currently does.

On March 26, 2008, the jury of the U.S. District Court in San Jose determined that Rambus acted properly while a member of the standard-setting organization JEDEC during its participating in the early 1990s, finding that the memory manufacturers did not meet their burden of proving antitrust and fraud claims.

On April 22, 2008, the U.S. Court of Appeals for the D.C. Circuit overturned the FTC reversal of McGuire's 2004 ruling, saying that the FTC had not established that Rambus had harmed the competition.

On April 29, 2008, the Court of Appeals for the Federal Circuit issued a ruling vacating the order of the United States District Court for the Eastern District of Virginia, saying the case with Samsung should be dismissed, saying Judge Robert E. Payne's findings critical of Rambus, were on a case that had already been settled, and thus had no legal standing.

On January 9, 2009, a Delaware federal judge ruled that Rambus could not enforce patents against Micron Technology Inc., stating that Rambus had a "clear and convincing" show of bad faith, and ruled that Rambus' destruction of key related documents (spoliation of evidence) nullified its right to enforce its patents against Micron.

On February 23, 2009, the U.S. Supreme Court rejected the bids by the FTC to impose royalty sanctions on Rambus via anti-trust penalties.

In July 2009, the United States Patent and Trademark Office rejected 8 claims by Rambus against Nvidia.

On November 24, 2009, the U.S. Patent and Trademark Office (PTO) rejected all 17 claims in three Rambus Inc. patents that the company asserted against Nvidia Corp. in a complaint filed with the U.S. International Trade Commission (ITC). However the ITC has announced that out of five patents, Nvidia did violate three of them. Due to this ruling Nvidia is facing a US import ban on some of its chips. The chips facing the US import ban are used in the nForce, Quadro, GeForce, Tesla and Tegra series graphics products, nearly every video card type manufactured by Nvidia.

On June 20, 2011, Rambus went to trial against Micron and Hynix in California, seeking as much as $12.9 billion in damages for “a secret and unlawful conspiracy to kill a revolutionary technology, make billions of dollars and hang onto power,” Rambus lawyer Bart Williams told jurors. Rambus lost on Nov 16, 2011 in the jury trial and its shares dropped drastically. Rambus fell as much as $14.04 to $4.00

On November 16, 2011, Rambus lost the antitrust case against Micron Technology and Hynix Semiconductor. The San Francisco County Superior Court jury ruled against Rambus in a 9-3 vote. In a statement posted on the company's website, Rambus CEO Harold Hughes said: "We are reviewing our options for appeal.".

On January 24, 2012, a USPTO appeals board declared the third of three patents known as the "Barth patents" invalid. The first two had been declared invalid in September 2011. Rambus had used these patents to win infringement lawsuits against Nvidia Corp (NVDA.O) and Hewlett-Packard (HPQ.N).