Jack Robertson EBN (02/03/2003 11:45 AM EST)

After two and a half years of bitter litigation and millions of dollars spent on legal costs on both sides, the issue of alleged Infineon violation of Rambus patents still remains to be decided.

The Federal Circuit of the U.S. Court of Appeals last week handed Rambus a major victory by throwing out adverse judgments against the firm in the 2001 trial in federal district court in Richmond, Va. Infineon vows to appeal and the final resolution must wait until this process runs its course.

The crux of the case -- Rambus' charges that Infineon violated its SDRAM patents -- also remains unsettled.

After a continued lengthy appeals process, the case could possibly end up back to the federal district court in Richmond, Va. where the original suit was filed in August, 2000.

The higher court sent the case back to the Richmond court to once again adjudicate whether the German chipmaker had violated Rambus' intellectual property on SDRAMs. The appellate tribunal did impose its broader interpretation of coverage of Rambus' SDRAM patents -- ruling they were not restricted just to SDRAM multiplexed bus lines, as the lower court jurist contended. Other legal issues, which didn't garner major attention in the Richmond trial after the judge's early ruling in favor of Infineon, remain to be adjudicated.

The appeals court also in a split 2-to-1 decision tossed out a jury verdict in the Richmond trial that Rambus had committed fraud by failing to disclose its pending SDRAM patents while participating in the industry JEDEC standards body which was drafting an open specification on the same technology.

Absolving Rambus of fraud not only clears the design firm's reputation but removes a possible enforcement threat to its SDRAM patents which could be imperiled by the fraud verdict.

Jettisoning the fraud decision has a potential far-reaching impact well beyond the Rambus-Infineon litigation. All voluntary standards bodies and a separate Federal Trade Commission antitrust case against Rambus could be affected by the restrictions the appellate court seemed to apply on patent disclosure at the time open industry standards are being drafted.

The appeals court majority asserted that JEDEC rules on its patent disclosure policy were vague and ambiguous. The two-judge majority then said the JEDEC policy should have required a patent disclosure only at the time of balloting on the technology standard under consideration.

"To hold otherwise would render the JEDEC disclosure duty unbounded under such an amorphous duty that any potential patent or application having a vague relationship to standards would have to be disclosed," the majority opinion said.

While absolving Rambus of fraud, the majority didn't let the company off the hook completely. "Some of the evidence does not put Rambus in the best light. Rambus thought it could cover the SDRAM standard and tried to do so while a member of an open standards-setting committee. While such actions impeach Rambus's business ethics, the record does not contain substantial evidence that Rambus breached its duty under the JEDEC policy," the majority said.

Dissenting Judge Sharon Prost argued that all JEDEC policy manuals and documents "required members to disclose patents and pending applications that might be involved in the work they are undertaking" -- not just at various balloting on a standard.

"JEDEC was free to formulate whatever duty it desired and it is not this court's job to rewrite or reinterpret the duty," Judge Prost concluded in her dissenting opinion.

The question of timing for disclosing a patent to a standards body is paramount. The appellate court majority's ruling that patents only need to be disclosed at the time of a ballot could have earth-shaking consequences in all standards groups. Although the ruling applied only to JEDEC, the legal appeals court precedent might impact other similar patent disclosure cases in the future.

JEDEC is concerned that by the time deliberations have reached the ballot stage, any patent disclosure may be too late to allow any design changes or work-arounds in the industry standard. That could very well be the concern of many other standards bodies as well.

The appellate court dictated timing for patent disclosure also overshadows the FTC antitrust case against Rambus, predicated on the same alleged hiding of its pending SDRAM patents from JEDEC. If the same court-set threshold -- disclosure only at time of ballots on a standard -- applies, this raises many questions, since Rambus had left JEDEC by the time many SDRAM standard ballots were taken.

---------------------------------------------------

Note: The Closer Look column is now a monthly feature. It will appear the first of each month.