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Government Brings Antitrust Actions Against Rambus, Micron
A Happy Plague writes "I work at a hedge fund and one of the nice ammenities are real time news tickers. At 11:34 EDT, a nice red line scrolled on my screen.."FTC Alleges Rambus Violates Antitrust Laws". The headlines followed..."...Anticompetitive Acts... Deceived standard setting organization...never acknowledged patents... deceptive conduct..."
Too bad it takes a long time fo bureacracies to work, but they usually come around. Yahoo News has the story." Of course all rambus has to do now is buy a president to get out from under this. In related news, Tricot writes "Over at Salon, there is a newswire article claiming that the justice department is investigating memory chip maker Micron for anti-competitive practices. Wow, if it's a monopoly, then it certainly hasn't hurt prices."
Anyone who hides patents and patent applications in order to deceive their fellow members, "working" with them to create a new memory standard, just to throw their weight several years down the line claiming everybody is infringing on those patents, deserves such a huge fine that the only memory they will be able to afford will be Post-it notes stuck to their PCs.
Tongue-tied and twisted, just an earth-bound misfit, I
Learning to fly, Pink Floyd.
This is what they are saying Rambus's actions caused: (quoting the official FTC release) increases in the price - and/or reductions in the use or output - of SDRAM chips, as well as other products incorporating or using SDRAM technology
decreased incentives, on the part of memory manufacturers, to produce memory using SDRAM technology;
decreased incentives, on the part of memory manufacturers and others, to participate in JEDEC or other industry standard-setting organizations or activities;
and both within and outside the memory industry, decreased reliance, or willingness to rely, on standards established by industry standard- setting collaborations.
Moderation: Put your hand inside the puppet head!
Micron Technology Inc., one of the nation's biggest maker of computer memory chips, said it, and other companies, are being investigated by the Department of Justice for alleged "anticompetitive practices."
the key part is "it, and other companies" I firmly belive that micron will not be involved as a defendant, but as a witness and support of the FTC seeing how they pretty much told RAMBUS to eat their shorts and got the FTC involved in the first place.
No, no, no... the anti-trust investigation has nothing to do with RDRAM.
It has everything to do with SDRAM and DDR.
Rambus was part of the JEDEC back when SDRAM standards were being developed. They withdrew shortly after the standards were being seriously discussed, but (allegedly) not before suggesting certain methods of doing things... which as it turns out they have patents on.
Part of being involved in JEDEC, as with most standards bodies, is playing fair. You don't recommend that a standard adopt a method that you own the patent on unless you have fully disclosed that patent and have agreed to reasonable licensing terms. Rambus didn't do this. That's the crux of the lawsuit. And they're pretty well screwed here - Dell tried this many years ago and got toasted - their patents were ruled invalid because of exactly the same thing.
RDRAM doesn't come into play. DDR does because DDR uses a lot of the same technologies that SDRAM does, which is where Rambus has its patent claims. Rambus allowed the standard(s) to be set, manufacturing to occur for a few years, and then served papers to every memory maker out there - telling them to either pay a royalty on these undisclosed patents or go to court for infringement. What amazes me is how many of the memory makers rolled over and played dead - only Micron, Infineon, and Hynix refused and counter-sued Rambus.
Rambus probably would still exist even without these patents, simply because of the inane deal that Intel upper management signed a few years ago. They're finally working their way out of that boondoggle... of course, in the meantime AMD has gained market presence largely due to that mistake.
Of course all rambus has to do now is buy a president to get out from under this.
/. geek would prefer that he did?
Isn't it a tad irresponsible to accuse Bush of being "bought" by Microsoft because his administration is hesitant to interfere with market forces -- even when your typical
Republicans are normally slower to jump on the antitrust bandwagon. Accusations of impropriety are just way out of line, though.
Why are you letting these clowns ruin our country?
Uh, excuse me? What does President George W. Bush have to with RAMBUS much less the Microsoft case from this link? President Bush appointed the first African American, Charles James, to head the antitrust division of the Justice Department. Assistant Attorney General Charles James never has said that Microsoft should get away scott free, he just disagrees with breaking up Microsoft into two monopolies from one. His solution is to penalize Microsoft and force them to adopt different business practices that would remove barriers to competition from outside companies on their operating system.
There is no need for these sort of comments on Slashdot story briefs. AAG Charles James has a long history of serving this country through its court system and to have a partisan sniper misrepresent his opinion in such a blatant fashion is repugnant. I don't know if its racism or just pure hatred towards the current administration that would allow this sort of misrepresentation to be published. It would be nice if Slashdot editors would review these submissions before they are posted and depolitise them.
Strange women lying in ponds distributing swords is no basis for a system of government.
Extreme Patents Bad
MPAA Bad
RIAA Bad
EFF Good
Free Speech Good
Video Games Good
Open Source Good
I am completely okay with you disagreeing with my analysis of the purchasability of George Bush, but to say that /. should be unbiased in it's coverage is to ignore the history and goals of slashdot. And to assume a default democratic bias is in my opinion unfounded, I mean, look at our criticism of Idiot Senator Hollings a senator so completely purchased that he must have a barcode tattooed on his forehead.
chrisd
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
I completely disagree. The reason we see this kind of behaviour is that the company is punished and the individuals that make these decisions are not directly punished.
The solution is to find the person or people who made these decisions and prosecute them in a criminal court for the crimes (i.e. extortion, fraud) they have commited.
As long as we only levy punishment at the company as a whole, those individuals at the top who make these decisions are going to get off scott free and continue to engage in these behaviors. Put one of these bastards behind bars for as long as he actually deserves, and the next one will think twice before engaging in this kind of behavior. People (not companies, not guns, not computers, not books, and certainly not ideas) commit crimes and people should be punished.
