Rambus to Attempt to Collect Royalties on Chipsets

Datafage writes "According to this article, RAMBUS is going to go after the manufacturers of all chipsets that interface with RAM, including Intel, AMD, Via, and presumably video chipset manufacturers in their relentless pursuit of royalties for their ill-gotten patents. This begs the question: Will they ever stop?"

Comments

Not untill they are stopped

[SquadBoy]

this is in some ways a bigger obstacle to growth than M$ ever was. I think it is about time that someone brought these "peoples" attention to the DOJ. Normally I don't advocate government intervention but in this cause the USPTO created the monster and now either they or the DOJ needs to bring it down. I don't know if it would hold up (IANAL) but the best case I can think of is that this is going to drive prices on something that has become central to the US economy through the roof. Aso really sounds to be like they are trying their best to be a monopoly. I don't really know. Anybody else have any good ideas?

Re:Not untill they are stopped

[atrowe]

Intel has already requested that the FTC investigate Rambus on the grounds of antitrust violations. The SDRAM standard was developed by Jedec, an open forum consisting of the worlds major semiconductor manufacturers, including Intel, Rambus, Hitachi and others. Considering Rambus' open participation in Jedec, I don't think their claims will have any grounds in a court of law considering the sole purpose of Jedec was to create an open forum with which to share and build upon new semiconducter technology.

Here's a link with some more info.

Once they tasted blood...

[LinuxGeek]

They just can't stop going after 'royalties' for their patents. It is interesting to see them turn on Intel now. Perhaps Intel will grow tired of their yapping and slap them down once and for good.

Something's got to snap...

[electricmonk]

Do I understand this correctly in that they are taking on an entire industry? This is a do-or-die situation for Rambus now. Either they win their lawsuits, own the entire industry, gain legitimacy and generally make their stockholders cream in their pants, or they lose everything and get laughed out of business. Right now, with the state of patent law, it looks like it could go either way, where in reality, it shouldn't really be a question at all.

Patents

[Anonymous Coward]

I patent this,
You patent that.
We patent the same,
in search of fame.
We neglect the consumer,
Greed becomes our leader,
and the people will rebel.

Even more telling is their SEC statement

[Brento]

If you read their latest earnings statement here, you'll notice something even more telling:

...no additional licenses for SDRAM-compatible ICs will be signed, that prices of RDRAMs will remain high compared to SDRAMs and that litigation and building costs will exceed the Company's plans.

They're perfectly aware that nobody else is going to license their chipsets, and they plan on suing anybody and everybody to make money.

Re:Even more telling is their SEC statement

[Alien54]

This is only going to burn through more of their cash, and make it even more difficult to have any market penetration at all.

Maybe they should read the old classic, "How to Make Friends and Influence People". Or maybe they have read this, and decided that that is the thing NOT to do.

Even Machiavelli (Gates) has more tack that this.

Re:Even more telling is their SEC statement

[retep]

The full statment is:

This release contains forward-looking statements regarding financial results for future periods. Actual results could differ materially. Among the factors which could cause results to differ materially is the possibility that the Pentium 4 and PlayStation2 ramps will be slower than expected, that shipment of Rambus ICs and other licensed products by Rambus licensees will be below forecast, that no additional licenses for SDRAM-compatible ICs will be signed, that prices of RDRAMs will remain high compared to SDRAMs and that litigation and building costs will exceed the Company?s plans.

It's just the disclaimer saying what *could* go wrong, not what is likely to go wrong. (though IMO in this case many of those things are quite likely to happen) So at the very least they aren't willing to publicly admit that they're screwed. Who knows, maybe they even believe it themselves. Sometimes people lie often enough that they start to believe their own lies...

What do they have?

[TheGeek]

Maybe I'm missing something here, but I always thought that once knowledge of the manufacture of a product became so widespread nearly anyone could make it (with the proper facilities), the patent was deemed unenforcable and was dropped.

Any patent attorneys in the crowd?

TheGeek

Re:What do they have?

