In the early 1990s, Rambus was invited to join the
JEDEC. Rambus had been trying to interest memory manufacturers in licensing its proprietary memory interface, and numerous companies had signed
non-disclosure agreements to view Rambus' technical data. During the later
Infineon v. Rambus trial,
Infineon memos from a meeting with representatives of other manufacturers surfaced, including the line "[O]ne day all computers will be built this way, but hopefully without the royalties going to Rambus", and continuing with a strategy discussion for reducing or eliminating royalties to be paid to Rambus. As Rambus continued its participation in JEDEC, it became apparent that they were not prepared to agree to JEDEC's patent policy requiring owners of patents included in a standard to agree to license that technology under terms that are "reasonable and non-discriminatory", and Rambus withdrew from the organization in 1995. Memos from Rambus at that time showed it was tailoring new patent applications to cover features of SDRAM being discussed, which were public knowledge (JEDEC meetings are not secret) and perfectly legal for patent owners who have patented underlying innovations, but were seen as evidence of bad faith by the jury in the first
Infineon v. Rambus trial. The
Court of Appeals for the Federal Circuit (CAFC) rejected this theory of bad faith in its decision overturning the fraud conviction Infineon achieved in the first trial (see below).
Patent lawsuits In 2000, Rambus began filing lawsuits against the largest memory manufacturers, claiming that it owned SDRAM and DDR technology. Seven manufacturers, including
Samsung, quickly settled with Rambus and agreed to pay royalties on SDRAM and DDR memory. In May 2001, Rambus was found guilty of fraud for having claimed that it owned SDRAM and DDR technology, and all infringement claims against memory manufacturers were dismissed. In January 2003, the CAFC overturned the fraud verdict of the jury trial in
Virginia under Judge Payne, issued a new claims construction, and remanded the case back to Virginia for re-trial on infringement. In October 2003, the
U.S. Supreme Court refused to hear the case. Thus, the case returned to Virginia per the CAFC ruling. In January 2005, Rambus filed four more lawsuits against memory chip makers
Hynix Semiconductor,
Nanya Technology,
Inotera Memories and Infineon Technology claiming that DDR2, GDDR2 and GDDR3 chips contain Rambus technology. In March 2005, when Rambus was accused of
shredding key documents prior to court hearings, the judge agreed and dismissed Rambus's case against Infineon. This led Rambus to negotiate a settlement with Infineon, which agreed to pay Rambus quarterly license fees of $5.9 million and in return, both companies ceased all litigation against each other. The agreement ran from November 2005 to November 2007. After this date, if Rambus had enough remaining agreements in place, Infineon could make extra payments up to $100 million. In June 2005, Rambus also sued one of its strongest proponents, Samsung, the world's largest memory manufacturer, and terminated Samsung's license. Samsung had promoted Rambus's RDRAM and currently remains a licensee of Rambus's
XDR memory. In February 2006,
Micron Technology sued Rambus, alleging that Rambus had violated
RICO and deliberately harmed Micron. On April 29, 2008, the
Court of Appeals for the Federal Circuit issued a ruling vacating the order of the
U.S. District Court for the Eastern District of Virginia, saying the case with Samsung should be dismissed, saying Judge Robert E. Payne's findings critical of Rambus, were on a case that had already been settled, and thus had no
legal standing. On January 9, 2009, a Delaware federal judge ruled that Rambus could not enforce patents against Micron Technology Inc., stating that Rambus had a "clear and convincing" show of bad faith, and ruled that Rambus' destruction of key related documents (
spoliation of evidence) nullified its right to enforce its patents against Micron. In July 2009, the
United States Patent and Trademark Office (USPTO) rejected 8 claims by Rambus against Nvidia. On November 24, 2009, the USPTO rejected all 17 claims in three Rambus patents that the company asserted against Nvidia in a complaint filed with the
U.S. International Trade Commission (ITC). However the ITC announced that out of five patents, Nvidia did violate three of them. Due to this ruling Nvidia faced a potential U.S. import ban on some of its chips used in the
nForce,
Quadro,
GeForce, Tesla, and
Tegra series graphics products—nearly every video card type manufactured by Nvidia. On June 20, 2011, Rambus went to trial against Micron and Hynix in California, seeking as much as $12.9 billion in damages for "a secret and unlawful conspiracy to kill a revolutionary technology, make billions of dollars and hang onto power", Rambus lawyer Bart Williams told jurors. Rambus lost on November 16, 2011, when the
San Francisco County Superior Court jury ruled against Rambus in a 9–3 vote, and its shares dropped drastically, from $14.04 to $4.00 per share. On January 24, 2012, a USPTO appeals board declared the third of three patents known as the "Barth patents" invalid. The first two had been declared invalid in September 2011. Rambus had used these patents to win infringement lawsuits against Nvidia Corp and
Hewlett-Packard. However, on June 28, 2013, The Court of Appeals for the Federal Circuit reversed the USPTO and the '109 Barth patent's validity was reinstated: "In conclusion, the Board's determination that all 25 claims of the '109 Patent are invalid as anticipated by Farmwald is not supported by substantial evidence. Accordingly, this court reverses."
