Rambus, Patents, and Standards

The system DOES indeed work — just slowly sometimes.  Every once in a while I get embroiled in discussions with people that believe (a.) the sky IS falling with respect to patents and standards and hence (b.) we need to get all patent holders to forfeit their future business rights in overwrought and strict IPR policies within standards development organizations.  The Rambus abuse is universally the example of the danger, in a similar way that the SCO Group lawsuit is the singular data point extremists use when trying to spread open source litigation FUD. 

Occasionally I run into the debate that (c.) patents are so important in terms of value to a company that all other industry practices (e.g. standards, collaborative development, etc.) are subservient to this incredible tool, but these debates were typically inside Microsoft with its extreme IP fetish and can safely be ignored. 

The Rambus case is a classic case of submarine patents in a standards setting forum, cheating the rules, and litigating for fun and profit.  Today the U.S. Federal Trade Commission reversed its previous ruling and has slammed Rambus appropriately, stating that their practices were anticompetitive, and beginning the process of damage calculation.  Brilliant!  Here's the quotable bits:

... the Commission found that, through a course of deceptive conduct, Rambus was able to distort a critical standard-setting process and engage in an anticompetitive “hold up” of the computer memory industry. The Commission held that Rambus’s acts of deception constituted exclusionary conduct under Section 2 of the Sherman Act and contributed significantly to Rambus’s acquisition of monopoly power in the four relevant markets. The Commission has ordered additional briefings to determine the appropriate remedy for “the substantial competitive harm that Rambus’s course of deceptive conduct has inflicted.”

Here are the links:

• The FTC announcement is here.
• Andy Updegrove's excellent write-up is here, providing the historical background.  (Andy filed a friend of the court brief in this case, and has deep knowledge.)
• The FTC docket is here if you want the complete historical legal depth. 

I've long maintained that patents are simply tickets to negotiations. Occasionally the negotiations go awry.  Sometimes people abuse the rules.  In the end, the economics of the system works. 

Post to del.icio.us

Comments

[Jack Lane]

What, no ALJ ruling of the FTC Initial Decision on the Rambus case? NO FRAUD
What, no comment on the CAFC, which overturned the VA case Rambus V Infinion? NO REQUIREMENT TO DISCLOSE!
What, no comment from the Hynix case and the 37-0 ruling by a Federal Jury in Rambus' favor? Patents are valid and infringed.
Have you even been following this situation?
The FTC is corrupt, has always been the attack dog for MU and the other theives and its ruling will eventually be overturned in a real court

[stephe]

Jack: The point of the post isn't the validity of the Rambus patent. It's their anticompetitive abuse of the system. They joined a standards organization to see where it was going, quit, attempted (successfully) to patent ahead of the standard, such that when the standard was published every one that attempted to implement the standard was infringing the patent.

Even if the FTC is as corrupt as you say, it is appropriate for the government to intervene here.

Rambus's actions have had punishing consequences to the entire standards industry.