[Brento]

The other option is keeping everything hush-hush, and trying to be the only one that does something by the others not finding out how. The latter hasn't been tried for decades.

Uh, what? I can think of a dozen examples from any industry off the top of my head: Microsoft undocumented API's, SDMI encryption, race car engines, search engine rankings, Intel's chip designs, Apple's hardware designs, you name it, everybody in business wants to keep their information secret to make money off it.

License fees are how you make money when you're unable to produce your product in sufficient quantities to satisfy consumers while maximizing revenues. If you can make enough products using your existing factories, then you keep the production information secret and just produce it all yourself.

The memory industry is the perfect example. Rambus couldn't afford to build the chip factories necessary to satisfy public demand for its chips. Therefore, they sold licenses to other companies who could afford to build the factories (or already had them). Wham, Rambus is in the memory business without building expensive fabs.

Re:What do they have?

[Detritus]

The other option is keeping everything hush-hush, and trying to be the only one that does something by the others not finding out how. The latter hasn't been tried for decades

Trade secrets are still used today.

A patent lawyer once told me that some companies prefer trade secrets to patents. Trade secrets don't expire after N years.

Re:What do they have?

[benmhall]

Actually, the "other option" you describe is called trade secrecy. It still happens all the time in industry. Not too much in the computer industry, but certainly in other areas.

Here's how Intellectual Property goes:

- Copyright (covers source and binary) lasts for 40ish years, and does NOT cover independant rediscovery. (So, company A copyrights something, company B "independantly" rediscovers it, all is okay. This is like MS making SMB and Samba implementing it from scratch.)

- Patent, as was described, you tell the world how you did it, the world has to license that for $$$
. Patents don't allow for independant rediscovery. So if a company gets a software patent (oh, like say Fraunhauffersp?) w/ MP3's) then even if you write your own you have to pay the original company.

- Trade Secrecy (Hide your work, hope no one figures it out)

There's also a special IP law for processors, giving a 10 year patent. Interestingly, software patents are a new thing. It used to be (up until the mid 80's iff I recall) that SW patents weren't allowed. They're still kinda questionable in Canada.

Patents were originally designed to promote innovation. Because they last 17-20 years, they effectively stiffle it in the software industry. Or at least that's my take.

Blah Blah Blah,

Ben

Re:What do they have?

[molog]

- Copyright (covers source and binary) lasts for 40ish years, and does NOT cover independant rediscovery. (So, company A copyrights something, company B "independantly" rediscovers it, all is okay. This is like MS making SMB and Samba implementing it from scratch.)

Actually copyrights last the lifetime of author plus 50 years or something like that, while if a company or corp has it, they only expire after 70 years.
Molog

So Linus, what are we doing tonight?

Re: What do they have?

[hwilker]

Usually, everybody working in a field is using the same basic physical laws, rules and processes - even in racing engines. The differences are marginal, which of course doesn't mean "unimportant" - especially in racing engines. The same applies to industrial production: using processes patented by sumebody else under license isn't that unusual; companies still make money by performing the process better, cheaper or faster than the competition. How to achieve this "better", "cheaper" or "faster" then is what is kept secret.

In the case of the Rambus patents, this seems to be impossible - it doesn't matter what and how you do it in detail, you have to pay regardless. This is unprecedented - it sounds like somebody getting a patent on fire and then extracting royalties from every manufacturer of internal combustion engines. Or like patenting the wheel...

Re:What do they have?

[mOdQuArK!]

The memory industry is the perfect example. Rambus couldn't afford to build the chip factories necessary to satisfy public demand for its chips.

Actually, it's more like they identified all those companies who were successfully producing (or soon to be producing) DDR memory chips, made sure that their patents were written in such a way so that those other companies would be violating them, then went after them with every lawyer they could purchase using their absurdly high capitalization. Their "attempt" at creating their own memory technology fell flat on its face, so now they're trying to survive by being a parasite on everyone else who has already done the hard work (WITHOUT Rambus's help).

Wham, Rambus is in the memory business without building expensive fabs.

