Slashdot Mirror
USPTO Declares Invalid Third of Three Critical Rambus Patents
slew writes "This is a followup to this earlier story about 2 of 3 of Rambus's 'critical' patents being invalidated. Apparently now it's a hat-trick."
There's something that seems unsavory and wasteful about a business environment in which a company's stock value "fluctuates sharply on its successes and failures in patent litigation and licensing." The linked article offers a brief but decent summary of the way Rambus has profited over the years from these now-invalidated patents.
Up with this we will not put!
rambus. EOT.
So do Nvidia, Hewlett-Packard , et al have any chance of recovering any money they paid to Rambus, or are they simply out the entire amount, or has no actual money traded hands yet?
Sig Battery depleted. Reverting to safe mode.
And it ain't over, yet, because they can still appeal - considering the loss of revenue, you can bet they will.
Can't really call this a victory, because Rambus received a cut of memory sales for years, which every PC buyer ultimately paid.
A feeling of having made the same mistake before: Deja Foobar
There's something that seems unsavory and wasteful about a business environment in which a company's stock value "fluctuates sharply on its successes and failures in patent litigation and licensing."
If ARM holdings licensing came into question it would probably destroy the company's stock. I am loving the way the ARM architecture is handled, a lot more competition than x86, and it seems to be advancing quickly now that it has becoming popular.
I was trying to imagine today if ARM holdings could survive in a world without IP laws. I think yes it could. It seems that getting a hold of ARM holdings processor plans, from something like bittorrent, would not be super useful even to Texas Instruments, Samsung, or Nvidia engineers. ARM works with them to implement the design, so the payment agreement would probably just be altered slightly and ARM would have to protect its disclosure of ARM architecture details a little more closely. Perhaps ARM would morph more into a standards body and not be as profitable though? I am curious what someone with more info on the topic can share please!
It's not that a company's price fluctuates with the state of its patent portfolio. The problem is that 3 patents, which should have never been issued in the first place, terrorized inventors and suppressed innovation for multiple years. This is squarely an indictment of the USPTO and of the Congress.
Patents are a property; changes to the scope of existence of a property right change the value of the property governed by that right.
The market should estimate the possibility of a company's winning or losing a patent case; once the decision is made, the actual value of the company has changed because of the new determination of whether the company has the right.
The only alternative would be to split the patent right King-solomon style. But that only happens if both parties are willing to settle.
Parties are sometimes not willing to settle. They may know or mistakenly believe that they are in the right, or they may expect they can force the other side to settle for more later.
In addition, mucking up their estimation as to whether they will win--and thus whether it makes sense to settle--is the fact that empirical research demonstrates that lawyers are more attractive to clients when they project a higher chance of winning. Thus it is in the interest of the lawyers to artificially inflate the chance of winning by at least some margin--whether done subconsciously or deliberately--and this means parties have biased information when they decide whether to settle.
Finally, occasionally a court will do something nobody expected, either legitimately for reasons people did not anticipate would motivate them or out of stupidity.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
There's something that seems unsavory and wasteful about a business environment in which a company's stock value "fluctuates sharply on its successes and failures in patent litigation and licensing."
No, there's not. Do you see the bulk of silicon made in the USA? Thought so. Buy any consumer-grade electronics, and it will say Made in China. Made in Taiwan is already higher-end. I've been given some Christmas candy that was friggin' made in China. The only thing left is R&D. Research should lead to inventions, which should lead to patents.
The problem is of course, overly broad patents, obvious patents (*), etc. But that there are companies doing the research, creating products, then license out the manufacturing and everything else, nothing strange about that. And their only assets are their people and their patent portfolios.
(*) in this case: patents for stuff that any engineer, put in a room and given a problem, would come up with before the day is over. I'm not talking about old patents for something, then more recently "the same thing, but on a computer" and nowadays "the same thing, but on a mobile device".
Parser error. Third of three is 1 patent, not 2. Editors, slashdot, etc.
Must we continually remind you that Rambus technology was never Rambus technology, but rather stolen technology?
Sig Battery depleted. Reverting to safe mode.
I was given a very nice Compaq Deskpro series computer with about a 1.5G P4 (this was a while ago!) and it used their awful RAM. Apparently Compaq designed motherboards for a short time with their product, then rapidly moved away from them because I shortly thereafter got the same exact series computer with about a 2.0G processor and it used normal RAM. Thankfully, they got away from using it quickly.
