BusinessWeek Examines the Rambus Legal Saga

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."

Comments

Sad story

[5, Troll]

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.

Only a good thing to collude against rambus

[Saven Marek]

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

Re:Only a good thing to collude against rambus

[aussie_a]

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.

Re:Only a good thing to collude against rambus

[close_wait]

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.

Re:Only a good thing to collude against rambus

[value_added]

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.

Vindicated?

[ReformedExCon]

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.

Wow - I am so conflicted

[RzUpAnmsCwrds]

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?

What I want to know ...

[dennison_uy]

"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?

.. And the real winners are...

[Anonymous Coward]

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?.

Bad pratice all around.

[Voltageaav]

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.

Re:Price fixing in RAM

[Jake Diamond]

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.