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A split decision by a panel of U.S. appellate court judges has thrown out a fraud judgment against memory chip designer Rambus, saying there is not enough evidence to convict the company of fraudulently seeking to influence a standards body into adopting its patented memory technologies as industry standards.

The U.S. Court of Appeals for the Federal Circuit found last week that a lower court correctly overturned one jury verdict that had found Rambus guilty of fraud for trying to get patents on DDR SDRAM while it was participating on a standards committee for that technology.

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The appeals court also said that the U.S. District Court for the Eastern District of Virginia improperly allowed a separate verdict that Rambus fraudulently sought patents on SDRAM technology when there was insufficient evidence to support that claim.

"This endorses a broad reading of Rambus's inventions, and does that by construing our patent claim in the manner we thought it should be construed," said John Danforth, general counsel for Rambus.

"This clears up an issue hanging over our heads for quite some time related to the JEDEC (Joint Electron Device Engineering Council) standards-setting body, and outlines the definition of a policy for standards-setting organizations that should be required reading for those organizations," Danforth said.

Litigation between Rambus and the Federal Trade Commission is still pending, however, with a trial scheduled for April, Danforth said.

Rambus makes a type of memory known as RDRAM. It's not interoperable with DDR SDRAM, but both technologies transfer data at a rate of more than 1 bit per clock cycle, said Dean McCarron, principal analyst at Mercury Research.

Vendor Spats

Rambus originally filed suit against rival memory vendor Infineon Technologies, alleging that Infineon had infringed on several of Rambus's patents for DDR SDRAM and SDRAM technologies. Judge Robert E. Payne threw out Rambus's claims of patent infringement last year, and a jury found the company liable for fraud.

Rambus is also involved in ongoing litigation with two other DRAM vendors, Hynix Semiconductor and Micron Technology.

Rambus filed for patents on DRAM technology in the early 1990s and later participated in standards-setting discussions with JEDEC regarding new types of memory technology. The dispute centers on how technologies for which Rambus claims patents wound up in the JEDEC standards for SDRAM.

Because the disclosure policies of the JEDEC were ill-defined, Rambus can't be found guilty of fraud for having failed to disclose any current or pending patents, the court said.

"When direct competitors participate in an open standards committee, their work necessitates a written patent policy with clear guidance on the committee's intellectual property position. A policy that does not define clearly what, when, how, and to whom the members must disclose does not provide a firm basis for the disclosure duty necessary for a fraud verdict," the court wrote in its opinion. Circuit Judges William Bryson and Randall Rader joined the majority opinion.

Appeal Considered

One judge on the three-judge panel dissented from the fraud ruling. Circuit Judge Sharon Prost wrote that "JEDEC's disclosure policy required its members to disclose patents and pending applications that 'might be involved in the work they are undertaking.' While the majority rejected this standard as unbounded, nothing required JEDEC to formulate its policy with precision and clarity."

The decision likely means that Rambus will again pursue legal claims against competitors, claiming that they are violating intellectual property protected by Rambus's patents, said Kevin Krewell, senior editor of the Microprocessor Report.

"Rambus will still probably try to enforce what they feel are patents on DRAM technology," he said.

Rambus attorney Danforth seemed to suggest that Rambus would do just that. "We believe that when we've made a contribution this significant to the industry, we should be compensated for that," Danforth said.

Infineon said Wednesday that it will seek a rehearing in the case. "We are disappointed by the court's decision. We are studying the ruling and expect to request a rehearing by the court," said an Infineon spokesperson.

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