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Rambus Redux: The FTC Tries One Last Time (and so do I)
Authored by: Andy Updegrove on Thursday, December 18 2008 @ 06:40 AM CST

John,

Thanks for the additional thoughts.  Here are mine in return:

1.  Your references to “the” trial and its results are references to a 2001 EDVA trial that was reversed by the CAFC in 2002.  

 >>Yes, but it would take thousands of words to note my differences with the CAFC opinion, it's narrow claim construction, and so on, although the amicus brief that I filed in support of the en banc review that was not granted describe some of them.

2.  That 2001 trial, among other things, included a refusal to give a Kingsdown instruction – an instruction that (a) recognized settled law that it is legal to amend patent applications to cover competing products, and (b) that the EDVA trial judge said, if given to the jury, would have resulted in a verdict for Rambus.

 >>It's been too long since I read the record for me to recall that, but I'd certainly take your word for it.

3.  “The” trial to which you refer also included assertions that Rambus stole from JEDEC (essentially turning reality on its head). 

>>Yes, but of course many other allegations as well - this is only one, and hardly necessary to allow the jury to reach the conclusion that it did, or for the unanimous Commissioners of the FTC to reach a similar conclusion.

That trial was also predicated on very broad assertions about the broad scope and binding effect of JEDEC “IPR” (intellectual property rights) disclosure rules.  On appeal, those JEDEC disclosure rules were severely criticized by the CAFC.  The CAFC concluded that they suffered from a “staggering lack of defining details,” failing to specify, for example, what or when to disclose.  The CAFC further cautioned that “when direct competitors participate in an open standards committee, their work necessitates a written patent policy with clear guidance on the committee’s intellectual property position.”

It was years ago, and I may be wrong, but I seem to recall that you essentially agreed with the CAFC’s conclusions.  I have in mind a 2002 blog posting of yours (or perhaps it was a client newsletter, I forget which).   I think I recall your urging SSOs (commendably, I think) to review and revise their IPR rules to avoid similar problems.

 >>Yes, but again, this only part of the story.  The JEDEC policy was almost identical to those of hundreds of other "ISO family" accredited SSOs, and people know what the intention of the policy was.  Munger Tolles did a good job of creating a record that seemed to indicate that the policy was not universally understood - but as I recall, evidence was also produced that Rambus itself understood the intention, and the obligations, of the policy the way they were intended.  As I've always pointed out, my concern is with Rambus's intent - and not whether it could later come up with a legal argument that could get it off the hook. 

4.  Subsequent to “the” trial on which you still hope to rely, there has been considerable additional discovery and two other much longer, much more detailed trials about Rambus’ conduct at JEDEC.  One was four month trial in 2003 in the FTC conducted by its Chief ALJ.  A second was a lengthy jury trial this year in the Northern District of California. 

 >>Yes, and we know that the unanimous commissioners threw out the ALJ opinion. John, you can't point to the CAFC decision throwing out the trial court as indicating Rambus's innocence, and then point to the ALJ opinion, which was rejected on appeal by the FTC to indicate again that Rambus was innocent.  All we really know is that the same facts have been munged over many times, and that different triers of fact and law continue to come out different ways.  Both of us can assemble a litany of points of decisions to support our position, and I don't think that either of us really gains a lot by doing so. 

5.  Both of these subsequent trials soundly rejected all of the JEDEC-related claims you continue to endorse.  The DC Circuit and the DC Circuit En Banc have now agreed, also rejecting these JEDEC-related claims (with the DC Circuit saying that they rely on an “aggressive use of weak evidence”).

>>See prior point on other "sound rejections" that went in the opposit direction.

5.  Subsequent to 2001 there has been very substantial additional discovery – much of which was reflected in these 2003 and 2008 trials.  It includes substantial evidence that JEDEC and its members knew they were “taking” the work of Rambus and issuing that work as their own standards.  It also shows that JEDEC discussed (and researched)  the IP risks they were taking (including by undertaking substantial prior art research to block the Rambus patents they feared were coming). 

>>I have always noted that Infineon, Micron et al. were bad actors.  But that doesn't excuse Rambus for being a bad actor, too.  Those companies have all settled, and paid big fines, to the FTC.  Rambus in contrast continues to try to point to other bad actors as a reason why its own conduct should be excused.  I have frequently analogized this to two sets of bank robbers robbing the same bank, and one set saying that it should be innocent of intent to rob, because the other robbers got their first.

There is more in the record to which I hope you would stipulate, but I want to turn as well to the Senate Judiciary Committee members whom you characterize as “courted by lobbyists, who doubtless know little or nothing about standards development.” 

Please read (or re-read) the Senate letter to which I provided a link.  It purports to say nothing about standards development.  It speaks volumes, however, about growing concerns about the FTC.  That letter adopts a harsh tone.  Between the lines (and not so subtly) it reflects troubling facts that the FTC (1) acts as prosecutor, judge, jury and appellate court in its antitrust enforcement cases, and (2) has institutional conflicts of interest (doctrinally, and in terms of the scope of its mission and budget and expenditures) in those cases.  Add to this the fact that the FTC, at the commission level, appears to have managed things so that (in 25 years) it never loses and I think you should agree that this is not a system of adjudication that ought to continue in this way.  Rambus is just one example of how it has failed us. The Senate letter I urge you to read seems to suggest that many now recognize this. 

>>I recognize that these senators have an opinion on the subject, but I don't see that it indicates any more than that.  There are, and have been, senators that have wanted to do away with many agencies, or cripple them.  Under the Reagan and Bush administrations, they have often been successful.  Reagan tried to emasculate both regulatory agencies.  Bush has dramatically restricted the Department of the Interior, the scientific independence of NASA, and much more.  All this indicates is the continuing war between those of different political stripes and opinions.  I've met personally with the FTC several times over the past several years as part of a process of give and take between the regulators and lawyers representing the standards community, and I have personally been quite impressed with the balanced views that they have brought to the table, and their honest interest in helping, rather than hindering, the standards development process.

Where I'd like to end on this is where I began - either of us could ask the other to stipulate to a set of facts that would support their position.  I won't bother to do the same, because I don't think that it advances the cause any more than this did. 

What we really need is closure - and that's where the Supreme Court can come in.  They or may not reach the "right" answer in either of our opinions, but they may supply a final answer that would make both of our personal views moot, but that everyone will have to live by. 

And that would be useful.

Best,

Andy

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