Wednesday, April 28, 2004

Rambus Patents - The $3 Billion Dollar Question

(From Wired News)

Computer chip designer Rambus could pocket up to $3 billion in royalties and raise prices for consumers of all manner of computing devices if an administrative law judge's ruling in its favor is allowed to stand, the Federal Trade Commission argued in an appeal.

In the filing, the FTC legal staff said the judge's ruling was "fatally flawed" as well as based on factual and legal errors. In February, McGuire, who is the agency's chief administrative law judge, dismissed charges that Rambus (RMBS) had lulled chip makers into including its patented technology in their standards.

The filing warns that any Rambus royalties collected by chip makers would ultimately be paid by consumers who buy personal computers, gadgets and a variety of other devices that rely on silicon-based memory.

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It's going to be interesting to see how the FTC proceeding plays out. Rambus seems to have acquired a license to print money from their patent portfolio. But sometimes, if you live by the sword, you die by the sword.

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