Standards Setting Organizations

Groups of industry professionalsRepresented by

CorporationsExperts in the field “The public” Other interested parties

Standards Setting Organizations

Help ensure interoperabilityAvoids standards battle

VHS/BETAMAXHD-DVD/Blu-Ray

Creates common standards120V / 60Hz outletNTSC

JEDEC

A part of the Electronic Industries Alliance

Created in 1960

OverseesSemiconductor Devices Integrated Circuits

JEDEC Members

2400 participants

270 companies IntelAppleTexas InstrumentsCisco IBM

Membership Dues

$4000.00, one committee

$6000.00, two committees

$8000.00, three committees

$10,000.00, four or more committees

Why Join?

Seat at the table

Can create value for company’s IP

Prevents others from monopolizing the field

Rambus

SDRAM RDRAM

SDRAM and RDRAM are essentially the same. Theonly difference is the manufacturer.

Rambus Majority

Reasonable expectationThat a license is needed to implement the

standard

NOT Individual limitations

As long asClaim also includes limitations not needed

to practice the standard.

Rambus Dissent

Court engaged in inappropriate de novo review

Substantial evidence supported jury’s finding

Majority rule is “impossibly complex”

Desmarais’ Answers

HellerQ: What would you have done differently?A: Spend more effort on an element in the

attempted monopolization claim. But in retrospect the Fed. Cir. would reverse for

the same reasons it reversed the fraud. It appeared that the Fed. Cir. reweighed the

facts and came to a different conclusion See Prost’s dissent

Desmarais’ Answers

OlinQ: What other claims did you make against

Rambus?A:

FraudRicoAntitrustState law breach of contract

Desmarais’ Answers

Pearson:Q: Under Vornado, would you have artfully

pleaded to avoid patent issues?A: “No, our fraud claim was a common law

Virginia action that happened to be in Federal Court because of the patent complaint.”

I’m not sure this answered the Q.

Desmarais’ Answers

Frostick Q: How far into the trial did the JMOLs happen? A: JMOL occurred at several points.

Infringement claims dismissed pre-trial and at the end of Rambus’ presentation

Rambus won on contract and attempted monopolization at the end of Infineon’s presentation, but before jury verdict.

Jury found for Infineon on fraud (SDRAM, DDR-SDRAM) Jury found for Rambus on RICO Rambus lost JMOL on SDRAM fraud, won on DDR-

SDRAM

Desmarais’ Answers

CohenQ: Did majority fairly characterize the

“related to” standard? If not, what is the fair limit of disclosure duty?

A: No. Two prongsRelated to: Broad disclosure so that there could

be discussions about what standard to adoptRequired licensing: Only when a patent was

necessary to practice the standard

Desmarais’ Answers

YatesQ: How does the disclosure duty affect the

decision making process?A: Depends on the SSO and the

expectation of its members. JEDEC believes that “early disclosure was necessary to the process to encourage adoption of the standard with full knowledge of the consequences”

Desmarais’ Answers

Cleary Q: How often were settlement negotiations held?

What were proposed terms? A: Rambus demanded a 3.5% royalty (approx.

$1B) Infineon refused. Sued 7 days later

Court ordered settlement talks With trial judge Retired judge Rambus refused to budge and upset both judges Claimed to want to make example of Infineon

Desmarais’ Answers

HawkinsQ: What do you think are the real world

implications of the Fed. Cir.’s disclosure standard?

A: Unworkable. People on standard’s committees are not lawyers. Leads to far fewer disclosures and the kind of activity that JEDEC’s policy sought to discourage.

Desmarais’ Answers

EdsengaQ: Was Rambus worried about industry

backlash from the litigation?A: Rambus is a patent holding company.

Their business model is based on having blocking patents that the industry needed. Pleasing the industry was not their concern.

On Remand

Dist. Ct. found for Infineon on discovery issue (ruled from the bench)This effectively destroyed a large portion of

Rambus’ caseSettlement reached 1 month later

Infineon agrees to pay 5.85M per quarter for 2 years

Infineon gets early access to new Rambus patents and technologies

Licensing Issues

Contractual LicenseRemedy is expectation damages

AI is not allowed to practice the standardUnlikely to prevent monopolization

Implied LicenseRemedy is a reasonable royalty

AI can continue to practice the standard

Antitrust

Attempted Monopolization Intent to monopolizeAnticompetitive conduct in furtherance of

the intentProbability of successful monopolization

Equitable Estoppel

3 ProngsMisleading conduct

that leads the AI toReasonably infer

the PO doesNot intend to enforce

the patent against the AI

Class Comments

AntitrustThe two intent prongs (monopolize and

conceal) are usually difficult to prove.

Heller, Olin: What facts show intent as opposed to mistake or other excuse?

Class Comments

Equitable EstoppelEquitable doctrines are notoriously hard to

win. How would you argue this?

Cohen, Hawkins: Equity claims are (as Hawkins noted) considered weaker. Why did you choose this over antitrust?

Optimal SSO Policies

What are the IP rights the SSO wants to address?

Get consent of members in writing

Require licensing

Require members to comply with policy

Class comments

Amend JEDEC’s patent policyPearson:

Change language to make it unequivocal that members must disclose IP and grant licenses

Cleary: Include language about creating a presumption

of fraud for failure to disclose

QUESTIONS?