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BusinessWeek Examines the Rambus Legal Saga

Posted by ScuttleMonkey on from the collusion-around-every-corner dept.

An anonymous reader writes "Now that three companies have admitted to colluding to fix DRAM prices in what has turned out to be a global conspiracy BusinessWeek takes a look at the why. The most recent to admit guilt was Samsung and no one, as yet, knows precisely why they did it. The short answer seems to be because they didn't want Rambus' memory technology, DR-DRAM to succeed in the market. The more complicated answer is that now that Samsung, Infineon and Hynix have all admitted to fixing prices, they're now lawsuits from Rambus alleging that their motivation was to "kill Rambus" by making it too expensive for it to be attractive for PC manufacturers. Today in San Francisco, lawyers for Rambus are going to argue for the release of a set of documents currently under seal, that they think could go a long way toward proving their case. If nothing else, the timing of the price-fixing, which ran from 1999 to mid-2002 is suspicious, because that was about the same time that the DRAM companies would have been resisting pressure to adopt Rambus."

19 of 118 comments (clear)

  1. Sad story by 5,+Troll · · Score: 5, Interesting

    This article just scratches the surface of a story that is reminiscent of "Tucker" and how Pan Am (airlines) went after TWA. There are incredible connections between Rambus' adversaries, US Congressmen, the FTC and a whole cadre of politicans, judges, government officials and law firms working in concert against Rambus. It's the story of a $30 billion dollar industry of multi-billion dollar, multi-national corporations out to steal the assets of and destroy a tiny 200-person startup. Rambus' legal bills fighting this mess have been a quarter-billion dollars, far more than their total annual revenue. Rambus has managed to fight this battle while prospering and remaining profitable the entire time, but it's a sad tale of corruption and power politics at their very worst.

    --
    Please mod me only (+) Underrated or (-) Troll
    1. Re:Sad story by Anonymous Coward · · Score: 4, Informative

      While the collusion of established companies to wipe out newcomers is nothing to dismiss, you can't portray Rambus as a pure, innocent victim. If you recall, Rambus silently filed patents (for a relatively obvious concept) then submitted similar proposals to an ostensibly open forum of RAM manufacturers. They waited until their standards were adopted before filing suit to bilk the other manufacturers out of their profits. Indeed, Rambus could be considered a standard "patent factory" -- a company that produces nothing and relies on the patent system to siphon profits from the people who do actual development.

      Unfortunately, this is what you get when you pretend to support capitalism but actually have your government artificially subsidize all sorts of companies (through patents, tax breaks, and freedom from the responsibilities individual humans have). The successful companies are the ones who maximize their profits, and if there are minimal negative consequences for some vile act, they'll perform it eagerly. [end of rant]

  2. Only a good thing to collude against rambus by Saven+Marek · · Score: 5, Interesting

    well rambus wanted such high amounts to license its technology that it was effectively using patenting to work against ram manufacturers to ensure they paid rambus lots of money as opposed to all the ram manufacturers getting together to make sure rambus and their expensive (to the ram producing companies) licenses for their dr-dram would fail.

    to me the first situation is abuse of the patent system to pull cash out of everybody and the latter is just a democracy decision by many ram manufacturers to ensure rambus didn't succeed in the greedy cash grab.

    I'll take democracy thanks

    1. Re:Only a good thing to collude against rambus by aussie_a · · Score: 4, Insightful

      I'll take democracy thanks

      Your "democracy" is currently illegal, so you better do something other then post to slashdot if you want to protect it.

      Having said that, I don't think price fixing is good. And this was price fixing. Do you know what happens when companies get together to collude towards a certain price against a competitor (not that this has been proven, but from what I've read, I don't feel it's much of a leap)? Once the competitor dies, they raise the prices. Don't think this was about keeping the price low. It wasn't. This was about big companies protecting themselves against a little start up. Why they felt the need to do so is beyond me. Obviously Rambus had something worthwhile to offer, which they found easiest to combat via illegal business practices.

