The FTC's Answer to Rambus

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By idotrash
April 11, 2003

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The FTC's Answer to Rambus's Motion for Summary Judgment is nothing short of a preview to their case presentation. If you set aside the bitter tone and confrontational presentation, there are actually a number of positive concessions that favor Rambus within this Motion:

1. The Disclosure Duty

The Motion addresses this fundamental issue now by characterizing Rambus as potentially in "technical compliance" with the "literal" requirements of any patent disclosure duty. CC urges the ALJ to give equal consideration to the Prost dissent and amici to the en banc rehearing request if the ALJ gives any consideration at all to the Majority CAFC Ruling---regarding compliance with the disclosure duty. You have to wonder if the ALJ will do this given the en banc denial.

This Motion announces quite loudly ("In the end, this case is not about whether JEDEC's rules were technically violated") that the FTC case was never "all about" breach of the disclosure duty alone. The disclosure duty alone was never the "core issue" that Rambus alleges (if you look at the original complaint you can see it was clearly a core issue--specifically identified as the basis from which wrongful conduct flowed --not merely "technical noncompliance"). The Motion appears to relegate the breach of duty to a very low spot on the totem pole of Rambus Wrongs (just one of "many wrongs" that comprised the breach of many duties).

What is this case now ALL about: "Rambus subversion of JEDEC's open standards process through unethical and deceptive acts..." Rambus's simple presence at JEDEC sent JEDEC's member's "signals"---Rambus's act here being mere presence! The view throughout is that because JEDEC's purpose was an "open standard", free of patent coverage, Rambus's subversion included undisclosed efforts to craft claims on the proposed standards without telling anybody at JEDEC... In other words, Rambus's conduct was at odds with JEDEC's "fundamental standardization purpose". The Motion does mention, however, that standards that call for the use of patents while were to be avoided were not barred and that even a JEDEC participant could decline RAND rates (whatever they may be)---so it still comes down to some failed disclosure even according to CC.

A critical missing element in this vague assault is this: What should Rambus have disclosed under this subversion theory---if its pending patent applications --none would have alerted JEDEC to SDRAM coverage because none read on the standard--no doubt these would be merely misleading even had they been disclosed. The implied disclosure is Rambus's intent to file claims that could reach SDRAM or an implied disclosure that its 898 application could form a basis for future claims on SDRAM. But no where does CC actually say what "should have" been disclosed so as not to "subvert" JEDEC's standard development process.

2. New Duties Rising

CC says they now intend to prove many more violations of JEDEC's policies and procedures and not "simply" the breach of the patent disclosure duty. Apparently while the proof of the "many more" are reserved for trial --- one is specifically mentioned in the Motion---the duty of good faith that Rambus owed JEDEC and breached.

A good deal of the Motion is devoted to showing exactly how this "good faith" duty came about and indeed the scope of the duty and why Rambus actions constituted a breach. The scope of the duty within the JEDEC standard setting process and its breach by Rambus are all defined by the expectations of selected JEDEC participants. Everybody knew this and no one expected that and so on. Even Rambus knew this or that...and understood the "expectations"...

Essentially, if the disclosure duties did not require Rambus to disclose its belief that the 898 could be a basis for claims reading on SDRAM or its intention to seek such claims-- the general "good faith" duty did.

At the CAFC, Rambus did an excellent job of showing that even JEDEC did not expect to rely on a member's revealing its future plans including its plans to modify or amend patent applications even if they subsequently covered by claims the standardized technology.

So what did the good faith duty require Rambus to do? This is left largely unaddressed.

Should the "good faith" duty serve to fill in the holes of the disclosure duty? CC apparently thinks so.

3. MELCO and "the others"

This is perhaps the most interesting part. CC says that Rambus evidence "suggest only that fewer than five JEDEC members may have had some vague suspicion about potential patent issues relating to Rambus." (Including MELCO). So five JEDEC members including MELCO may have been aware that SDRAM MAY infringe Rambus patents.(CC should title their claims ---the great JEDEC subversion and deception Less 5 of the "others") CC calls the MELCO documents "isolated" (and implies they are not important). Yet the MELCO documents say: "there is a need to examine the specifications of the patent claims to determine whether individual technologies used independently will infringe on the RAMBUS patent...." This is hardly a "vague suspicion"---it is an explicit statement of what CC appears to urge that Rambus "should have said" in its "speak up" requirement that it attaches to Rambus. It is hardly necessary to speak up if the JEDEC participants already knew or should have known that the inventions could be claimed as individual technologies.

But CC defends this as limited to MELCO and the other 4, because Rambus's disclosure duty extended to "the JEDEC organization and the entire JEDEC membership."

MELCO says something different: With just the specification (clearly disclosed by Rambus), you could determine if the technologies individually could be claimed. The MELCO documents stand for the proposition that JEDEC the 'Whole' should have known that its cherry picking could have landed the standardized technology in patentland.

4. DDR

CC says the DDR question has great significance in terms of the worldwide market for chips.

Calling Rambus's request for partial judgment a 'temporal sleight of a hand', CC just repeats it broad based charge that Rambus "over nearly a decade fundamentally sought to undermine and subvert the institutional purposes of JEDEC in an effort to secure patent rights over JEDEC's widely adopted dram standards..."

BUT, Rambus was not longer "standing" at the meetings and by mere presence sending signals---so the subversion by presence and bad faith acts must be from the Rambus ghosts that haunted JEDEC long after Rambus's departure. Rambus cannot rely on the "formalistic" approaches of Judge Payne or the CAFC according to CC but they fail absolutely to present any additional real evidence other than to say that subversion and bad faith are different animals than the fraud verdict.

The membership timeline, to the extent it is addressed at all, simply says that because Rambus was present when some of the technologies similar to DDR were discussed while Rambus was a member...a disclosure duty existed. Or presumably if not that duty, some of the many other duties Rambus owed JEDEC existed to force some disclosure that Rambus did not make. All in the broad-brush context of subversion and bad faith.

5. Case Posture

It is clear CC may well retreat from the stated breach of the disclosure duty as in the original complaint admitting at least the possibility of 'technical compliance'. Bad faith conduct, deception, corruption of the JEDEC process and subversion are now front and center. These proofs rely on defining exactly what the disclosure expectations could have been, and not what they should have been, and equally important what the expectations could not have been and all matter in-between. I think CC may find itself simply trying to fill in the holes of a poorly drafted disclosure policy.

I think this is a far more difficult proof for CC here given the facts and in that sense, the case posture has moved however slightly in Rambus's favor.

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