Supreme Court Sides With Rambus Over FTC

afabbro writes "The US Supreme Court rejected the FTC's bid to impose anti-trust penalties on Rambus. Without comment, they let stand an appeals court decision favoring Rambus. The FTC had found that Rambus undermined competition by getting secretly patented technology included in industry standards, but the Supremes evidently didn't agree."

Comments

The Supremes

[Muad'Dave]

So the Supremes didn't say "Stop [bundling secretly patented technology] in the Naaaame of Love"?

A Hard Lesson Learned

[erroneus]

Not that anyone in this day and age learns from mistakes any longer -- following the economic crash, people are seeking to get back to "business as usual" failing to appreciate that "business as usual" is what caused the crash. (Interestingly, the great depression spawned all kinds of lessons and wisdom that carried for generations... it wasn't really until most of the great depression survivors died that this crash occurred.)

But I seem to be getting off-topic but not truly. The idea here is that RAMBUS got away with a very serious and ugly misdeed. They got away with it. Their reputation has been harmed but not enough that they would be shamed out of business. But industry standards people are well aware of what happened and I should hope that they will be able to prevent that sort of thing from happening ever again. They should include provisions that says things like "by providing your specifications or designs, you agree that any associated patents or other rights will be licensed to all users free of charge" or "by submitting this information for approval, you also agree that you are giving up any claims on intellectual property rights where this specification is used."

RAMBUS became instantly evil in the eyes of many with the news of their misdeed. Likewise, Microsoft became instantly evil in the eyes of those interested in ISO standards approval. These should all be counted as lessons learned. I don't think anyone uses RAMBUS RAM do they? There is good reason for it -- they priced it right out of use. Microsoft is another story...

Re:A Hard Lesson Learned

[MiniMike]

Unfortunately, I think the lesson propagated here is that you should sneak your patents into standards you are supposedly helping with, as no harm will come to you from your misdeed. Rambus and Microsoft are not the first companies to do this, and thanks to the encouragement they received from the Supreme Court they probably won't be the last.

Re:A Hard Lesson Learned

[billcopc]

The difference is nobody actually knew they were going to owe Rambus a ton of royalties. Their IP was essentially "hidden in plain sight", and they waited until it had achieved critical mass before litigating the hell out of everyone to collect.

It's kind of like the W3C coming out of the clockwork and saying "Hey! I invented the internet! Remember all those RFCs ? Mine. CSS ? Mine. Now give me all your money before I smack you with this patent portfolio."

It's kind of like being retroactively billed for all the times you've slept with your ex-wife. IRL we call that divorce, but in business it's called fraud.

Re:A Hard Lesson Learned

[ShieldW0lf]

What is wrong with companies collecting royalties on the products that invented?

They participated in a consortium whose purpose was to create open standards so everyone on earth could benefit from commodity pricing, and they filed patent protection on processes secretly while leading the members of the consortium to believe that they were operating in good faith.

They didn't create new technology and ask people if they thought it was fair at this price. They held an industry hostage with lies and deceit. They're garden variety con-artists who belong hanging by their necks from a tree at a crossroads.

Re:A Hard Lesson Learned

[drinkypoo]

It's kind of like being retroactively billed for all the times you've slept with your ex-wife. IRL we call that divorce, but in business it's called fraud.

Well, not like it's easy, but the trick is to find a wife who makes more money than you do. Then, you sue her. Hey, it works on celebrities. Unfortunately, Madonna doesn't return my letters :(

Re:A Hard Lesson Learned

[manekineko2]

I'm not really immediately clear on why, but this case was litigated on a different ground than everyone here is discussing (as of the time I am posting this comment).

JEDEC is a standards board that requires members to disclose their patent holdings. With proper disclosure, JEDEC could either adopt a non-proprietary standard, or require reasonable and non-discriminatory licensing. Rambus was a member, but failed to disclose its patents, and then convinced the standards board to adopt its patents as standards.