      And to those who will point out Rambus is currently under litigation via an appeal process, to paraphrase someone from the article Rambus's illegal practices is "irrelevant" to the conspiracy against them by at least these 3 companies. Two wrongs don't make a right.

      Regardless of what I think, it's quite possible for once that the truth will get out in the court.

    2. Re:Only a good thing to collude against rambus by aussie_a · · Score: 4, Interesting

      And if Microsoft, Apple and the biggest Linux distro's

      ..We apologise for this interruption. The person writing this post is currently busy laughing his ass off. Please hold...

      *ahem* anyway, if SOMEHOW, for SOME reason, they all got together and worked towards price fixing in order to kill SCO, then I would support SCO's litigation against them.

      People often post stuff like "I'm confused. Microsoft is bad. But they're fighting SCO, so does that make them good?"

      Bad people can do good things, and good people can do bad things. Same thing holds true for companies. Just because I don't support their practices in one area, doesn't mean I think they should have to suffer by those breaking the law.

    3. Re:Only a good thing to collude against rambus by aussie_a · · Score: 5, Insightful

      The problem is, when people go about protecting themselves (or attacking) bad people (or companies) in an illegal way, they deserve the full weight of the law brought against them.

      Society follows a collection of rules in order to survive. Together these rules are called the law. When people break the rules, then they harm all of society.

      Just think, had they not done this, while Rambus may have survived, they would have been able to have a better case in which to fight against Rambus's practices, and work towards changing, if not abolishing patent laws. As it is, they're illegal practices will now be used to protect Rambus against the law.

    4. Re:Only a good thing to collude against rambus by close_wait · · Score: 5, Insightful
      Society follows a collection of rules in order to survive. Together these rules are called the law. When people break the rules, then they harm all of society.

      So Rosa Parks refusing to give up her seat harmed all of society?

      PS: no, I don't think the two cases are comparable - I'm just pointing out the dangers of generalisations.

    5. Re:Only a good thing to collude against rambus by value_added · · Score: 5, Interesting

      Do you know what happens when companies get together to collude towards a certain price against a competitor (not that this has been proven, but from what I've read, I don't feel it's much of a leap)? Once the competitor dies, they raise the prices.

      Once upon a time in New York when the Genovese, Gambino and Columbo families were household names, the price for getting the garbage picked up was higher inside the city than elsehwere. The DoJ et al decided this wasn't A Good Thing and decided to go break up the cosy business arrangements, eventually sending scores of hard working Italian Americans to jail, and ending years of tradition. As expected, the prices soon plummeted as competition was brought back into the marketplace. The people saw that It Was Good and cheered.

      That would be a happy ending, but the story doesn't end there. Waste Management, Inc. and another company decided that there was money to be made in New York and moved in to start buying up the local competition. Within two years of The Big Bust, garbage pickup was handled by two conglomerates, and the price of getting it picked up was higher than in the days when mob was in charge of things.

      If there's a point to this it's that when there's money involved, rules get bent, and then some. There are no good guys or bad guys, and the side you're on is just that.

  3. Vindicated? by ReformedExCon · · Score: 5, Insightful

    Rambus has taken a lot of heat for allegedly inserting their IP-protected technology into the JEDEC process and has suffered under that yoke for years. Now it comes out that the companies wailing the hardest were actually out to destroy the "pure IP" company.

    I think that in this case there really isn't any good guy because all the parties involved are apparently bad guys.

    --
    Jesus saved me from my past. He can save you as well.
  4. Wow - I am so conflicted by RzUpAnmsCwrds · · Score: 5, Insightful

    Price fixing sucks. But this is Rambus we're talking about. Remeber RDRAM? Remember Rambus trying to hold JEDEC (and DRAM manufacturers) hostage through patent claims on DDR?

    1. Re:Wow - I am so conflicted by Omnifarious · · Score: 4, Interesting

      Yes, the companies were basically engaging in vigilante justice. I can understand why. They wouldn't want to change laws to make RAMBUS' evil patent strategies unworkable because they themselves might want to use those strategies in the future. So, I guess in the final analysis I have little sympathy for them.

