[Ecommerce] important ruling in Rambus case regarding patents on standards

[James Love]

http://biz.yahoo.com/law/030130/ada5a40a4eb0a706560092cb4c89be0e_1.html

  Law.com
New Standard as Court Rules for Rambus
Thursday January 30, 2:00 am ET
Brenda Sandburg, The Recorder

The U.S. Court of Appeals for the Federal Circuit on Wednesday tried to 
clear up what's required of companies when they sit on a body that sets 
standards for a particular industry.

In a high-profile case involving Los Altos, Calif., computer memory 
developer Rambus Inc., a three-member panel said a company need only 
disclose patents and applications that specifically pertain to the 
standards being set by the body.

That's a big win for Rambus, which has been accused by the Federal Trade 
Commission of antitrust violations for not revealing all of the patents 
it held while it sat on a standards-setting body for semiconductor 
technology.

The case sets a new -- and somewhat liberal -- bar for corporations when 
they disclose their patents. In an opinion by Judge Randall Rader, the 
court clarified that a participant in a standards-setting body is 
required to disclose only claims in patents and applications that 
"reasonably might be necessary to practice the standard."

Rader concluded that Rambus did so as it sat on the Joint Electron 
Devices Engineering Council, the organization that develops standards 
for semiconductor technologies.

"This decision will be required reading among standard-setting bodies 
around the country," said John Danforth, Rambus general counsel.

The court's ruling "endorses a broad reading" of the Rambus patent, 
Danforth said. It also frees the company from "a terrible cloud of 
fraud" relating to its participation on the standards-setting body.

The case has been closely watched by the tech industry, as several 
companies have been embroiled in litigation with Rambus. The company 
does not manufacture its own computer memory devices but develops and 
licenses technologies to companies that manufacture semiconductor memory.

In this instance, Rambus had sued Germany's Infineon Technologies AG and 
its subsidiaries over patents related to dynamic random access memory 
(DRAM) technology. Rambus said Infineon had infringed its patents.

A Virginia U.S. district court found in Infineon's favor. But the 
Federal Circuit ruled that the lower court erred in its interpretation 
of patent claims. Specifically, it disagreed with the construction of 
certain terms in the patents, such as "integrated circuit device" and "bus."

The court also criticized the standards- setting body -- the JEDEC -- 
for not having clear policies. "In this case there is a staggering lack 
of defining details in the ? patent policy," Rader wrote. "When 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."

The court reversed the $2.4 million fraud verdict against Rambus and 
vacated the award of $7 million in attorney fees to Infineon.

Judge Sharon Prost dissented from a portion of the fraud ruling. In her 
dissent, Prost said "substantial evidence supports the jury's verdict 
that Rambus committed actual fraud under Virginia state law" by 
withholding information when JEDEC was setting a standard for certain 
semiconductor technology.

Infineon's attorneys, Kenneth Starr and Christopher Landau, partners in 
the Washington, D.C., office of Kirkland & Ellis, could not be reached 
for comment. But Infineon's Leslie Davis said the company is reviewing 
the court's decision and expects "to request a rehearing with the 
Federal Circuit."


-- 
James Love, Director, Consumer Project on Technlogy
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040