Standards Setting Organizations

1. Standards Setting Organizations • Groups of industry professionals • Represented by • Corporations • Experts in the field • “The public” • Other interested parties

2. Standards Setting Organizations • Help ensure interoperability • Avoids standards battle • VHS/BETAMAX • HD-DVD/Blu-Ray • Creates common standards • 120V / 60Hz outlet • NTSC

3. JEDEC • A part of the Electronic Industries Alliance • Created in 1960 • Oversees • Semiconductor Devices • Integrated Circuits

4. JEDEC Members • 2400 participants • 270 companies • Intel • Apple • Texas Instruments • Cisco • IBM

5. Membership Dues • $4000.00, one committee • $6000.00, two committees • $8000.00, three committees • $10,000.00, four or more committees

6. Why Join? • Seat at the table • Can create value for company’s IP • Prevents others from monopolizing the field

7. Rambus SDRAM and RDRAM are essentially the same. The only difference is the manufacturer. SDRAM RDRAM

8. Rambus Majority • Reasonable expectation • That a license is needed to implement the standard • NOT • Individual limitations • As long as • Claim also includes limitations not needed to practice the standard.

9. Rambus Dissent • Court engaged in inappropriate de novo review • Substantial evidence supported jury’s finding • Majority rule is “impossibly complex”

10. Desmarais’ Answers • Heller • Q: 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

11. Desmarais’ Answers • Olin • Q: What other claims did you make against Rambus? • A: • Fraud • Rico • Antitrust • State law breach of contract

12. 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.

13. 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

14. Desmarais’ Answers • Cohen • Q: Did majority fairly characterize the “related to” standard? If not, what is the fair limit of disclosure duty? • A: No. Two prongs • Related to: Broad disclosure so that there could be discussions about what standard to adopt • Required licensing: Only when a patent was necessary to practice the standard

15. Desmarais’ Answers • Yates • Q: 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”

16. 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

17. Desmarais’ Answers • Hawkins • Q: 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.

18. Desmarais’ Answers • Edsenga • Q: 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.

19. On Remand • Dist. Ct. found for Infineon on discovery issue (ruled from the bench) • This effectively destroyed a large portion of Rambus’ case • Settlement 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

20. Licensing Issues • Contractual License • Remedy is expectation damages • AI is not allowed to practice the standard • Unlikely to prevent monopolization • Implied License • Remedy is a reasonable royalty • AI can continue to practice the standard

21. Antitrust • Attempted Monopolization • Intent to monopolize • Anticompetitive conduct in furtherance of the intent • Probability of successful monopolization

22. Equitable Estoppel • 3 Prongs • Misleading conduct • that leads the AI to • Reasonably infer • the PO does • Not intend to enforce • the patent against the AI

23. Class Comments • Antitrust • The two intent prongs (monopolize and conceal) are usually difficult to prove. Heller, Olin: What facts show intent as opposed to mistake or other excuse?

24. Class Comments • Equitable Estoppel • Equitable 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?

25. 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

26. Class comments • Amend JEDEC’s patent policy • Pearson: • 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

27. QUESTIONS?