Rambus shows why loose use of terminology in the NPE/troll debate is so dishonest 18 Jun 13
Yesterday Rambus announced that it had reached an agreement with STMicroelectronics that brings an end to long-standing patent litigation between the two. This dates back to 2010 when the semiconductor company was among those targeted by Rambus in an assertion campaign relating to the so-called Barth patents. In July 2012 the ITC ruled that neither STMicro nor LSI had infringed the patents; this followed a ruling by the USPTO earlier in the year that several of them were, in fact, invalid. Given all that, it’s no surprise that there was no mention of any cash being involved in yesterday’s deal – instead, what looks to have been agreed is a face-saving cross-licensing arrangement. This is in marked contrast to the settlement Rambus announced earlier this month with Korea’s SK Hynix which will be worth $240 million to the company over the next five years.
Rambus has had a torrid time over recent years, with its market cap collapsing by 60% in late 2011 following an adverse anti-trust ruling in a case brought against Hynix and Micron; something which precipitated an extended bear run on the stock price. However, over recent months – almost unnoticed – Rambus has been clawing its way back into the game. Since the start of the year, the company’s value has climbed by over 75%.
Rambus is identified by PatentFreedom, the oft-quoted source of statistics related to NPEs, as the owner of one of the largest NPE portfolios. As we all know, the terms NPE and troll are often used in an interchangeable manner by those who seek to rein in the activities of entities that litigate patents on which they do not practise. However, Rambus is one of those companies that demonstrates how dangerous – and deceptive (though, of course, convenient) – such loose use of terminology is. The company actually spends tens of millions of dollars on R&D and is also closely involved in rolling out products, while its licensed patents are incorporated into millions of devices sold by dozens of licensees each year. It is, in fact, the very model of a research-based company operating in an advanced 21st century economy. I really struggle to see what is wrong with any of that; or with the fact that, at times, it needs to aggressively protect what is its life blood – either directly or through deals agreed with third parties. Perhaps opponents of NPEs, such as the Executive Office of the President, could tell us what Rambus is doing wrong.
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