Patent Law

Not Untoward

By Gary Odom and Jordan Kuhn

Rambus got patents covering computer memory standards, set by JEDEC, an industry group. Defendant chip makers Hynix, Samsung, Nanya and Micron went after Rambus for bad juju, in the Northern District of California. Defendants lost.

Following a seven-and-a-half week consolidated trial on the jury issues set forth in the parties' Joint Pretrial Statement filed January 14, 2008, the jury returned a verdict in favor of Rambus and against the Manufacturers... Specifically, the jury found that Rambus did not commit monopolization or attempted monopolization because it did not engage in anticompetitive conduct... The jury also found that Rambus did not commit fraud because it made no false misrepresentations and uttered no half-truths... Finally, the jury found that Rambus did not commit fraud because JEDEC members did not share a clearly defined expectation that members would disclose relevant information they had about patent applications or the intent to file patent applications on technology being considered for adoption as a JEDEC standard.

Defendants requested a retrial, which was denied by Judge Ronald M. Whyte. [ruling]

JEDEC didn't require patent holders to show their cards.

This court is not the first to have concluded that JEDEC's disclosure policies were unclear. The Federal Circuit remarked that the disclosure policies featured "a staggering lack of defining details." Rambus Inc. v. Infineon Technologies AG, 318 F.3d 1081, 1102 (Fed. Cir. 2003). It further explained that "[w]hen direct competitors participate in an open standards committee, their work necessitates a written patent policy with clear guidance on the committee's intellectual property position." Id. The court therefore held that the written policies of JEDEC could not "provide a firm basis for the disclosure duty necessary for a fraud verdict." Id.

Whining about "strong words" wasn't a reason for a retrial.

The Manufacturers contend that the argument by Rambus's attorney that the Manufacturers "took" Rambus's inventions was highly prejudicial. This contention has no merit. Not only was there substantial evidence to support the argument, it was appropriate for Rambus to counter the Manufacturers' contention that the standards were independently developed from the "tool box" of the reasonably skilled memory engineer without contribution from anything from Rambus. However, evidence showed that the JEDEC members had available to them during the development of the standards Rambus's PCT application. Other evidence suggested the Manufacturers utilized Rambus's inventions.

[S]tray instances of "strong words" alone do not justify ordering a new trial on the basis of attorney misconduct. Standard Oil, 347 F.2d at 388. Nor were Rambus's "strong words" any more inflammatory than the closing argument by the Manufacturers. At one point, in explaining the stakes involved in the case, the Manufacturers' counsel argued, "So the billion dollar fabs that we have, you know, the employees could all go away. That's the risk we're taking by having the audacity to challenge this conduct. So, yes, we do have to fight it rather than give in to really what is extortion." Tr. 6075:12-17.

Nor was whining about whatever anti-competitive collusions occurred among defendants reason for mistrial.

In short, the Manufacturers after-the-fact argue that they would have tried their case differently had the court entered a blanket order excluding evidence of their misdeeds. The court declined to enter such an order. Instead, the court presumptively excluded evidence regarding price fixing and boycotts, contingent on how the evidence developed at trial. This was not an erroneous ruling. The Manufacturers were free to introduce whatever evidence they pleased, cognizant of the risk that if evidence of price-fixing or an agreement to boycott was probative in rebutting their evidence, it might come into evidence. To be sure, the Manufacturers had to be careful in their presentation of evidence to exclude the portion of the story in which the Manufacturers allegedly violated the antitrust laws. This was a "sword of Damocles" hanging over the Manufacturers' case, but it was placed there by the Manufacturers' own alleged conduct - not the court's rulings.

Whining about Rambus renegotiating royalty rates was, if anything, evidence in Rambus' favor.

The Manufacturers next argue that the court erred by excluding evidence that Rambus accepted lower royalty rates in renegotiations following its initial losses in the Infineon litigation. In short, the court concluded that evidence of renegotiated royalty rates was irrelevant and, to the extent they were relevant, unfairly prejudicial because explaining their context would be confusing and would take too much time.

Putting aside the merits of the decision, the Manufacturers do not satisfactorily explain how the exclusion of this evidence prejudiced them. The Manufacturers argue that the renegotiated rates are "highly probative" of "Rambus's licensing practices, whether Rambus possessed market power, and whether Rambus would have offered a RAND assurance." If anything, Rambus being forced to accept lower rates in renegotiation suggests Rambus lacked market power.

There were other, somewhat less entertaining arguments, all worth warm spit to the judge.

The Manufacturers have ascribed error to a variety of rulings, but the court finds none, let alone any prejudicial errors.

Full post as published by The Patent Prospector on July 26, 2008 (boomark / email).