They withdrew shortly after the standards were being seriously discussed, but (allegedly) not before suggesting certain methods of doing things... which as it turns out they have patents on.
Actually, to my knowledge, nobody has ever alleged that Rambus tried to steer JEDEC towards Rambus-patented technologies. Instead, Rambus remained silent while technologies were being discussed at JEDEC meetings that could infringe on its patents and even amended its patent applications to cover things being discussed at JEDEC meetings. In addition, Rambus didn't bail out of JEDEC until 1996, when its first SDRAM-applicable patents were finally issued.
At one point during a JEDEC meeting, Rambus was asked point-blank if it had any patents pertaining to "two-bank designs." Rambus's representative merely shook his head no. Rambus actually had patent applications pending regarding two-bank designs and the representative who was asked about it knew this. Rambus later attempted to defend its silence on the topic by saying it believed it only needed to disclose patents that had already been issued, not pending ones. JEDEC's president says that Rambus is the only JEDEC member ever to misinterpret the patent rules in this way.
For anybody looking to read the whole unseemly story of Rambus and its unparalleled greed, Fortune Magazine has the definitive article on the subject.
The Micron story: First, the DOJ did not bring an action against Micron today. Rather, they sent a subpoena to Micron, seeking information for an investigation into possible anti-competitive behavior in the DRAM market.
/. posts make it out to be. For one thing, Rambus claims that they didn't run afoul of the JEDEC policy requiring attendees to disclose relevant patents, because they did not yet have the patents which they later accused everyone of infringing. What makes the whole thing really complicated is that these "SDRAM patents" were not new patents either, but rather extensions of a previous Rambus patent on RDRAM, which Rambus did have at the time. Basically, patent law definitely allows you to file an extension of an old patent which makes clear that a new product infringes your original invention even if it may not infringe the original patent. How this intersects with the requirement to disclose patents to standards bodies is rather cloudy. As we know, Rambus got convicted of fraud for this--probably helped by documents at trial which pretty much proved Rambus had this plan in mind all along. However the issue is currently on appeal. IMO the Appeals Court's decision on this issue will determine what happens with this FTC claim filed today.
This has nothing to do with Micron (with global DRAM marketshare of ~18%) having a "monopoly" in the DRAM market; indeed, in addition to Micron, Infineon and Samsung (and probably others) recieved subpoenas today as well. While the DOJ has not made any public statements about this (that I've seen), it is extraordinarily obvious to anyone who has followed the DRAM industry over the past year or so that they are investigating allegations of dumping on the DRAM spot market. In particular, the spot price for DRAM (128 Mbit SDRAM chips in particular) declined by something like 75% last fall, in the absence of major new supply or significant shortfalls in demand. The resulting price was well below even the marginal cost of producing these chips.
When the price suddenly shot back up a few months ago with the announcement that Micron had reached a tentative deal to buy the already-bankrupt Hynix, it became quite clear that the spot market price was being kept artificially low in order to try to force the ailing Hynix out of business. (The Micron-Hynix deal was later rejected by Hynix's board, causing--wouldn't you know it--another DRAM price war.) The whole thing was made even more fishy by the fact that DRAM contract prices (that is, the DRAM sold in monthly contracts to OEMs like Dell, HP, etc.) stayed way way higher than the spot prices; Hynix was mostly limited to the spot market in its attempts to desperately sell off excess inventory to try to raise cash to pay off their creditors (after all, who wants to sign a contract with a company on the verge of bankruptcy??).
The obvious conclusion is that the other memory makers (Samsung and Micron are #1 and 2 in marketshare) dumped excess inventory on the spot market or even purposely sold at worse prices than they could otherwise get, in an effort to drive Hynix out of business sooner and thus reduce supply and cause prices to be higher than before. By itself, this is probably not illegal, because none of them has a monopoly. What would be illegal is if any of them colluded to keep the spot price artificially low. If they did that, they would be guilty of forming an illegal trust (that's why it's called anti-trust law, not "anti-monopoly") and engaging in illegal dumping or even price-fixing. Personally I would be surprised if this did not occur, but we'll see if the DOJ can find enough concrete evidence to bring a claim.
[For those wondering how the DRAM market turned out--spot prices are way down again across the board, although 128Mbit SDRAM is not nearly as low as it got last fall. (256Mbit and DDR chips are close to record lows, though.) The difference now is that contract prices have finally come down to near-spot levels (in a normal market, contract prices are lower than spot levels), and, considering the recent warnings by Intel and AMD, it looks as if low demand may actually be to blame, not price-fixing.]
The Rambus story: The short version of events posted here is more or less right: Rambus was a member of JEDEC while the SDRAM standard was being worked on; Rambus did not disclose any patents they had which read on the SDRAM design being discussed, nor did they disclose any intent to seek royalties on the standard; later, after SDRAM was standardized and became the mainstream DRAM type, Rambus sought royalties from anyone producing SDRAM or an SDRAM memory controller, which is to say almost the entire worldwide electronics industry. (Also DDR, which according to Rambus not only infringes their SDRAM patents but also a couple others on double-clocked operation in a DRAM.)
Some memory producers (including Samsung and Elpida) agreed; others (specifically Micron, Infineon and Hynix) refused and were taken to court. (The threatened legal action regarding SDRAM controllers never really happened because Rambus was focusing on memory producers first.) In the first such case to come to trial, in which Rambus sued Infineon in Virginia, not only did the judge rule that Rambus' patents don't actually cover SDRAM/DDR, but the jury found Rambus guilty of fraud for sitting on JEDEC and failing to disclose their intent to seek royalties on SDRAM--which is essentially what the FTC claim charges. (Unlike the DOJ investigation I talked about above, the FTC is past the investigating stage and today actually filed a claim against Rambus.)
However, it's not quite as simple as other