RealTime IT News

DDR2 Held Up By Rambus' Legal Woes

Computer memory maker Rambus is getting the short end of the stick when it comes to its next generation dynamic random access memory (DRAM), according to a report published this week.

Analysts with American Technology Research said they are concerned that the company is not getting its fair share of licensing fees for all of its DDR2 patents.

Though DDR2 is a standard faster bandwidth memory technology, Rambus owns several of the key patents involved. The four-page brief cites Rambus' legal battle with Infineon Technologies as the main culprit for creating such a loophole.

"The fact that Rambus' own partners have not signed a license with Rambus suggests a potential for a protracted legal standoff," American Technology Research analyst Erach Desai said in a newsletter to investors. "This, to us, is emerging to be one of the biggest concerns about Rambus' future royalty prospects from the DRAM market."

Samsung and Toshiba -- both Rambus partners -- have started limited trials of DDR2, which is expected to replace SDRAM and first generation DDR as the technology of choice for computer memory. Shipping could start as early as October 2004. The crossover point from DDR to DDR2 is expected to happen in 2005 or even 2006, according to industry analysts.

"While Rambus' management has saber-rattled about bringing civil antitrust charges of their own against the holdouts for collusion, evidence that came from the Federal Trade Commission's case (last summer), we have increasingly opined that this is unlikely," Desai said. "Samsung and Toshiba, among the top licensees of Rambus' technology, do not want to be dragged into this mess (even simply by association) in our assessment."

Rambus General Counsel John Danforth told internetnews.com that DDR2 uses some of the very same features currently being discussed in the company's suit with Infineon Technologies, , but denied that any of its partners are getting a so-called free ride.

"We are confident enough with our patent position, that we believe that those who have contracts with us will see the wisdom of extending those licenses to cover new forms of synchronous DRAM including DDR2" he said.

Executives with Samsung and Toshiba were not immediately available for comment.

The core legal battle is a back and forth battle between Los Altos, Calif.-based Rambus and Munich-based Infineon. Rambus is seeking royalty payments from Infineon for its patents relating to the next generation of DDR memory. The technology is used in a variety of products including PCs, servers, consumer electronics products, and telecommunications routers and switches.

A retrial date for the Rambus v. Infineon case had been set for June 10 in Virginia, but earlier this week a Federal Judge Robert Payne said there are a number of pretrial issues that must be resolved. The judge delayed the proceedings until the fall.

Desai said with the legal delay, Samsung and Toshiba have effectively become "holdouts" on DDR2 and there is really no incentive for Infineon to settle.

"We suspect that the list of 'holdouts' on DDR2 grows beyond the current litigants," Desai said.

In related news, the FTC filed an appeal of its case against Rambus last week. Court papers show the FTC remains firm in its accusations even after Chief Administrative Law Judge (ALJ) Stephen McGuire dismissed the antitrust lawsuit.

Meanwhile, sources close to the case say the Department of Justice is expected to hand out indictments in the next two to three months as part of its investigation into price collusion by the DRAM manufacturers like Micron Technology, Infineon, Samsung, Hitachi, Hyundai, and Hynix.

While Rambus has said there is no direct link between the Infineon case and the DoJ's case, the company has said the investigation supports its claims that it was getting squeezed out of the marketplace as a result of its synchronous memory patents obtained during its membership on the Joint Electron Devices Engineering Council (JEDEC).