Memory Malaise: Rambus Lawsuits Could Raise RAM Prices

Your next PC or memory upgrade could cost more if Rambus wins pending court cases against memory makers.

Best known for designing high-speed RDRAM, Rambus also holds patents crucial to popular SDRAM and DDR SDRAM (an RDRAM competitor). The company wants royalties from all SDRAM and DDR makers. Some of them have agreed to pay, but others have refused, asserting that Rambus's allegedly deceptive practices should invalidate the patents.

As a result, Rambus is engaged in lawsuits in several countries, including the United States, with Infineon Technologies, Hyundai Electronics, and Micron Technologies. The first trial (Rambus versus Infineon) was due to begin in Virginia in March.

If the memory makers lose these cases and must pay royalties, they "will pass the price increase along to consumers if they can," according to Sherry Garber, vice president of the memory research firm Semico.

Rambus disputes this scenario. "We don't anticipate that consumers will be affected by this," says Avo Kanadjian, vice president of Rambus worldwide marketing. In the volatile memory market, he notes, the small additional cost of royalty fees will matter little; supply and demand determine prices.

Bad Conduct?

Rambus's patent claims are very strong, according to independent patent expert Rich Belgard. In his opinion, the company's only potential weakness in court relates to its conduct as a member of the standards organization JEDEC.

Opponents argue that Rambus failed to disclose its pending patent ownership during JEDEC meetings establishing the SDRAM industry guidelines. Rambus officials argue the company left JEDEC before acquiring the patents and therefore did nothing wrong.

The litigants whose position on that issue prevails in court may win the overall case, Belgard believes. "The JEDEC [issue] could render the patents unenforceable," he says.

If Rambus wins, its revenues could skyrocket, since SDRAM makes up the bulk of a RAM market with total revenues of $29 billion in 2000.