I had to purchase a RAM upgrade to bring it from 512K to 1G RAM, and felt absolutely disgusted about HAVING to channel any money at all their way, but I really had no choice, I: wasn't about to throw away a perfectly good system just because it was low on RAM, but the memory cost me about 3x what the average DIMM of DDR cost at the time, absolutely obscene.
I hope they can go away and die now, I'm just sorry they were able to collude and extort the industry for as long as they did.
-- You are in a maze of little, twisty passages, all different... --
He right know what infinitive is, don't this need prove for criticizing grammar prescriptivist.
How sense this criticism make, another matter is.
Yet no proof there is of malapropism.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
Perhaps there should be greater incentivization for companies that are directly involved in making products based on patents, or at least on companies that have a reasonably large interest in companies that do produce products based on patents. Since we've all decided that Intellectual Property is Real Property, we've essentially allowed companies to use patents like they would apartment buildings, if we're not going to redefine what constitutes property, then at least there should, say, tax incentives for companies that patent and then produce products, are take ownership stakes in companies that do produce products based on patents. Or, we could just simply set the tax rate extremely high on licensing income, and then if you can demonstrate that you are in any substantial way responsible for making products based on patents you hold, then you get a break on those taxes. So let's say a company that makes its money purely from acquiring and licensing patents has to pay 95% of said income in taxes, but where they actually are involved in production that uses said patents they get an increasingly greater cut up to what we would currently consider normal corporate rates, so that companies like Apple (though I have my own issues with their using patents to bludgeon, but at least they do actually manufacture products based on their portfolios) are not penalized. I think you could make it very fine-grained, based upon each patent, so that there is no incentive to patent lots of things and then strategically use patents that one has no intention of making products from to attack competitors.
It wouldn't be a perfect solution, and still leaves open questionable patent suits like Apples', but perhaps we might also look at rules to require that licensing fees plus some level of interest be returned to the licensees, thus making it far riskier for a company to use dubious patents slipped past overworked examiners to bludgeon or force licensing fees from competitors. How willing would Microsoft be to go after Android manufacturers if there was a law on the books that would require them to return those fees plus interest if the patents got overturned?
The world's burning. Moped Jesus spotted on I50. Details at 11.
Was RAMBUTTS, as that is what they did with their bogus patents. However the Board of Directors though the name might be to telling so they dropped the T's.
Many PC builders and customers are still sore today.
Silence is a state of mime.
USPTO: "Yeah, we approved these totally bogus patents that resulted in billions of dollars of litigation and now we're affirming our own malfeasance. What's your problem?" The USPTO needs to be sued into the stone age for this fraud.
I don't think it's an unsavory or wasteful business environment when a company stock price "fluctuates sharply on its successes and failures in patent litigation and licensing."
Think of a university research group which discovers a new drug candidate, and forms a company to pursue its further clinical trials and licensing. The financial health of this company will be wholly determined by its ability to patent and license.
Think of a pharma company which spends $200mil research on each drug candidate, and every four years it gets one $10bil success for 50 failures. The financial health of this company will rest solely on its ability to protect (through patent litigation and licensing) the $10bil revenue that makes up for the $10bil expenses.
These both seem like cases where the market is operating as intended.
Nice view of the process.
Makes me wonder if the market is failing here due to the issue of patents (which are a privilege granted by the government to create artificial scarcity) being so profligate that we have some sort of patent boom fuelled by lawyers?
If so, it's due to head for bust any time soon - I wouldn't want to be holding stock in any company with that business model.
A sudden outbreak of commonsense at the USPTO?
Whatever it is, it couldn't have happened to a more deserving company.
It's a shame that the terms of the past settlements probably have clauses keeping the paying party from getting anything back.
The way Rambus has profited over the years from these now-invalidated patents ...
In other words, Rambus is nothing but a scam
And the amazing part is that the America knowingly allows such a scam to exist for such a looooooooooonnng time !!
Muchas Gracias, Señor Edward Snowden !
3 down, many thousands to go.
Or, we could just simply set the tax rate extremely high on licensing income, and then if you can demonstrate that you are in any substantial way responsible for making products based on patents you hold, then you get a break on those taxes.
I like this idea, because the original intent of patents was to allow the inventor a certain period of exclusive use of his patent before it became available for others to use. Its not at all clear that licensing was ever contemplated.
The theory was that the inventor could make more money selling a product incorporating a new invention than a competitor could make without it. But the money came from the selling of the products, not the licensing of the patent.
