When old engineers (and old lawyers) sit around decades from now reminiscing about patent and antitrust law in the late 1990s and early 2000s, the name of Rambus is sure to come up. The topic will not be the Rambus DRAM (or RDRAM) chip technologies, but rather the massive volume of litigation that Rambus set off as result of its alleged “patent hold-up” actions and its patent enforcement efforts.
Rambus, the lawyers on either side of its many cases, the courts, antitrust experts and economists, and of course investors in Rambus’ stock (a particularly loyal and attentive group), have debated the pros and cons and nuances of these lawsuits for years, and during this season (late 2008) an important and timely Rambus case is taking a run at the Supreme Court.
The FTC adminstrative action against Rambus, which bothAndy Updegrove and Ihave written about at length in the past, involves somewhat arcane issues of single-firm conduct under Section 2 of the Sherman Act. However, the case also exists at a level that doesn’t require a degree in law and economics to understand – Rambus is accused of of withholding from an important standards-setting organization (SSO) the fact that it had pending patent applications, resulting in adoption of the Rambus technology as a standard, following which Rambus used it patents to “hold up” the industry for unreasonable royalties.
What a wonderful blend of issues for lawyers and economists to dive into: patent law, antitrust law, conspiracies to deceive, very large sums of money (in the form of royalties potentially owed to Rambus by industry players), and all of this during the technology and stock market vortex of the 1990s and 2000s. Is it any wonder that Rambus’ litigation has attracted so much attention?
In context, the Federal Trade Commission case has been just one of many fronts on which Rambus has been forced to battle. As discussed here, the Federal Trade Commission found that Rambus’ actions toward the SSO was deceptive and violated the antitrust laws by enabling Rambus to gain monopoly power. The Court of Appeals for the D.C. Circuit reversed the FTC early this year on highly technical legal grounds that involved what some observers thought was a misapplication of the antitrust laws. However, no matter which side you’re on, it’s difficult to deny that the case raises legal issues that could benefit from clarification by the Supreme Court. Now, the FTC has asked the Supreme Court to review the case.
Persuading the Supreme Court to review a case is harder than getting into Harvard. In its most recent term the Court decided about 70 cases, out of over 7,000 appealed. However, like admissions at Harvard, the odds aren’t quite so bad once you eliminate the cases that had no chance of review and shouldn’t have been appealed in the first place – in effect “Hail Mary” appeals.
Many people are hopeful that the FTC/Rambus case will be accepted by the Court. The FTC/Rambus case certainly falls within the “first in class, perfect SAT scores” category, to stretch the analogy. This is a rare opportunity, these advocates believe, for the Court to clarify the law of “single firm” monopoly conduct. And, the standards setting industry believes that the case presents critical issues necessary to the health of standards setting, an area of domestic and international cooperation whose importance is hard to overstate. On the opposite side of the case, Rambus advocates argue that Rambus is the victim of a government witch hunt that lacks any merit, and conclude that the D.C. Circuit was correct to reverse the FTC and set matters straight.
I’ve set up an FTC v. Rambus certiorari petition group page on scribed.com to collect filings on this appeal. The first step for the FTC, of course, is to persuade the USSC to take the case. At present, the Rambus group pageholds the D.C. Circuit decision, the FTC’s cert petition, and the amici briefs that have been filed to date.
In addition to the petition of various companies urging the Court to take the case (Hewlett Packard, Cisco, Sun and Oracle), the Rambus group page holds the petition filed by our firm last week, which was written by Andy Updegrove. The SSO petition was written on behalf of 19 standards setting organizations representing over 13,000 members, and it emphasizes the practical importance of this appeal – its importance to the “law of SSOs”, for lack of a better term.
A pdf copy of the SSO petition is here, and a copy on scribed.com is embedded below.
Will the Court take this case? We should know soon. I’ll continue to add amici petitions and, of course, Rambus’s opposition to the request for Supreme Court review, which will be forthcoming soon, to the Rambus group page, as they appear.