Rambus Loses Major Antitrust Case Against Hynix & Micron
by Ryan Smith on November 16, 2011 11:38 PM ESTThere are few companies in the tech world as infamous as Rambus, an IP-only RAM development firm. For the better part of 10 years now they have been engaged in court cases with virtually every RAM and x86 chipset manufacturer around over the violation of their patents. Through a long series of events SDRAM did end up implementing RAMBUS technologies, and the American courts have generally upheld the view that in spite of everything that happened while Rambus was a member of the JEDEC trade group that their patents and claims against other manufacturers for infringement are legitimate. At this point most companies using SDRAM have settled with Rambus on these matters.
Since then Rambus has moved on to a new round of lawsuits, focusing on the aftermath of Rambus’s disastrous attempt to get RDRAM adopted as the standard RAM technology for computers. Rambus has long held that they did not fail for market reasons, but rather because of collusion and widespread price fixing by RAM manufacturers, who purposely wanted to drive Rambus out of the market in favor of their SDRAM businesses. The price fixing issue was investigated by the Department of Justice – who found the RAM manufacturers guilty – which in turn Rambus is using in their suits as further proof of collusion against Rambus.
The biggest of these suits was filed in 2004 against the quartet of Samsung, Infineon, Hynix, and Micron. In 2005 Infineon settled with Rambus for $150 million while in 2010 Samsung settled with Rambus for $900 million, leaving just Hynix and Micron to defend. That suit finally went to court in 2011, with Rambus claiming that collusion resulted in them losing $4 billion in sales, which as a result of California’s treble damage policy potentially put Hynix and Micron on the line for just shy of $12 billion in damages.
Today a verdict was finally announced in the case, and it was against Rambus. A 12 member jury found in a 9-3 vote that Hynix and Micron did not conspire against Rambus, effectively refuting the idea that RAM manufacturers were responsible for Rambus’s market failure. As Rambus’s business relies primarily on litigation – their own RAM designs bring in relatively little due to the limited use of RDRAM and XDR – this is a significant blow for the company.
Rambus can of course file an appeal, as they have done in the past when they’ve lost cases, but the consensus is that Rambus is extremely unlikely to win such an appeal. If that’s the case this could mean that this is the beginning of a significant shift in business practices for Rambus, as while they have other outstanding cases – most notably against NVIDIA – the anti-trust suit was the largest and most important of them. Not surprising their stock also took a heavy hit as a result, as it ended the day down 60%. Rambus winning the anti-trust suit had long been factored into the stock price, so the loss significantly reduced the perceived value of the company.
Source: The Wall Street Journal; Reuters; Businesweek
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Wolfpup - Thursday, November 17, 2011 - link
I can't believe this company is allowed to exist. I mean they fraudulently participate in the development of various SDRAM specs...and then they've actually WON cases against RAM manufacturers? How is that possible? This is so clear cut.And what purpose do they serve? They used trickery to try to get leverage to sue other companies...aside from that, and somehow actually getting RAM into PCs 10 years ago, and the Playstation 2 and 3, they seem to have no actual purpose whatsoever...
JonnyDough - Saturday, November 19, 2011 - link
You must be privy to inside information the rest of us are missing. I'm sorry, which juror # are you? Maybe you aren't familiar with the terms RAM and BUS in relation to computers. Where do you think they got these names?The only people laughing in all of this are the lawyers.
Veroxious - Thursday, November 17, 2011 - link
That company is the textbook definition of "sore loser". You should have moved on 10 years ago and designed something better by now. IIRC if Rambus have become the defacto memory the price of RAM would have skyrocketed. One thing stays true though it seems ...... their "core" business always have and always will be extortion. I for one am glad that SDRAM won....did you see how cheap DDR3 is now?UpSpin - Thursday, November 17, 2011 - link
"if Rambus have become the defacto memory the price of RAM would have skyrocketed"Article: Rambus has long held that they did not fail for market reasons, but rather because of collusion and widespread price fixing by RAM manufacturers [..] Department of Justice [..] found the RAM manufacturers guilty.
--> Rambus was so expensive because RAM manufacturers fixed the price of RAMBUS, to push SDRAM. We don't know how cheap RAMBUS would be now, but probably as cheap as DDR3.
