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Micron's suit accuses Rambus of trying to trick DRAM makers
Complaint says industry being coerced with 'exorbitant royalties' in licensing negotiations







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WASHINGTON -- Charging Rambus Inc. with trying to "coerce exorbitant royalties" from the DRAM industry, Micron Technology Inc.'s antitrust lawsuit will determine the validity of key patents that serve as the foundation for much of the computing world's memory requirements.

The suit, filed on Monday in U.S. District Court in Delaware, seeks to invalidate patents Rambus holds pertaining to a synchronous interface used in billions of memory devices, processors, and core-logic chipsets and seeks unspecified damages from Rambus as well as treble punitive damages allowed under antitrust law.

Boise, Idaho-based Micron alleges that Rambus is unduly coercing makers of SDRAM and double-data-rate SDRAM chips as part of a strategy "to file lawsuits against those manufacturers who do not agree to Rambus' non-negotiable license terms." Micron also accuses Rambus of tricking DRAM makers by keeping secret its development plans while collecting information in industry standards meetings with other suppliers.

Reacting to the suit today, Rambus officials denied charges of antitrust behavior in the company's negotiations of new licensing pacts (see today's story).

Mountain View, Calif.-based Rambus is the developer the Direct Rambus DRAM interface, which is competing with synchronous DDR memories in new computer systems, but early this year the company also claimed rights to technology that serves as the basis for SDRAM designs. The company has negotiated agreements with Oki, Toshiba, and Hitachi, but recently filed suit against Infineon Technologies AG of Munich when negotiations broke down. That lawsuit is pending in a Richmond, Va., federal court (see Aug. 11 story).

According to Micron, Rambus is seeking to gain an unfair competitive advantage for Direct Rambus DRAM technology -- which to date has been more expensive than SDRAM to manufacture -- and as much as "admitted that it intends to charge more for licenses to SDRAM products that it views as a threat to its own RDRAM technology," said a copy of the suit.

In its response to the suit, Rambus issued a statement today saying it had initiated negotiations with Micron to license intellectual property for use in SDRAM and DDR SDRAMs. Rambus said Micron chose to litigate rather than negotiate.

However, in its suit Micron said it took legal action because it was expecting to be sued by Rambus. Micron suggested that it was being targeted by Rambus because it has been a prime advocate of DDR SDRAM -- even as it has continued to develop Direct RDRAM under an existing license. A Micron spokesman said despite the complaint, the chip maker will continue with plans to validate its Rambus prototypes.

The move follows word earlier this year that an ad hoc group of DRAM vendors was considering filing a suit with the Federal Trade Commission. Micron -- which was among the member companies said to be pondering the action -- declined to comment about possible plans to take its case to the FTC.

The looming court battle is expected to hinge on legal precedent set by Dell Computer Corp., which was found in 1996 by a federal court to have sought out royalties for patents that the company helped draft as part of open industry standards deliberations. A similar case involving Wang Laboratories was settled out of court, but is also expected to play a part in Micron's legal attack plan.

Specifically, Micron is claiming that industry procedures required Rambus to disclose any pending patents related to the development of a synchronous interface when the topic was discussed from 1991 through 1996 during open JEDEC standards forums. By failing to disclose its development plans, Rambus in effect obtained information, which it then subverted to preempt competitors, Micron is charging.

"Instead of offering a royalty-free or other reasonable license when it was obligated to do so, Rambus waited until the standards had been adopted and the industry had spent billions of dollars in reliance on the standards," the suit alleges.

The same argument was presented earlier this year when Hitachi Ltd. fell under Rambus' legal crosshairs, but has never endured a legal test. Hitachi settled with Rambus before the case was brought to trial.











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