You mean they're in the business of making money by lawsuit - they probably don't even need their engineers anymore, except as "expert witnesses".

intel's reponse

[zarqman]

of interest will be how intel will respond to this (and if they'll even be forced to). the article mentions that intel holds a stake in rambus. so, will rambus force the issue with intel at all, and if so, will intel simply start paying? i was sort of hoping that intel would resist and they have the money and clout to put up a big fight. but now i'm a little doubtful that will actually happen.

if we are all really that bothered by rambus, perhaps we need to find a way to deflate them. i am reminded of etoy.com's successful campaign against etoys.com.

# cat .sig

trash talk

[KarmaBlackballed]

How many reasons do you need to realize that the patents are wrong right down to the concept.

This is just another outragous result of the flawed thinking that intellectual monopolies are okay.

Re:trash talk

[god, did I say that]

This isnt insightful, this is idiotic. They may seem wrong to _you_ but that's only because you have neither the capacity to invent anything, nor the capacity to think intellectually about something that doesnt lie immediately before your nose.

Patents are meant to protect the inventor against pilfering (usually much bigger) competitors. If MegaCorp Inc. wants to make use of Joe Bloe's process of extracting logic from /. morons, then MegaCorp Inc. has to pay Joe Bloe. If you find this unacceptable, be prepared to live in a society where the only technological innovation is MegaCorp's self interested, self serving inventions.

Nothing is perfect but as it stands today, patents remain the single proven method for introducing competitive ideas into society. In fact, merely the fact that someone holds a patent on something is inducement for someone else to come up with something better. Until you come up with something better, "patents are wrong right down to the concept" is moronic drivel.

If RAMBUS can demonstrate their claims, then RAMBUS _should_ be awarded royalties. Why the fuck not? Are you such a fan of intel/nvidia/whatever that you believe they should get that money instead? I personally dont care where the money goes but I feel a lot better if _all_ deserving parties get their share.

--

This is sick

[Phokus]

Rambus should just go ahead and try to patent copper. It should be obvious that our patent system DOES NOT WORK right now.

RAMBUS must die.

[Alcoholist]

RAMBUS has a seemingly endless supply of vague patents to sue technology companies over. Every time they win a case because of stupid US patent law, they gain the confidence and precedent to continue to come up with bolder schemes to suck even more money from technology companies.

This is exactly what happens when the staff of a technology company is 50% lawyers. I suspect that this is only the beginning of a era of corporations who produce nothing, design nothing, contribute nothing, but profit from continuous litigiousness, all because of stupid US law and legal practice.

It's a huge blow to progress in general (RAMBUS RAM is a good example). Someone has to stop this kind of thing before dozens of companies are all trying the same thing, wrecking the technology market because of greed.

Re:RAMBUS must die.

[Azog]

I wonder...

What if every significant computer hardware company, including Intel, AMD, VIA, NVidia, Micron, IBM, 3Com, Sony, National Semiconductor, etc. etc. simultaneously launched separate lawsuits against RAMBUS?

"For what cause", you ask? Well, something.... maybe fraud, or deceptive business practicies, or whatever...

The idea would just be to scare the investors so badly that Rambus's stock price would fall through the floor. Rambus probably has more lawyers then engineers on staff, and fighting a dozen lawsuits, plus all the bad PR they would get would make the company very unattractive to investors.

Then Intel (or whoever) could buy up all the stock for cheap, shut them down, and give away free licenses to the patents to all the other companies bringing lawsuits to "settle out of court".

Hey presto, no more RAMBUS problem. The only catch is, this would probably be illegal.


Torrey Hoffman (Azog)

Re:RAMBUS must die.

[Chris Johnson]

You're assuming that if Intel bought up everything, they would then act any differently from how RAMBUS is acting.

The problem isn't with one specific corporation. It is a dreadful interaction between a corporation and a legal situation and could happen with any of them, given the initial sleaziness to produce the Intellectual Property at dispute here.

I could make a case that if Intel owned these patents they would be obligated under fiduciary duty to press them as far as they will go, just like RAMBUS. Perhaps without the desperation (that's from RAMBUS's miserable business case) but with the same basic result.