"I for one am glad that SDRAM won"
You're glad a 'criminal' consortium won? That's odd. I would have liked that the one wins which is better. And SDRAM wasn't better at the time. It was 'illegaly' pushed and RAMBUS was suppressed.
Is it wrong to charge those criminals for suppressing competition?
kyuu - Thursday, November 17, 2011 - link
Oh Rambus... now that you've got that silly crap done and over with, kindly focus on being less of a douchebag company so maybe your awesome XDR memory designs can actually gain some sort of traction. Oh, and learn your lesson from RDRAM: don't charge such exorbitant licensing fees that nobody can afford your memory and then a new SDRAM format comes out that steals your designs but is, at least, actually affordable so no one really gives a damn that you were ripped off.Thanks.
ATC9001 - Thursday, November 17, 2011 - link
Did you read the article? There were very legitamte concerns about price fixing which is what caused extremely high prices.I almost always side with defendants for pattent trolls, but I think Rambus was likely in the right. Two companies settled, and the other two went to court...this is a continuation of failed bargaining between Rambus and the two companies, it's not like Rambus woke up last year and sued, this has been going on for over 5 years.
kyuu - Thursday, November 17, 2011 - link
Regardless, it's well known that Rambus was greedy and wanted too much. You did read the part of the article where Rambus *lost* the lawsuit, right?JarredWalton - Thursday, November 17, 2011 - link
We're forgetting a couple things. First, Rambus was part of JEDEC for a while, during the time when DDR was being designed as an open standard. They didn't bother letting everyone know that they were filing for patents on stuff that JEDEC was using I don't think, which led to them suing. Second, just because there was some price fixing doesn't mean that it was the only reason for the high costs of RDRAM. RDRAM at the time it was used typically cost three times what SDRAM was going for, and it required significant changes to the core technology (relative to SDRAM). For the R&D work involved with making a new memory type, I'd think the higher prices were justified; the question is how high should they have been, and that's not really something a court is good at deciding.Basically, Rambus is sore that their more expensive technology didn't become the new standard, where they could have made even more money on licensing. The memory companies on the other hand haven't necessarily been doing all that well (as someone else noted, have you seen the prices on DDR3 lately?), so why should they push for a more expensive technology where they potentially earn even less money? Their solution was to charge more (and price fix) so that they could get a bigger piece of the pie; the consumers eventually won out and RDRAM died, and the RAM companies were also found guilty of price fixing. Except, they were price fixing on SDRAM as well as RDRAM, so Rambus saying their tech lost because of price fixing is a bit absurd. It lost because even without price fixing, it wasn't the best way of doing things.
cbf - Thursday, November 17, 2011 - link
The Federal Court of Appeals found that Rambus did not defraud JEDEC. The fact is that essentially every memory manufacturer on the JEDEC committee had already signed a non-disclosure agreement with Rambus and knew what Rambus was doing. Also note that Rambus asked to present to JEDEC and was turned down.My take right now is that the Hynix & Micron lawyers succeeded in convincing the jury that Rambus' technology would have failed anyway. Samsung and Infineon did settle with Rambus on the same issues.
CodeToad - Sunday, November 27, 2011 - link
Federal Courts of Appeals are usually not finders of fact. Probably worth going back to where that case started. I have often thought that on the face of it, Rambus probably formed a business strategy of leaving in a huff and suing their former colleagues. The Federal Court System was not as adept at IP litigation as they are today. Once on that slope, it was just too easy to use their law firms as a revenue stream. When that happens, if you're not developing new IP at a rapid pace, you become an IP TROLL, and not long after that a ZOMBIE (devoid of any market purpose). I'll bet you would find an opposing slope between revenue spent on winning litigation (or threat thereof resulting in big "settlements,") and declining "real" engineering. How much truly effective (here I mean technically sound and marketable) IP have they posted in the last five years? When their senior executives leave, do they land senior jobs at mainstream tech firms?Someone made the frightening connection between a FINDING by the US Dept of Justice and GUILT. The Dept of Justice brings as many very questionable cases as anyone. Asian companies, especially, have become used to just paying 'em off rather than defend. Because it has "justice" in it's name does not mean it has anything to do with Justice (just as Justice has very little to do with "Truth"). Oh and we all pay for this... dangerous zombie called Rambus.