Rambus wins -- who loses?

The Court of Appeals overturned the Federal Trade Commission antitrust sanctions against Rambus, which in turn overturned an earlier FTC administrative law judge who ruled in favor of Rambus. The whole issue was whether Rambus was honest about its patents in a timely fashion while JEDEC was making a RDRAM standard.

The case of Rambus and its IP strategies are among the most controversial issue in IP and standards. I would say “among” only because as with certain other topics, only one side of the story tends to get reported and many would just as soon see the company lynched. Rambus did win one trial alleging patent infringement by big vendors, who never really wanted to pay royalties.

Even for those (few) who sympathize with Rambus, the ruling has the unfortunate effect of introducing turmoil into many aspects of IP and standardization. The Rambus decision was previously a bright line that SDO managers (and participants) could count on. Now, we need to see whether Rambus’ escape is merely a process issue (JEDEC left a loophole that meant Rambus couldn’t be punished) or if it sets a more general precedent — theoretical or practical — that makes it impossible for SDOs to prevent gaming of the system.

Perhaps the 1995 case that Dell settled would be the precedent for now. My sense is that absent FTC v. Rambus we will need a new legal decision (or administrative act upheld by a court) to set the boundaries of gaming the system. There have been very few cases on this issue that have gone to trial in the past 15 years, so it might be another 5 years before we get a controlling precedent. That uncertainty would be good for law firm billable hours but bad for everyone else.