Technical win for Rambus in patents case

R O B E R T N E U B E C K E R IE E E S P E C T R U M • A pr il 2 00 3 LAW • In a wake-up call to standards bodies nationwide, in January a federal appeals court all but exonerated semiconductor designer Rambus Inc. (Los Altos, Calif.) in connection with its notoriously peekaboo approach to patent disclosure during a standards-setting proceeding. The ruling, if it stands, erases the May 2001 verdict of a federal jury in Virginia. That jury had found that Rambus committed civil fraud by concealing pending patents until after they had been incorporated into a standard that was adopted by the JEDEC Solid State Technology Association (Arlington, Va.), of which the company was once a member. In the 19 January 2003 ruling, a divided panel of the U.S. Court of Appeals for the Federal Circuit complained of a “staggering lack of defining details” in the patentdisclosure policy of JEDEC (formerly the Joint Electron Device Engineering Council). The majority then gave that policy an extremely narrow interpretation— too narrow to support a finding that Rambus had violated it. Infineon Technologies AG (Munich), the chipmaker that had accused the California company of fraud, has asked the full, 12-judge Court of Appeals for the Federal Circuit to rehear the case. If the request is denied—as such requests usually are—Infineon could also seek U.S. Supreme Court review. The majority’s ruling can be read as a strong exhortation to standards-making bodies to employ greater precision in defining what they expect participants to disclose and when. Amy Marasco, vice president and general counsel at the American National Standards Institute (ANSI, New York City), cautions that the appeals court carefully limited its language to details of the Rambus case. Yet “ANSI believes that the court’s implied criticism with regard to the clarity of the JEDEC patent policy serves as an invitation for standardssetting bodies to review their own respective patent policies and consider whether their particular policy continues to meet that organization’s needs and objectives,” Marasco told IEEE Spectrum. The finding that Rambus’s officials had not violated JEDEC’s disclosure policy was especially striking because the two-judge majority conceded that some of Rambus’s own officials may well have believed that they were violating JEDEC’s policy at the time. “Rambus’s mistaken belief...does not substitute for the proof required by the objective patent policy,” Judge Randall Rader wrote for the majority. Meanwhile, especially if the ruling stands, attorneys for standards bodies such as ANSI, the American Society of Mechanical Engineers, and the IEEE itself may want to pore over their groups’ disclosure policies to see whether they need shoring up in light of the opinion, which does not appear to have been triggered by ambiguities unique to the JEDEC policy. Even with its stunning appellate victory, Rambus is hardly out of the woods. This month (April) it must defend itself in an enforcement proceeding in which the U.S. Federal Trade Commission (FTC, Washington, D.C. ) alleges that Rambus’s conduct before JEDEC amounted to an “unfair method of competition” prohibited by federal law. If it prevails, the FTC could bar Rambus from enforcing, anywhere in the world, key patents relating to dynamic random-access memory (DRAM) technologies. The Federal Circuit court’s views will not be legally binding in the FTC matter, which is proceeding apace. Technical Win for Rambus In Patents Case