Intellectual Property simply doesn't mesh with a fast-paced, innovative industry. This is only the beginning. Assuming that the laws aren't radically revamped- I'd have to recommend nobody attempt to work in the field. The future is like this but more so. The only bright side is- for so many useful things (including Linux) you don't actually _need_ new tech and innovation... you can use old kit and make do. This is quite unglamorous- but it's going to be harder and harder to be on the cutting edge technologically, because of legal challenges- I think it will become impossible for private individuals. That's just my personal opinion.

Re:RAMBUS must die.

[Azog]

... Their own report says they have enough cash for 12 months of operations. RAMBUS needs to keep having people pay it royalties to stay alive. I suppose if a lot of the memory makers refuse to pay, get injunctions to back that up, then drag out the case for a couple of years they could really put the hurt-lock on the RAMBUS, perhaps even drive it out of business.

Yeah, your idea is better than mine. It's more likely to happen, and legal too.

But as another reply to my first comment said, even if they go out of business, their patent portfolio will probably end up purchased by some other company which might try to do the same aggressive things with it. But if it was a large, non-desparate company, like IBM, things would probably be better than they are now.

Of course the best solution is to reform patent law. And copyright law while we are at it...

However, I think reform of intellectual property laws is unlikely to happen any time soon. I've seen predictions that due to the closeness of the election and the distribution of seats in congress, not much is likely to get done for the next four years. Also, the US has signed world wide copyright treaty and trade legislation laws which might make changes difficult here - a really good reform of patent law might violate some treaty or something.

Under those circumstances, I think the best short term solution would be for Rambus to die and for IBM to buy their patents.

Torrey Hoffman (Azog)

JEDEC / open standards

[DigitalSorceress]

What really bugs me is the bit about how Rambus participated in open standards meetings and apparently took part in creating those standards without mentioning its patents to anyone... the Conspiracy Monger in me has a new way to get rich:

1. get the patent on something but be quiet about it
2. Sit in on an open standards panel, and sprinkle in a few bits and pieces of your patented ideas
3. Wait until the standard becomes universally accepted and that everyone assumes its safe to use the information because it's a standard
4. (and this is the twisted bit) Make a shocked public announcement that this standard has used ideas that you have patented and sue everyone in site

Ahh, I see it all so clearly. now, all I need is a terriffic idea, a patent, enough status to be asked to participate on a standards panel, and a team of lawyers.

+++++++++++++++++++++

Their strategy is obvious.

[AFCArchvile]

File patents that would apply in almost every microcontroller design, attempt to make a better RAM technology, and when that fails, start filing patent infringement lawsuits.

I hope that these morons get beaten at their own game. There's no nullification quite like having a judge call your company a legion of whining carpetbaggers.

I see more litigation ahead.

[AFCArchvile]

In two years, I'll be taking a class on microcontroller design. Does this all mean that soon I'll have to pay a Rambus tax just to buy my textbook? I hope not, because I want to build a better sound card (and hopefully oust Creative from their monopolistic throne), and I don't want to have Rambus leeching from my funds.

All I can do right now is hope that the combined wrath of Intel, AMD, and VIA will send Rambus into the pits of hell (or maybe the front page of f*ckedcompany.com).

Anyone live near these guys?

[FFFish]

Do feel free to take out in the back alley and, ah, solve the Rambus problem for us all, once and for all...

--

Rambus as Intel puppet?

[CrazyRabbit]

If you read the whole article, you'll notice that Rambus and Intel are still sleeping together (Intel still holds a share in Rambus.) Is this a sort of "good cop, bad cop" kinda thing? Rambus makes a monopoly grab for anything that moves an electron, and Intel is quietly excluded from paying the royalties... Big business is out of control.

How did Rambus ever get these patents?

[msobkow]

In 1985/86 my 400 series VLSI design course at university involved leading and trailing clock edge triggers (rising/falling signals.) The use of both edges to effectively double performance was a standard practice, and documented in the textbooks that were printed even earlier.