Rather than litigating on fraud, like most people are assuming, it seems that at least at the appellate level, the FTC proceeded on an anti-trust theory. In order to succeed in an anti-trust case under the Sherman Antitrust Act, it has to be shown that your conduct reduced competition. If a company already has a monopoly, under this law, simply using it to charge higher prices isn't illegal, it's using it to quash competition that is, and it must be shown that but-for the deceptive conduct another standard would have been adopted. Now Rambus' actions are a lot of things, but it's not immediately apparent they reduced competition simply by increasing prices, and that's what the appellate court found. I don't really understand at first glance why this wasn't a fraud case.

The Supreme Court didn't actually side with anyone. They declined to review, like they do for more than 90% of cases, and this decidedly does not mean they side with either side. It simply means they're very busy and decided this wans't one of the 100 most pressing cases facing the United States in this year. Therefore, the appellate level decision stands on this case.

Source on most of what I'm saying on Rambus:
link.

Re:A Hard Lesson Learned

[manekineko2]

After more digging, I think I get it now.

A fraud action actually was brought by those injured by Rambus' purportedly fraudulent actions, i.e. the other memory manufacturers. The FTC wanted to also punish Rambus, so it brought a separate anti-trust case against Rambus, which was decided for Rambus by an appellate court, and that is what was just turned down for review by the Supreme Court.

The fraud actions failed after juries decided that Rambus had been showing off these technologies before the standards board meetings, and that the JEDEC standards board rules don't clearly require disclosure of the patents. Source:
link.

For what it's worth though, Rambus seems to be having difficulties enforcing its patents. Apparently, it destroyed key documents related to them.
Source:
link.

Re:A Hard Lesson Learned

[commodore64_love]

I have the tar. Did you bring the feathers? Good. Let's roll.

Aside-

Ever wonder where common citizens got the tar for their "tar and feathering"? Simple. Tar, which is basically "sticky oil", used to occur naturally. There were lakes of oil/tar just laying-around in random locations, because nobody had a good use for it. Then the industrial revolution happened in the late 1800s, and we burned all the oil/tar in our factories and cars. No more black-colored lakes.

This is why I find it funny when they say "dumping oil is bad". In a natural environment, without humans, oil and tar bubbles out of the ground constantly. Oil is part of the environment. It's as natural as manure.

Re:A Hard Lesson Learned

[tlhIngan]

Did they though? Their technology is not exactly widely used...

RDRAM may not be widely used, but the technologies they claim patents on have, which include stuff like DDR and QDR signalling, which are used everywhere.

And let's not forget that one of the world's best selling consoles uses RDRAM as well - Playstation 2 has 32MB of RDRAM. Its successor also has 256MB of RDRAM as well.

As for the memory manufacturers forcing prices down - given the price discrepancy between DDR-SDRAM and RDRAM, there was no way the memory dumping could've easily forced RDRAM prices to be significantly (4x-8x) higher than the equivalent DDR-SDRAM. A better part of a grand for 128MB of RDRAM (while the DDR version sold for under $200) around 10 years ago? DDR prices were much in line with old SDRAM pricing in the days - while RDRAM prices were really out of this world.

Re:A Hard Lesson Learned

[spacefiddle]

the government forced lenders to make bad loans

Yeah, unrestrained greed and lack of accountability had nothing to do with it. Banks like PNC, who avoided the feeding frenzy and were laughed at by their peers for not cashing in on the FotM, were substantially penalized by- no, wait, they've actually come out stronger and gobbled up some of their gambling competition....

An Underhanded Move by Rambus.

[purpledinoz]

I was really hoping Rambus would lose this case. This decision is a loss to everyone because it means that companies can now secretly get patented items into standards, which will really hinder the standards making process (which by the way, is a great benefit to the consumer). I hope everyone just refuses to do business with Rambus and let it go bankrupt.

Re:An Underhanded Move by Rambus.