      Isn't it interesting how most talk about patents, even by their proponents, are all about restricting competition and keeping a hold on markets, and not about getting new ideas out in the open where people can see them?

      --
      Need a Python, C++, Unix, Linux develop
  5. What I want to know ... by dennison_uy · · Score: 5, Interesting

    "The most recent to admit guilt was Samsung and no one, as yet, knows precisely why they did it"

    What I find more interesting is why Samsung admitted its guilt. Isn't this negative publicity bad for them?

    --
    Take off every 'sig'!
    All your 'sig' are belong to us!
    1. Re:What I want to know ... by Sockatume · · Score: 4, Insightful

      I imagine that most people buying PCs don't care about where the memory comes from, and I don't think that the PCs' manufacturers care either, as long as there aren't any "Acer uses teh evilRAM"-style headlines to give them bad press.

      --
      No kidding!!! What do you say at this point?
  6. .. And the real winners are... by Anonymous Coward · · Score: 5, Insightful

    The lawyers of course!... "A quarter of a billion dollars in legal fees"?.. and that's from the Rambus side alone. Obscene. Imagine if that money was invested in R&D, instead of this pathetic sleazy game of vile deceit?.

  7. Bad pratice all around. by Voltageaav · · Score: 5, Informative

    Rambus hasn't been playing by the rules either. They've been penalized for destroying documents, http://arstechnica.com/news.ars/post/20050302-4664 .html and are suing Samsung immediately after revoking their liscence. http://news.zdnet.com/2100-9584_22-5734443.html It seems as if the entire industry is corrupt.

    --
    Someone save me from this sanity.
  8. Won't somebody please think of teh children? by $RANDOMLUSER · · Score: 4, Informative
    Let's see: Rambus vs the companies who actually make the memory.

    Well, at least the sharks do something useful, which is more than I can say for the lampreys.

    --
    No folly is more costly than the folly of intolerant idealism. - Winston Churchill
  9. In case you're forgotten by $RANDOMLUSER · · Score: 4, Informative

    Intel wanted everybody to move to RDRAM, and tried their best, in their quiet, shy retiring way, to get all the motherboard manufacturers to switch. It was the high-end motherboard buyers (you know, the type who read Tom's Hardware every day) who refused to have anything to do with RDRAM, and cost was the least of their considerations. That's why DDR won, even as the prices were rising.

    --
    No folly is more costly than the folly of intolerant idealism. - Winston Churchill
  10. Re:Price fixing in RAM by Jake+Diamond · · Score: 5, Informative

    There still is a US DRAM manufacturer. Micron is still alive and kicking (and has been continuously in business since 1978), selling to consumers via the Crucial brand. There was price-fixing (which Micron doesn't seem to be completely innocent of, either), but one thing to keep in mind is that RDRAM, even if it weren't patented, required approximately 5-7 extra mask steps to create, as compared to DDR DRAM. In the cut-throat world of DRAM manufacturing, where every penny counts, this is a deal-breaker. Samsung was able to make money off RDRAM only because it was so expensive. Was it illegal for these companies to team up and kick down RDRAM? Yes. Am I sad to see it go? No way.

  11. Here is the deal... by jambarama · · Score: 4, Interesting

    This is what happened in brief. The four companies got together to pick a next standard. Rambus pushed hard for one in particular, and the others went along. As soon as the ink was dry, Rambus pulled out a patent. Generally talks like this include a clause that disallows using a patented standard, but there was no such clause on these talks.

    So the other three firms got together without rambus and said screw this we aren't paying obscene licensing fees. They chose another standard. They sued rambus for pulling the dirty patent trick. Rambus sued because the other three wouldn't deal with rambus.

    The price fixing scheme just happens to be at the same time. That is the third lawsuit going on in the dram industry now. They all had fixed prices sometime ago, it was this falling out over standards that got Hynix to squeal to the DOJ on the price fixing.

    There now you don't have to RTFA.