The rather extreme efforts of Cray Research to balance signal paths in order to allow increased clock speed without loss of signal coherency was also studied.

I don't see anything in the Rambus patent descriptions that don't fall back to common design techniques in use over 10 years ago.

I don't get it. Why isn't Rambus in court on charges of theft or fraud? They claim ownership of design principles that are not only normal practice, but that were created over a decade before their company existed!

Re:How did Rambus ever get these patents?

[Ektanoor]

Rambus is nothing more than the most successful patent hijacker. How can they be so successful on harassing every company on the market? I have an opinion on how they did it...

They have a close look on what the big gamers are doing, besides they are not just outsiders but people trying to create also their own computer memory device. I wonder if, in base of projects and their insiders knowledge, they filled the right patent claim in the righ moment. As these designs take years to come out to market then it will be understandable how we are seeing a timeline discrepancy between patent fillings and the when such devices came into market. At least one thing that troubles me is that they have claims on such a thing like RDRAM which started rotting while green. Maybe they patented it too early to avoid concurrency?

Re:How much do these lawsuits really make?

[HiyaPower]

It is only the foreign DRAM fabricators that have do so to date. These folk figure that it is easier to buy Rambust off than find their entire output to the US embargoed. AMD and INTEL as US firms have less to fear on this score. I will note in passing that AMD won every suit that INTEL filed against it, so their legal staff is not slouch. This is the Phoenix bios gambit in spades. Rambust doesn't have a product that will justify its absurd valuations in the market. The only way that they can have their stock held up in the never-never land is to try and get folks to cave on these royalty arrangements. If Rambust loses in court, they are stuck with an interesting but obscure memory product with all the future of bubble memory. They will thus be out of biz. If they win then they can stay in business. I would love these cases to go before Judge Harris. Its what this sort of bad faith frivolous crap deserves.

Late breaking news...

[jmv]

A technology company called "RAMBUS" is claiming to have a patent on DNA. This parent has just been approved by the USPTO.

The company has set its licensing fee to $1 for each DNA string, but offers a quantity rebate and at $10M per individual. The company CEO has been quoted saying "We will protect our IP and will go after any offender". RAMBUS has already asked for a restraining order against 100 million people and will ask the judge to restrain them from using DNA.

When asked the reason for its sudden interest in nuclear technology, a RAMBUS official said: "This is in the line of protecting our IP and making people know we're serious about it. Remember, living free is stealing".

Re:Late breaking news...

[Barbarian]

It might sound funny, but I bet if you patented RNA, which most people haven't heard of, but which is important in cell division, you could get a judge to issue a preliminary injunction.

--

Re:Late breaking news...

[mpe]

A technology company called "RAMBUS" is claiming to have a patent on DNA. This parent has just been approved by the USPTO.

Unfortunatly they were unavailable for comment after serveral bio-labs sent them samples to prevent patent infringment :)

Re:Late breaking news...

[mpe]

It might sound funny, but I bet if you patented RNA, which most people haven't heard of, but which is important in cell division, you could get a judge to issue a preliminary injunction.

Actually RNA is responsible for protin sythtesis rather than cell devision. Anyway better to patent ATP, in sufficently broad terms to cover ADP and DNA. You'd also get higher royalties, per person, than 10M USD even if you started at 0.01 USD per molecule.

they're all playing the same game

[will]

It's all shades of rather dark grey. to me. Like the microsoft trial, i'd feel a lot more sympathetic for the poor victims if they weren't a) voracious transnationals and b) kicking themselves that they didn't think of doing it first.

by the way,

> They accuse Rambus of subverting the Joint
> Electron Device Engineering Council (JEDEC)
> process when the company kept its patents on
> SDRAM secret while attending JEDEC meetings
> intended to establish an open industry standard.

Can anyone throw more light on this? I haven't hear the jedec part before. Sounds tangential to the patent question, at best, but it's worthy of Bismarck, or at least Nixon, if true.