[commodore64_love]

Not really. In the future standards committees will simply require companies to sign a "full disclosure" contract, so that if a technology is owned by one of the companies (say Sony), then it will be revealed to all the participants. And if Sony does not reveal that fact, the company can be sued for breach-of-contract.

I see why the FTC lost

[MobyDisk]

The FTC argued in court papers filed in Washington that Rambus âoewaited to assert its patent interests until the new standards had been widely implemented.â The agency said Rambus then âoedemanded stiff royalties from makers of the great majority of computer memory chips.â

I thought this case was about Rambus filing patents for ideas that were brought up during the committee planning of the memory standard. That would mean that their patents are invalid, and that they essentially stole them. But that doesn't seem like what the FTC based their case on. The article makes it look like all Rambus did was wait to assert their patents, which is jerkass but perfectly legal.

Am I confusing this with another case?

Re:A Memory manufacturor

[drinkypoo]

If you don't know who RAMBUS is then you should, they have been a big name in computing technology for a lot longer than this RDRAM shit has been around. And if you can't use google then you don't deserve to Slashdot. And no, I'm not kidding this time. Every time someone cries about a well-known company not being detailed in a Slashdot summary, this site gets a little dumber.

How the Court Works

[north.coaster]

The FTC had found that Rambus undermined competition by getting secretly patented technology included in industry standards, but the Supremes evidently didn't agree.

Actually, the Court's decision not to hear the case only implies that a majority of the judges did believed that there was a compelling reason to hear the case. Quoting from here:

The Court grants a petition for certiorari only for "compelling reasons," spelled out in the court's Rule 10. Such reasons include, without limitation:

• to resolve a conflict in the interpretation of a federal law or a provision of the federal constitution
• to correct an egregious departure from the accepted and usual course of judicial proceedings
• to resolve an important question of federal law, or to expressly review a decision of a lower court that conflicts directly with a previous decision of the Court.

Which of these reasons would have justified the Court to hear this case?

Re:How the Court Works

[kscguru]

None of the courts (except the first) made any ruling whatsoever about whether Rambus' actions were illegal, despite most of the comments on this thread claiming the courts said that. And though I can't find the court opinions, I would be surprised if the Appellate Court challenged that at all. See, a case like this requires (A) proving that Rambus did a nasty thing, and (B) proving that the nasty thing is against the law. Part (A) belongs in the original court and is extremely hard to appeal; part (B) gets appealed everywhere. The Appellate Court found that the FTC didn't prove part (B), and the Supreme court agreed.

Believe it or not, the court system is pretty good at throwing out crappy lawsuits. The courts cannot just declare a company assholes, they can only rule upon the proof of assholeness brought before them. The FTC screwed up the case.

The only reason Rambus will win

[imsabbel]

Is that it will force asian companies to pay money to an american company.

So the Supreme Court might have just a little bias there...

Re:A Memory manufacturor

[drinkypoo]

You act like everyone should be aware of a computer hardware manufacturer, so I hope you hold yourself to the same standard and are aware of all the big names in all the other fields covered by slashdot news.

Actually, I just know how to use google. If I don't know something I can look it up. I have lost count of the number of times I'm sitting in someone's living room and they say "I wonder blah blah blah" and I say "have you googled it" and they say "no" and the answer is on the first page. Fuck, that applies to about half the "ask slashdot" questions, if you can just come up with a decent set of search terms - 99% of the time you can pick them right out of the summary.

If not, you are a whiny hypocrite.

Slashdot needs a CAPTCHA which restricts posting to people who are able to pass a reading comprehension test. It would certainly have prevented you from proving to the world that you are a big idiot.

Re:A Memory manufacturor

[sexconker]

Rambus makes RAM.

Rambus essentially stole trade secrets / patented info and jury rigged them into various standards, thus making them no longer a secret and the patents unenforceable.

The people behind those secrets and patents got pissed and sued Rambus.

The lawyers have been slapping their cocks together for about 17 years, several of which have been in relation to this case.

There were decisions, there were appeals, and now the end of it is the Supreme Court ruling that lets Rambus get away free and clear.