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Hitachi's antitrust case against Rambus

Alleges abuse, manipulation of the press, and breach of JEDEC rules

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The Register has now seen a copy of Hitachi's deposition to a US court, countering a Rambus case and at the same time detailing its arguments that the firm is engaging in alleged antitrust activities. The civil action was placed before Judge Gregory Sleet and numbered 00-029 in a Delaware District Court at the end of last week. The original Rambus legal action refers to both memory products and HSA SH series microprocessors, which are alleged to infringe Rambus patents, allegations which Hitachi strenously denies. Hitachi counterclaims that Rambus has engaged in anti-competitive, exclusionary and unfair conduct directed at its competitors, intended to monopolise and unfairly restrain trade, as well as to engage in unfair competition in markets for SDRAM memory chips and support memory chips. The Japanese firm claims that Rambus has intentionally and improperly violated JEDEC's rules. According to Hitachi, this body coordinated the development of a standard for SDRAM, and Rambus was a member of JEDEC then and attended the meetings. But, alleges Hitachi: "Instead of participating in the JEDEC standard-setting process in good faith, Rambus subverted the process, attempting to use it as a vehicle to control illegally the relevant markets." The industry body required Rambus to disclose the existence of patents and patents pending, but the firm "improperly revised" its patents and "subverted the process", and indeed used what it learned from the JEDEC meetings, and from other semiconductor manufacturers participating in the meetings, to revise its pending patents Any products built subsequently by any manufacturers using the JEDEC SDRAM specifications would infringe Rambus patents. Further, claims Hitachi, Rambus has behaved unfairly and uncompetitively by extending the scope of its patent portfolio by unfair licensing agreements and illegal tying arrangements. In a document attached to Hitachi's claims, the firm says that it, Samsung, NEC and others have paid Rambus millions of dollars in fees. These, claim Hitachi, impose substantial and unwanted obligations on the licensees, including a clause which means that the licensees have to take out further licences on many other Rambus patents. Memory firms also have to build memories to Rambus' requirements, and use Rambus controlled tests and know-how. Hitachi points to a case between two JEDEC members, Wang Labs and Mitsubishi in the early 90s. Wang sued Mitsubishi alleging patent infringement, but the latter countersued, using a similar argument that the former had breached JEDEC rules. The case was eventually settled in favour of Mitsubishi. After this case, JEDEC expressly revised its rules to include a requirement to disclose any patents. This document also includes a reference to a 1995 case between the Federal Trade Commission (FTC) and Dell. Subsequently, the FTC issued a consent decree on Dell to prevent it from enforcing a patent it had not disclosed to an industry standards body. According to Hitachi, a month after the announcement of the consent decree, Rambus said it would leave JEDEC. It sent a letter to the committee saying: " Recently at JEDEC meetings the subject of Rambus patents has been raised. Rambus plans to continue to license its proprietary technology on terms that are consistent with the business plan of Rambus, and those terms may not be consistent with the terms set by standards bodies, including JEDEC." If Rambus wins its case against Hitachi, the document says that Rambus will control the technology market for high speed synchronous memory, as it is the only significant architecture which competes with the open JEDEC standard. Hitachi claims that Rambus has manipulated the press and issued a complaint to the US International Trade Commission a day after Hitachi and Sega struck a strategic alliance, as well as issuing press releases to undermine the company. One patent concerns the so-called "105 Patent", US patent number 5,915,105, called Integrated Circuit IO using a high performance bus interface. Other patents being called into question are 5,953,263 titled Synchronous Memory Device having a Programmable Register and Method of Controlling Same. Another patent which Rambus alleges Hitachi is breaching is No. 5,954,804, called Synchronous Memory Device having an Internal Register. Perhaps the most important patent Rambus is alleging infringes its rights is 5,995,443, called Synchronous Memory Device. If Rambus wins this one, other semiconductor firms might face similar problems. Hitachi is denying all these allegations. Hitachi has lodged what US law describes as Affirmative Defenses. The first draws attention to the memory standards body JEDEC (Joint Electronic Devices Engineering Council) and claims improper conduct by Rambus. It says: "By reason of Rambus’ misconduct relating to standard-setting activities and organizations, including but not limited to JEDEC, if one or more of the Patents-in-Suit cover the JEDEC standard, Rambus is obligated to license the Patents-in-Suit without charge or under reasonable terms and conditions that are demonstrably free of unfair discrimination, such that the defendants may make, use, sell, or offer to sell products which implement the JEDEC or other standards." The second defence says that the patents in question are unenforceable, and invokes the Sherman antitrust act, saying: " The Patents-in-Suit are unenforceable due to misuse and/or inequitable conduct and/or violation of the antitrust laws, including the Sherman Act, due to the actions and concealment of Rambus in connection with standard-setting activities and participation in standards-setting organizations, including but not limited to JEDEC; Rambus’ participation in the creation of industry sanctioned and/or de facto standards for Synchronous DRAMs; and Rambus’ illegal attempts to eliminate or capture any JEDEC-approved standards for Synchronous DRAM technology which might compete with proprietary Rambus Synchronous DRAM technology. Attempts by Rambus to enforce the Patents-in-Suit constitute misuse, monopolization, an attempt to monopolize, and/or an unlawful restraint of trade." Hitachi's third defence is that the patents in question are unenforceable because Rambus made third parties, including itself, to make products under Rambus dictated specs. These, the defence says: "Discriminate against non-Rambus products and alternative technologies, thereby excluding potential competitors from the market and/or raising the costs of entry into the market by competitors." The fourth defence claims that the Rambus patents are also unenforceable because the firm failed to notify JEDEC that industry standard specs for synchronous memory could infringe its patents. A number of other defences cover legal niceties, but defence number seven is of interest. It says: " By reason of Rambus’ conduct, including its participation in standards-setting activities and organizations including but not limited to JEDEC, Rambus has granted the defendants an implied royalty-free license under the Patents-in-Suit to make, use, sell, or offer to sell products containing the alleged inventions." ®

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