Thursday, January 19, 2006

PEERING INTO THE MIND OF RAMBUS: Rambus announced today that earnings were up at the company, as a result of debt reduction and the rise in royalty payments on its patents. Revenue from patent royalties rose 6.5 percent to $34.7 million while revenue from new contracts rose 14.3 percent to $6.9.

Rambus recently recovered from an earlier lawsuit against Infineon, where the court dismissed Rambus's patent claims in a bench statement that concluded that Rambus engaged in spoilation of documents to such an extent that dismissal of the case was warranted. What turned out to be a rather shrewd move, Infineon and Rambus settled the case before the judge issued a written opinion. Since the case was settled under these circumstances, Infineon received a favorable settlement, and Rambus was allowed to continue litigating on the patents (against Infineon's competitors), since a "final judgment" was never issued in the case. This move was ultimately validated by the court in the N.D. California, where it was held that Rambus, who continues to litigate against chip-maker Hynix, was not collaterally estopped from the earlier spoilage issue. In the meantime, Rambus renewed a long-running lawsuit against Micron.

The Hynix court ended up re-hearing the spoilage issue in its entirety, and this time concluded that, while certain relevant documents were destroyed, dismissal was not warranted:

Here, the court does not find dismissal to be an appropriate sanction because it does not find the application of the unclean hands doctrine to be warranted. Further, the evidence presented does not bear out Hynix's allegations that Rambus adopted its Document Retention Policy in bad faith. The evidence also does not demonstrate that Rambus targeted any specific document or category of relevant documents
with the intent to prevent production in a lawsuit such as the one initiated by Hynix. The evidence here does not show that Rambus destroyed specific, material documents prejudicial to Hynix's ability to defend against Rambus's patent claims. Therefore, Hynix's unclean hands defense fails.

This particular ruling is interesting because the court essentially reviewed much of correspondence among Rambus personnel and attorneys that were involved in their enforcement strategies. In fact, the court provides a chronological run-down of Rambus' technology and licensing strategies from 1990-2005. For anyone that wants to take a peek behind the curtain of a holding company's mindset during an enforcement push, this case provides some valuable insight.

See ruling here.

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