Re:they're all playing the same game

[overshoot]

> They accuse Rambus of subverting the Joint
> Electron Device Engineering Council (JEDEC)
> process when the company kept its patents on
> SDRAM secret while attending JEDEC meetings
> intended to establish an open industry standard.

Can anyone throw more light on this? I haven't hear the jedec part before. Sounds tangential to the patent question, at best, but it's worthy of Bismarck, or at least Nixon, if true.

JEDEC's patent policy is that if a participating company holds IP which covering a proposed standard, the company

• Must disclose that fact to the committee, and
• Must declare its intention to licence the IP for reasonable and non-discriminatory terms.

JEDEC members acknowledge this policy as a condition of membership, and the policy is announced at the open of each committee meeting.

Rambus actually went quite a bit beyond this, though, since it appears that what they did was attend the meetings, where they found the direction that the industry was going. At that point, they went back and rewrote some abandoned patent applications to cover the proposed SDRAMs.

Re:See? There are companies worse than Microsoft!

[cyber-vandal]

Only because they've got Linux snapping at their heels. I doubt Win2K would have been anything like as good otherwise, and it still has problems in my experience, such as the need to completely redesign your network if you want to take full advantage of it.

I think it would be great...

[ca1v1n]

...if Intel divests all of its Rambus shares. Throw them out in the gutter. Even the threat of such a divestiture would have the whole board at Rambus quaking in their boots. It would maim their stock value, and drastically reduce market confidence.

Not so different from Qualcomm

[Seenhere]

Right, Rambus's business model is primarily to own technology patents, and get a revenue stream from licensing them; only secondarily to actually produce any instances of the technology.

They're not the only one. For example, Qualcomm is doing the same thing, with considerable success.

And arguably Qualcomm's patents were issued in the face of prior art as well; CDMA had been used in military communications for some time. The U.S. isn't about to "fix" this, since it's a place that U.S. companies have an edge. Welcome to 21st century high-tech big business.

And by the way, Taco, "beg the question" doesn't mean "invite the question". If you had taken a philosophy course at Hope College you would know that :).

--Seen

Rambus is ASKING Intel to buy them out

[Deathlizard]

What do you think Intel, A multibillion company with money to burn, is going to do once they get hit with these royalities. Keep in mind that Intel is not too happy at Rambus right now, especially becasue they will not reliquinsh the royalities so manufactures would more redily produce RDRAM for the P4.

When this is all said and done, Intel is going to end up buying out Rambus and releasing all the Rambus specs royality free. Why? The reason for this is obviously that if RDRAM suddently gets cheaper and more redily avaliable Intel has a lot to gain in the form of chipset and processor sales. Especially when their the only ones working with Rambus right now

--

Expropriation

[iskander]

The expropriation of Rambus's patents is a perfectly viable option. Just as individuals had to give up their junk at a fair price during World War II so that war production could proceed, and just as farmers must often part with land today so that public works may proceed (dams, roads, whatever), Rambus could be forcibly divested of its patents so that the evolution of computer hardware can proceed with proper regard to technical merit, which is ultimately in everybody's interest. The only legitimate obstacle I foresee is that the relevant people in the US government lack the cojones to do it; they would have to move resolutely and unapologetically, but they will not. (Before dismissing that last statement, you should take a moment to read the Wired story on the Microsoft antitrust trial.)

next they'll go after software...

[Barbarian]

Next they'll go after companies which make Software which use a lot of RAM....

LINUX companies will get away with $5 per copy sold commercially. Microsoft will have to pay $100 per copy for Windows ME because of the huge memory footprint required to boot.
--

The poodle that attacks the bear.

[bgarcia]

Rambus is about to become somebody's lunch.

I would imagine that some of these companies <cough>Intel</cough> have pretty decent patent portfolios themselves. But other companies tend to keep them for defensive purposes only. I'm willing to bet that Intel probably has a handful of patents that Rambus is violating.

At the very least, Intel can probably dig up a couple of patents that Rambus appears to be violating, and take Rambus to court over them, and drive Rambus into the ground due to court costs alone.