RMBS: The Injunction is Not the Issue

Implications: The Internet has been abuzz this week with gossip and assertions about the likelihood that Rambus will get an injunction against Hynix.  That analysis misreads the fight.  On the merits of the patent dispute, Rambus will either get its injunction or get significant cash damages; either is a big win for the firm.  The real question is whether that order will stand up on appeal.

Analysis: Litigation is a significant part of Rambus' business, so it was no surprise that the hearing this week generated substantial attention.  The explicit issue being discussed was whether Hynix would suffer an injunction or be forced to pay substantial cash damages.  And, while everyone seems to have an opinion on that question, my own take is that it does not much matter.  Whether Rambus gets an injunction and then settles for a large royalty rate, or Rambus is denied its injunction and instead is awarded a substantial cash sum, Rambus records a win.  The big issue, then?  Will that win stand up on appeal.

Remember, the litigation out of which the current injunction emerges is the case where (a) Judge Whyte decided that Rambus had not destroyed evidence in a legally culpable way and (b) the Judge plus the jury combined to thus far excuse Rambus' JEDEC subterfuge.  If the appellate court wants to freeze the case and hear these two issues on appeal, any remedy awarded this summer gets converted into (at most) a requirement that Hynix put some money in escrow.  And, if on appeal the appellate court disagrees with either of those decisions, any remedy awarded this summer becomes entirely moot.

I'm not predicting any of that -- or anything -- for the purposes of this post.  Here, all I want to say is that the furor and excitement over the injunction hearing is entirely misplaced.  No matter what the outcome of this hearing, Rambus wins; and, no matter what the outcome of this hearing, the real event is the next event: the decision of whether the remedy is held aside for purposes of appeal.