RealTime IT News

Is Rambus Right About Collusion?

Rambus' long-standing claim that its rivals conspired to kill its business is sounding more and more plausible, executives said this week.

The company that makes RDRAM computer memory said recent legal developments, including a guilty plea by South Korea's Hynix, are pointing toward an almost certain conclusion: Rambus was the target of a price fixing scheme between 1999 and 2002.

Rambus is suing Hynix and Idaho's Micron for their alleged antitrust behavior. German memory manufacturer Infineon and its parent company Siemens avoided the litigation last month when Infineon settled on a multi-year, multi-million dollar contract.

The California Superior Court for the City and County of San Francisco last Friday overruled a request that had been jointly filed by defendants seeking dismissal of the case.

The United States Department of Justice is still investigating the charges of collusion.

"We take very seriously the complexities and difficulties of these cases, and we continue to direct significant resources to the issues surrounding our newly discovered potential evidence," John Danforth, senior vice president and general counsel at Rambus, said in a statement. "Overall, we are pleased with the events of last week and with the progress that we think they represent. We intend to continue to work though the complexities of these cases as expeditiously as we can -- with the same goal as always, to be fairly compensated for our innovations and to seek appropriate redress for illegal conduct that has harmed us in the past."

Executives with Hynix and Micron were not immediately available for comment.

Recently, the DoJ reached an "amnesty" deal with Micron, which has been cooperating in its investigation of the conspiracy. In December 2003, the DoJ charged Alfred P. Censullo, a regional sales manager at Micron, with obstruction of justice. Censullo pleaded guilty to the charge and admitted to having withheld and altered documents responsive to a grand jury subpoena served on Micron in June 2002. Censullo was sentenced to serve six months of home detention.

The admissions and settlements have DRAM market analysts like Erach Desai, with American Technology Research, wondering out loud about the case against collusion.

"In general, most of these developments are constructive for Rambus," Desai said in a newsletter to subscribers. "While none of these developments brings any material litigation to resolution, collectively they are a positive series of decisions on an otherwise long and arduous legal roadmap."

Desai said the most significant and surprising development since Infineon has settled is that Hynix and Micron are now required to produce all the documents that have previously been given to the DoJ in the unrelated criminal investigation on price-fixing.

"We have been under the assumption that many crucial documents would be 'protected' under the terms of any settlement with the DoJ," Desai said. "This could be a very interesting development for Rambus although we have not read the court ruling and don't fully comprehend what is covered by the "draft protective order.'"

Desai said the other thing to keep an eye on is a slew of upcoming license renewals. A five-year deal between Rambus and Samsung is up for renewal by the end June. So far, Samsung has not formally licensed DDR2 technology from Rambus. The analyst suggests Rambus may have some leverage in the negotiations because of the Infineon settlement as well as the antitrust case.

In addition to its accusations of collusion, Rambus said it is also making progress with its outstanding patent disagreements with Hynix and Micron.

Oral arguments on the Hynix v. Rambus patent case were held this past week in a federal court in San Jose. Judge Ronald Whyte denied Hynix's motion to dismiss the case on Monday. The two sides are expected to let the court know on Wednesday about any issues that the parties could not resolve and set a May 20, 2005 court date to discuss new pretrial and trial dates.

Rambus' patent case against Micron is now pending in the District of Delaware but will more than likely wait until the Hynix case in California plays out before it continues in full earnest.