If you do not want to use tax law, (and there is certainly reason enough not to do so), then you could use the term (duration) of the patent itself. If you make a product using your invention, you get a longer patent term, but if you license it you get a much shorter duration patent.
The theory being the total return on your patent was meant as a temporary monopoly as an incentive to invent. You can choose to achieve this total return in 5 years by licensing the patent to others, vs 15 years by using it yourself. In the first case you multiply your earning power, while assuming no costs and taking no risks, so your period of reward is lessened.
Sig Battery depleted. Reverting to safe mode.
Say goodbye to ARM processors then. ARM Holdings doesn't make anything, they just license out processor designs.
Not to mention when they weren't patent trolls they were frankly shitty at business. RDRAM sucked, it cost too much to manufacture, needed dummy chips to fill empty slots, didn't scale well, it just wasn't a great design. Frankly after even Intel gave up on RDRAM patent trolling was pretty much all they had left. Good riddance Rambus, all of us will be glad when you are gone.
ACs don't waste your time replying, your posts are never seen by me.
Calling in Seal Team 6 on the board of directors would have been a preferable solution.
No solution is perfect, and every change will make winners and losers. That's life. I fail to see why we should prop up a badly malfunctioning IP system just so ARM can keep making money.
The world's burning. Moped Jesus spotted on I50. Details at 11.
What's with trying to make Rambus sound like a hardworking bunch. Yes, in the day they did practical things, but then they stole an entire group's process. Now, fortunately, they're reaching the end of the tether. If there was justice, their principles would be taken out and shot.
The world's burning. Moped Jesus spotted on I50. Details at 11.
"Stolen"? How so?
Comment removed based on user account deletion
Because ARM is fucking awesome, and they're one of the few low-power chip manufacturers that makes tools freely available. Toshiba et. al suck because you have to pay to license the compiler for the chips you just bought from them.
"Stolen"? How so?
I don't know. Maybe you should follow the link the parent provided for you. If you don't want to do that, need I remind you about all the standards meetings that Rambus attended, and mysteriously patented the future standards shortly afterwards. At least, that's the rumor I remember. And I specifically remember Rambus suing everyone trying to get money for DDR patents, even though DDR had been around for ages. Being in every P4 machine wasn't enough. They needed to make money from every computer, whether they made the RAM or not.
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
I'm amazed. A Rambus astroturfer. The SCO checks bouncing now?
The world's burning. Moped Jesus spotted on I50. Details at 11.
First, the length of patents should be significantly shorter. If you get your product out there, and get people buying it, 5 year should be enough of a head start for you to get brand awareness built, get the bugs worked out, and grow enough to be able to fend off competition.
Along with that, I would overturn the current 'obvious' test. Instead, give a description of the invention. If anybody can come forward in three or six months with the same idea, then your idea was obvious enough to not warrent protection. On the other hand, if nobody comes close, and your invention is in a completely new category with no alternatives and you have to build a brand new market for your product from scratch, then you qualify for a longer protection.
Also, somebody must be able to take your documentation and build your invention without assistance from somebody involved in submitting the patent.
I don't know. Maybe I did read the link you provided, which is why I was asking what you meant. Rambus's patent applications predated the JEDEC meetings. The sleazy behavior they engaged in was in their failure to disclose the patents and efforts to steer the emerging standard such that you couldn't implement it without running afoul of the RAMBUS patents. Definitely what they did was fraudulent and wrong, but "stolen" isn't the right word here.
This quote is too good not to bring up when it comes to mentioning Intel and Rambus.
October 2000
Craig Barrett, Intel's president and CEO, tells the Financial Times: "We made a big bet on Rambus, and it did not work out ... In retrospect, it was a mistake to be dependent on a third party for a technology that gates your performance."
Actually, the RDRAM architecture was excellent. It didn't have any problem scaling at all, in fact it scaled much better than what we have now. It just never went much further than the beginning stages. The really nice thing about RDRAM was that since it was a serial technology, it was dead simple to route traces to multiple banks of memory, unlink DDR3, which has so many pins that trying to accommodate anything more than 4 slots per processor is an amazing feat.
Hard enough that you didn't see more than that (ok, we had 6-chip versions for the X58 line) until Intel came out with a specific chip layout that balanced the pins on both sides of the CPU chip so you could place 2 or 4 slots on each side of the chip, and even then it wasn't simple. Take for example today's PC3-12800 RAM (DDR3-1600) has a maximum peak rate of 12.8GB/s. Rambus's XDR that came out in 2006 had a peak rate of 25.6GB/s per channel, and as I said before it is easier to include many more channels of RDRAM.
