The Way for Rambus to Win

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By NicdaGreek
September 16, 2003

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In looking at the recent FTC briefs, and reviewing the various strategies, a couple of thoughts came to mind which reminded me of a trial I was involved in some years ago. So first, a little history.

In our case, it was a dispute between, say A and B, where A and B were partners. A dispute came up, and Party B ended up absconding with some of the IP assets that our client (A) felt belonged to them instead. We were trying to get the Court to re-assign the assets back to us. This was no mean feat, since all the assets were now recorded with various agencies in B's name. There are no shortage of procedural/evidentiary presumptions that work against you when you try to do this kind of thing, so we knew were facing up uphill battle. In fact, our research revealed no successful case.

At first glance, everyone thought, well, we will just argue that all of these recordations are null and void, because B recorded all these assets without telling us, and without our consent. This would have been the simple approach, and we thought it was a slam-dunk the Judge would have bought the argument, because a lot of B's behavior seemed kind of sketchy anyway.

But then, in the middle of the case, a very complex fact scenario developed; it became apparent that B's actions were apparently known to A. In fact, A acknowledged such in clear and unmistakable admissions. So all the time that B was recording these assets, A did nothing.

So now what were we going to do? Everyone was panicked, because the facts looked 180 degrees opposite of what we were arguing.

SO, we invented another theory.

What we argued was the following

"Well, of course B did all these things. They were our partner, and they were doing these acts in furtherance of the partnership relationship. We expected this type of behavior from them, and did not look at it as any kind of violation, since they were paying and protecting the IP, essentially on our behalf."

The other side did not know what to do. They were now stuck, because everything their client had done before was not being characterized as "bad," but as "good." This was just another spin to it that they could not deal with. The Judge adopted our theory, and made them give back the assets, finding that they were essentially acting "reasonably" but as our agent.

What does this have to do with Rambus you say? Well, it deals with a theory I call making the facts fit the model.

I believe there is no way Rambus can win by telling the ALJ that all the other DRAM participants in JEDEC are liars and scoundrels. I know this is going to break the hearts of some of the diehards, but it is a losing strategy. No Judge is ever going to believe that Rambus is the saint, and all the rest are devils. (note: conspiracy theorists who think I work for Micron can now skip the rest of the posting)

In sum, what Rambus must do (and I see it already in their papers to some extent) is to argue that the CC theory asks too much, and essentially requires that the ALJ find that everyone in JEDEC was acting unreasonably. In contrast, we Rambus believe that everyone was acting reasonably pursuant to a very narrow rule. We think all the JEDEC participants acted in good faith.

The hypothesis is simple: there were two possible "interpretations" of the disclosure rule as advanced by the parties in the briefs; one that required all applications "related" to the standard (CC); and one that required only patents that had claims which read on the standard (Rambus) (never mind for a moment that I disagree with both LOL). Now, looking backwards in time, and observing the behavior of the parties, which model best fits the facts?

If you read the current materials, CC seems to have become even more aggressive, and is completely swinging for the fences. They believe now that they can get away with a rule (related to) that is even broader than the CAFC ruling (i.e., would a reasonable competitor believe a license was required). This is in contrast to their earlier filings with the ALJ, where they seemed to suggest that they would put on a case consistent with the CAFC opinion. Again, regardless of the CAFC, I think CC feels they can do this, because it is essentially an SSO/contract issue and not one which the CAFC has any particular expertise, or exclusive jurisdiction.

Nonetheless Rambus can point to the fact that under the CC model, given how loose it is, everyone would have been in violation of the rules. Is it reasonable to believe that they would adopt a rule that is not possible to comply with? NO. Is it reasonable to believe that the rule was in fact violated by everyone? NO (I think Rambus has the goods on the latter point, because given the CC approach, the many examples that they pointed out from third parties would all run afoul of such type of rule.)

So any theory which requires that dozens of companies and hundreds of people are all in violation does not make any sense, and I think the ALJ can easily see this.

On the other hand, given how few disclosures were actually made, Rambus can point to these as consistent with its model of the case � i.e., only issued claims. This allows them the opportunity of taking the "high ground" as well, and pointing out that the behavior of the Microns of the world is consistent with an honor code that is far less comprehensive.

So any theory which points out that the facts show an overall behavior consistent with people acting properly has a much higher chance of winning.

In my mind, this is why you don't see Stone sitting up there, pelting the witnesses with stones, calling them names, whatever. He'd rather the Judge not believe that the Rambus case requires that they call every witness a liar.

As for the testimony given by these witnesses NOW about what they believed THEN, I think he can easily paint it as after-the-fact self-serving testimony, which is completely inconsistent with their earlier actions � which carry more weight.

I will be interested to hear if anyone goes to the closing arguments, and gets to hear what Stone says, and how it says it. My "bet" if you will, is that he simply draws a bright line on a piece of paper and says, "Your honor, if A is the rule as CC suggests, you must find that 100 people acted in bad faith, and that a dozen companies all violated a rule that could expose them to significant liability. If B is the rule, as Rambus suggests, everyone was acting in good faith. Which do you think is the more likely scenario as understood at the time?"

This tactic has the advantage, too, of allowing the ALJ an easy out, and not forcing him to review dozens of patents, claims, etc. to see if they were "related" or not. Never underestimate the laziness factor LOL.

So I think the human nature factor has to be played well at the end. If they can focus on getting him to buy a consistent model that appeals to basic common sense, and simultaneously gets rid of a huge evidentiary headache, I think their chances are improved.

Da Greek

PS: I am readying for a trip to Asia, so I will probably not post or respond after tomorrow until later in the week or next weekend.

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