Mobile phones infringe Rambus patents, CEO says

Rambus Inc. owns the patents on memory interfaces used in most mobile phones on the market, and most of those phones violate the company's patents, according to Chief Executive Officer Harold Hughes.

"We have technology that we invented literally 10 to 15 years ago, that is going into just about every mobile phone, so that will be an opportunity for us to find patent licenses," Hughes said in a wide-ranging interview Tuesday. Many people thought that Rambus would not survive patent infringement lawsuits it is involved in "and to a certain extent our technology was then incorporated wantonly," Hughes said.

Rambus aims to get companies to license its technology, and that could include both chip makers and mobile phone manufacturers, Hughes said.

Rambus of Los Altos, California, is a technology licensing company specializing in high-speed I/O interfaces including memory interfaces. The company is involved in patent infringement suits with key semiconductor makers like Micron Technologies Inc., Hynix Semiconductor Corp. and Samsung Electronics Co. Ltd. Last year it settled a case with Infineon Technologies AG with Infineon agreeing to pay Rambus as much as US$150 million in licensing fees.

The litigation process is long and expensive, with the company spending about $8 million to $9 million a quarter on the litigation, but the stake is huge, Hughes said. The DRAM (dynamic RAM) market is a $30 billion industry, and at 3 percent per year in royalties, the company could very quickly be at revenue of $1 billion a year, he said.

Rambus is in negotiations with some 20 other companies that have allegedly infringed its patents, in a bid to make them licensees. "Many of these are wonderful companies that we would like to have engineering relationships with," Hughes said. "I think it would be only as a last resort that we dealt with litigation."

The company is meanwhile planning to expand its own technology portfolio outside of its current focus on high-speed I/O interfaces.

"Transistor budgets are exploding when you get to 65 and 45 nanometers, and the number of transistors is massive," Hughes said. "Every chip is going to have significant blocks of technology, so the interconnects between those blocks would be an interesting place for us to look at."

Rambus is planning to acquire technology companies over the next two years rather than do in-house development. "One of our anxieties is de-focusing the relatively small number of engineers we have," Hughes said. "Within our own core development, I am reluctant to fund projects that are way afield of where we are."

As for licensing, Rambus' first large deal in the U.S. was with Intel Corp., but its five-year agreement ends in September. Rambus is confident that Intel will sign a new patent licensing agreement, according to Hughes.

It is also likely that Intel will get a better deal than competitor Advanced Micro Devices Inc. (AMD) of Sunnyvale, California, which signed a $75 million five-year patent licensing agreement with Rambus in January. Rambus would endeavor to make the terms of the deal with Intel comparable with the agreement with AMD, but it is unlikely that will happen as the volumes Intel offers are far higher than what AMD can offer, and Intel is a tough negotiator, Hughes said.

Intel's deal with Rambus is a "capture license," giving Intel complete coverage for Rambus' patents, Hughes said. At the end of the agreement, Intel will still be licensed for the patents that existed during the agreement. In contrast, the license with AMD is not a capture license. "The day after the contract [with AMD] expires, they will not be licensed for the patents that they were licensed for," Hughes said.

Rambus does not intend to sign other capture licenses going further, Hughes said.