Granted, it was more expensive to manufacture, but performance wise there wasn't anything that could touch it until Intel basically pulled the plug on it and all the advancements pretty much stopped. I'm not defending their behavior or how they handled patents, but RDRAM was really good, and I was sad to see when bureaucracy killed it off.
Although RDRAM was good at providing high bandwidth, being serial and having more logic between row activation and the last data bit of the cache line propagated through the complicated deserialization logic on the way to the front side bus, it sucked at latency. Unfortunatly, what misses and evictions that dribbles out of the typical CPU cache are often pretty random, so although RDRAM generally had more banks than standard SDRAM of the time, for most use cases, the randomness of the access patterns cause it to have more average latency than DRAM.
This probably would NOT have gotten better over time even if intel had continued to invest in it as caches got bigger and the dribbles got even more random and regular DRAM grew more banks to catch up.
Even the i820 "camino" chipset from intel which used PC800 RDRAM, was slower than using the previous generation "BX" chipset which used PC133 SDRAM. Of course if you were working on a large data set with lots of cache misses, RDRAM was faster, but it would be a mistake to say that RDRAM was better for the average user in the average case.
You could use that reasoning to abolish the entire patent system...
If you can patent something that someone with the same problem/task could independently come up with in a day or less, and thus make them spend weeks in patent negotiation or litigation, that slows down progress.
Does it encourage more innovation? I think many of the people and companies actually trying to make stuff will still do so in the absence of patents.
Anyone seriously think that Apple wouldn't be making money from the iPhone if there were no patents at all? They can still prevent fakes and copies with trademark and copyright laws.
Rambus's patent applications predated the JEDEC meetings.
Their amendments to their applications to match what they'd heard in the JEDEC meetings, on the other hand...
Anyone seriously think that Apple wouldn't be making money from the iPhone if there were no patents at all? They can still prevent fakes and copies with trademark and copyright laws.
Which also applies to ARM. The primary protection of a processor design is copyright, and by the time you have gone away sufficiently from the design to no longer be covered by copyright you would probably be easier to start over. There's definitely plenty of extra difficulty in starting over caused by patents, but getting rid of them definitely doesn't rule out a business like ARM.
=~ s,(.*),<sarcasm>$1</sarcasm>,g if any_point_you_wish();
One of the upshots of this whole discussion is that the pattent system works better or worse depending on the context. For software it is a disaster. The chemical industry seems to be quite comfortable with it.
For some inventions, like drugs, one can make the argument that patents are the wrong vehicle to start with. I once attended a talk by an exec where he essentially said that if you wanted to make sure a new drug never came to market, all you had to do is publish its formula without patenting it. There I would say that patents are a hindrance in many respects, and a concession model would be better (exclusivity licence granted by the government to cover for medical study).
So maybe we should reframe the whole discussion in terms of contexts.
Well does this mean that if a company takes out a bogus patent it runs the risk in the future of damages?
This might be a fair mechanism to slow down patent trolls because the act of taking out as patent is also a potential risk as well as a reward.
You're taking away the ability for companies to specialize. Let those that are good at R&D do R&D, and let those that are good at production do the producing.
[Obligatory Car Analogy] If I invent an awesome new spark plug that gives 10% more power for 15% less fuel consumption I have to build a factory and run it (which I know very little about) to avoid your stupid tax? That'll delay it from reaching the market for years, when it could be out in months if I license it to Bosch or Champion. Who gains from that? Not the environment. Not drivers. Not me. Not the economy as a whole. Not you either, hopefully.[/OCA]
Would you tax an architect more because he doesn't pour the concrete himself on the buildings he designs?
So it's a dumb idea in principle, but I suppose it sounds good to those who think it's not real work if you don't get your hands dirty.
It's a dumb idea in practice too. What about joint ventures? What about dealings between semi-autonomous divisions within companies? Are they in scope or not? It'll keep plenty of lawyers busy, that's for sure.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
First off, patents don't protect "products" per se. They protect inventive concepts, of which a given product is but one embodiment (usually). In any case, a patent can comfortably take 5 years from filing to grant, and if you want to decrease that you're going to have to accept a lower standard of examination. Secondly, most jurisdictions have a mechanism wherein the renewal fees on patents (because you have to keep paying every year to keep it in place) rise quite sharply for the latter half of the term of protection. The effect of this is that the average length of patent terms for the majority of cases is actually quite a bit less than the 20 years maximum possible term, because it becomes uneconomical for the proprietor to keep up the renewal fees when the patent's subject matter has ceased to be profitable for them. Also, 5 years might be plenty for technology products, but consider other fields; pharmaceutical products - for whom the "incentive to invent" justification for patents is perhaps strongest - will still be undergoing the regulatory approval process by the end of 5 years.
