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Rambus' ‘very high’ DDR royalty revealed

Comes out in damages calculations

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Rambus vs Infineon Rambus has been milking DDR SDRAM vendors to the tune of 3.5 per cent of sales, it has emerged by way of the memory technology developers' legal action against Infineon.

The figure was revealed by University of California at Berkeley professor of business for the University of California David Teece. He told the court yesterday that if Infineon had agreed to Rambus' terms it would have had to pay the memory developer $3 million for the sales in made in the US for the seven months to 10 October 2000 alone.

You can see why Infineon refused to license Rambus' DDR SDRAM patents - a decision that sparked the case against it. True, 3.5 per cent may not seem much, but the sum Rambus as its royalty, long a closely guarded secret, turns out to be significantly higher than anyone in the biz had estimated.

It's also nearly five times the 0.75 per cent royalty Rambus charges for the right to use its single data-rate SDRAM intellectual property. But then SDR SDRAM doesn't compete directly with Rambus' own RDRAM technology.

Analysts had put the figure at between 2 and 2.5 per cent, EBN reports.

Details of the royalty emerged through Rambus' claim that Infineon's refusal to license its patents is giving the Siemens spin-off at an unfair commercial advantage over those companies who have.

That's their problem, argues Infineon - if Samsung, Elpida, NEC, Toshiba and the other Rambus IP licensees don't like it, they can refuse to pay too. Micron and Hynix are also refusing to pay up, and are looking forward to an Infineon victory to boost their own defences against Rambus' lawyers.

"The 3.5 per cent figure is very high - especially when three major competitors aren't paying any royalties," said Needham & Co. analyst Dan Scovel, cited by EBN.

If Infineon loses its case, it stands to pay an even higher rate than that. Last year, in a presentation to analysts, Rambus said "those companies that decide to litigate will pay higher royalty rates". ®

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