Rambus: Game On

Implications: This week, Rambus begins a jury trial that could significantly affect the firm's future.  At issue, the JEDEC controversy: namely, the question of whether Rambus behaved legally when it involved itself with the JEDEC standard-setting process but failed to disclose that it was at the same time working to patent aspects of the proposed standard itself.  Win, and the firm has a good shot at substantial royalties for patent infringement.  Lose, and many of the firm's patents could all go for naught.

Analysis: Rambus has long been a firm whose fate was tied to litigation.  And, finally, this Tuesday one of the big cases begins.  At issue is the question of whether Rambus acted legally when it involved itself in the JEDEC standard-setting process without disclosing that the firm was at the same time attempting to patent elements of the standard.  Its opponents deem that an illegal sucker-punch, and take solace in the fact that the Federal Trade Commission agrees in large part.  Rambus responds with a medley of explanations, including the argument that disclosure was not required by law and several arguments along the lines of "everybody knew anyway" and "even if they knew, they would have done the same thing."

The case is particularly interesting because it is a consolidated case involving several potential patent infringers at once, and because it is in front of a jury, where nuanced legal explanations simply might not sell.  Moreover, the case plays out in California, overseen by a judge who has to date been remarkably favorable toward Rambus on either issues.

The litigation is obviously high stakes for Rambus.  After all, if Rambus manages a win, the firm would have a good shot at soon after driving Nanya, Samsung, and others into royalty-paying licenses.  Lose, however, and those license payments will not be forthcoming, and indeed Rambus will at best have to commit itself to years of appeals before seeing any real cash from the relevant patents.

The case starts on Tuesday, and will likely take three to four weeks until the jury comes back with a verdict.