Analysts: Rambus case to alter standards-setting rules

Now that a fraud verdict against memory chip designer Rambus has been lifted by a federal court of appeals, the company is poised to once again defend its intellectual property in courts around the world. The fallout from the decision is likely to change the way standards-setting organizations operate and could affect several other memory vendors, analysts said Thursday.

The U.S. Court of Appeals for the Federal Circuit, in Washington, D.C. , in a decision released Wednesday, found that a lower court improperly allowed a jury verdict of fraud to stand against Rambus.

When Rambus sued Infineon Technologies in 2000, alleging Infineon violated Rambus patents with its products, Infineon turned around and accused Rambus of fraud for participating in Joint Electron Device Engineering Council (JEDEC) meetings without disclosing that it either had obtained or was seeking patents on several key technologies included in the SDRAM (synchronous dynamic RAM) standard.

A jury found Rambus guilty of fraud on two separate charges of interfering with the SDRAM standard and the DDR (double date rate) SDRAM standard, but the judge in that case overturned the DDR SDRAM verdict, citing the fact that Rambus had withdrawn from JEDEC before the DDR SDRAM standard was completed.

A three-member panel of appeals court judges overturned that verdict in a split decision Wednesday, saying that JEDEC's disclosure policy was not clear enough to charge Rambus with fraud.

The case delves into the sometimes murky world of U.S. patent law, which has become a controversial topic among technology companies. Amazon.com was granted a patent in 1999 for a one-click Web purchasing system and later sought an injunction against a similar system from Barnesandnoble.com, and British Telecommunications went even further in claiming to have invented and patented the hyperlink.

Under U.S patent laws, a patent application must describe a specific invention in terms of exactly how the technology works and what it can be used for, said Randy Gard, a partner in law firm Carl & Ferrell in Palo Alto, California . The specific applications of the invention are known as claims and are crucial to determining patent infringement.

"The first time you write that patent, you have dueling requirements. There's a requirement to be fairly specific as to how the invention works, but at the same time, you have to describe all of the variations and exclusions you can think of," he said.