The "obvious" test isn't really there because of competitors, it's to stop trivial inventions being patentable. Your solution would remove that barrier, and also ignores the fact that there are many possible reasons why a good, solid patent idea may not yet have been filed. With your system, you could end up with trivial patents being granted due to no-one else wanting to work in that field, or extremely solid patents being refused simply because there were multiple people pouring huge amounts of effort and inventiveness into the same field.
Finally, your final criterion already exists. It's called "sufficiency of disclosure", and in most jurisdictions (patents being national rights and hence requirements varying from place to place), if the ordinary skilled person cannot work the invention described to the full extent of protection sought by the claims, then that is grounds for refusal or revocation of the patent.
Once upon a time I was in the thick of this, both working for a Rambus licensee on our implementation of their design, and later reading the patents, including the original 1990 submarine.
I don't see from your Wikipedia link where they say Rambus "stole" their IP from anyone.
As a fun aside, the original 1990 submarine patent application, was abandoned, but not before being continued, which I guess is part of what let it stay submerged for so long. I believe even the first continuation was abandoned as well, but not before it spawned the other patents that they actually used. That orginal patent actually described "Rambus-C", not "Rambus-D", the thing that they eventually brought to market with Intel.
It was an incredible job of mining the teachings to extract claims which just happened to match the JEDEC standards. I was also friends with several JEDEC members on that board, at the time.
The living have better things to do than to continue hating the dead.
RMBS 52wk Range: 4.00 - 22.20 Currently around 7.8 I hope they drop like thermite tapping a lake for ice fishing. /Micron Technologies stockholder
I have a real counter-example. I came up with a great new technology for improving digital camera sensors. The increase in image quality is huge. I quit my job (in an unrelated field) and spent 2 years developing and patenting it. I was self financed, burning up most of my savings. I now want to license my technology to camera companies. I do not have the means to manufacture cameras myself.
Are you saying 95% of my income should be taxed away? Are big companies who actually manufacture cameras somehow nobler or more deserving than me? Is there something sleazy about me?
There are problems with the patent law but they are better fixed by tightening novelty and unobviousness requirements.
True--a compulsory licensing scheme is one option that could make more sense. IIRC, courts have sometimes awarded compulsory licenses in the past in patent cases, but it is relatively rare. It may have to do with those cases where there is a strong public interest in allowing the infringing party to continue to infringe, but don't quote me on that--I'd have to look it up.
One problem with it is that it leaves courts to figure out after-the-fact what "fair" royalty would have been negotiated between the parties. One thing that would be a problem with it as applied to software patents is how to deal with free software when a company would not have been willing to license its patent for free.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
Now that the patent has been overturned, all companies that paid royalties to Rambus should be fully refunded. Otherwise, there is no punishment for making invalid patent claims and profiting from them.
The corporate entity should not protect the individual owners and their lawyers from financial remuneration. This would chill the patent war immeasurably.
Funny, Sony hasn't announced the PS4 yet.
Rambus RDRAM is in the most popular console to date, and is also in a current gen console. The PS2 (world's bestselling cnnsole) has 32MB of RDRAM (the same stuff you guys had to fork 3x the $$$ over).
The PS3 includes 256MB of XDR-DRAM, which is it's successor using multi-level signalling (much like how MLC flash stores data) to transfer 2 bits every clock edge.
So singlehandedly, gamers are keeping Rambus alive.
And it's quite possible that Sony's PS4 will use Rambus memory as well. Which will sell millions and have people claiming how much better it is than the Wii-U and Xbox Next. Thus keeping Rambus alive for another 7-8 years.
I'm not saying this particular business was of value, but what in particular is wrong when a company's stock value reflects real changes in the company's business. If your product is protected by a patent, and that patent is invalidated, you are suddenly opened up to competition that you weren't before and intelligent investors will realize that this will affect profits down the road.
So singlehandedly, gamers are keeping Rambus alive.
Or to put it bluntly, evil Sony and evil Microsoft are keeping evil Rambus alive.
Have you got your LWN subscription yet?
Say goodbye to ARM processors then. ARM Holdings doesn't make anything, they just license out processor designs.
That's covered by copyright.
Have you got your LWN subscription yet?