Federal Trade Commission antitrust suits In May 2002, the United States
Federal Trade Commission (FTC) filed charges against Rambus for antitrust violations. Specifically, the FTC complaint asserted that through the use of patent continuations and divisionals, Rambus pursued a strategy of expanding the scope of its patent claims to encompass the emerging SDRAM standard. The FTC's antitrust allegations against Rambus went to trial in the summer of 2003 after the organization formally accused Rambus of anti-competitive behavior the previous June, itself the result of an investigation launched in May 2002 at the behest of the memory manufacturers. The FTC's chief administrative-law judge, Stephen J. McGuire, dismissed the antitrust claims against Rambus in 2006, saying that the memory industry had no reasonable alternatives to Rambus technology and was aware of the potential scope of Rambus patent rights, according to the company. Soon after, FTC investigators filed a brief to appeal against that ruling. On August 2, 2006, the FTC overturned McGuire's ruling, stating that Rambus illegally monopolized the memory industry under section 2 of the
Sherman Antitrust Act, and also practiced deception that violated section 5 of the
Federal Trade Commission Act. February 5, 2007, the FTC issued a ruling that limits maximum royalties that Rambus may demand from manufacturers of
dynamic random-access memory (DRAM), which was set to 0.5% for DDR SDRAM for 3 years from the date the commission's Order is issued and then going to 0; while SDRAM's maximum royalty was set to 0.25%. The Commission claimed that halving the DDR SDRAM rate for SDRAM would reflect the fact that while DDR SDRAM utilizes four of the relevant Rambus technologies, SDRAM uses only two. In addition to collecting fees for DRAM chips, Rambus will also be able to receive 0.5% and 1.0% royalties for SDRAM and DDR SDRAM memory controllers or other non-memory chip components respectively. However, the ruling did not prohibit Rambus from collecting royalties on products based on DDR2 SDRAM, GDDR2, and other JEDEC post-DDR memory standards. Rambus has appealed the FTC Opinion/Remedy and awaits a court date for the appeal. On March 26, 2008, the jury of the
U.S. District Court for the Northern District of California determined that had Rambus acted properly while a member of the standard-setting organization JEDEC during its participating in the early 1990s, finding that the memory manufacturers did not meet their burden of proving antitrust and fraud claims. On April 22, 2008, the
U.S. Court of Appeals for the D.C. Circuit overturned the FTC reversal of McGuire's 2006 ruling, saying that the FTC had not established that Rambus had harmed the competition. On February 23, 2009, the
U.S. Supreme Court rejected the bids by the FTC to impose royalty sanctions on Rambus via antitrust penalties.
European Commission antitrust suit July 30, 2007, the
European Commission launched antitrust investigations against Rambus, taking the view that Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents which it later claimed were relevant to the adopted standard. This type of behavior is known as a "
patent ambush". Against this background, the Commission provisionally considered that Rambus breached the EC Treaty's rules on abuse of a dominant market position (Article 82 EC Treaty) by subsequently claiming unreasonable royalties for the use of those relevant patents. The commission's preliminary view was that without its "patent ambush", Rambus would not have been able to charge the royalty rates it currently does.
Other settlements In 2013 and 2014, Rambus settled and agreed on licensing terms with several of the companies involved in long-running disputes. On December 13, 2013, Rambus entered an agreement with Micron to let the latter use some of its patents, in exchange for $280 million worth of royalties over seven years. In June 2013, the company settled with SK Hynix, with Hynix paying $240 million to settle the disputes. In March 2014, Rambus and Nanya signed a 5-year patent licensing agreement, settling earlier claims. Rambus said these deals were part of a change in strategy to a less litigious, more collaborative approach, distancing themselves from accusations of
patent trolling. Ronald Black, Rambus's CEO, said, "Somehow we got thrown into the patent troll bunch ... This is just not the case." == See also ==