The story about Rambus becomes very clear from Mr. Monahan's opening statement to the Virginia Court - here's the official transcript:
MR. MONAHAN: May it please the Court,
16 counsel, ladies and gentlemen of the jury. I’m David
17 Monahan. It’s my privilege to represent the plaintiff
18 in this case, Rambus.
19 This is a case about inventions. It’s also
20 a case about two brilliant inventors who have
21 revolutionized an industry, an industry driven by
23 It is also a case about infringement. That
24 is, using some of those inventions’ end product,
25 memory chips, while willfully refusing to pay for that
1 use. The inventors are the founders of Rambus, the
2 plaintiff in this case. The infringer is Infineon,
3 the defendant in this case, until quite recently part
4 of a company, a large multi-national conglomerate
5 called Siemens.
6 Let me tell you how these two inventions
7 came about. Two teachers meet for dinner. Back in
8 October 1988, Palo Alto, California, near Stanford,
9 the heart of Silicon Valley, two teachers met for
10 dinner at a restaurant called St. Michaels.
11 One of them, the one who called the meeting,
12 had grown up on a farm in Indiana. He had gone to
13 Purdue, graduated early from high school, went on to
14 Purdue, an engineering university. Brilliant there.
15 Then went on and got his Ph.D. in electrical
16 engineering at Stanford. At this time he was a
17 teacher. He was a professor at the University of
18 Illinois, and he had an idea. He had an idea that he
19 had been thinking about for sometime.
20 He basically had a vision that would
21 revolutionize how computers work. He had a vision
22 that would make them run at speeds that were then
23 unheard of - 500 million cycles per second. That’s at
24 a time when the fastest were running something like
25 20 million cycles per second.
1 He not only had a dream for the technology,
2 he had a dream for bringing this technology to the
3 world through licensing, but he knew he couldn’t do it
4 alone. He needed some help. And that brings us to
5 the second person at that restaurant meeting at St.
6 Michaels nearly 13 years ago.
7 Another brilliant student, another person
8 who graduated from high school early, went on to the
9 Massachusetts Institute of Technology, MIT, electrical
10 engineering, awarded his Ph.D. from Stanford in
11 electrical engineering. Also a teacher. Then, as
12 today, a full-time professor at Stanford. Is name is
13 Mark Horowitz. The first man was Mike Farmwald, the
15 So Mike explained his vision to Mark, and
16 Mark was a little skeptical. He was skeptical not
17 only of the vision for this technology, he was
18 skeptical on the way that Mike was planning to bring
19 it to the world. But as he listened, and as he asked
20 questions, he began to think, Maybe, maybe we can do
22 So starting with that dinner at St. Michaels
23 Restaurant nearly 13 years ago, these two inventors,
24 teachers, came up with these inventions and then
25 taught the world how to use them. These are
1 inventions that have radically changed the way
2 computers work for the last decade and may change it
3 for years to come in the future.
4 To understand what these inventions do - I
5 could use some of this technology right here - we have
6 to understand a little bit about basic components of
7 the computer. We all use them now. We saw your hands
8 go up. There is something called a CPU on every
9 computer. Sometimes that’s called a microprocessor.
10 That’s the brains of the computer that does all these
11 complicated functions.
12 There’s something also called main memory.
13 And main memory in your computer is almost always
14 dynamic random access memory. That’s a mouthful, so
15 I’m going to call it DRAM. That’s what the products
16 are in this lawsuit. That’s different from the
17 long-term memory called the hard drive.
18 This is the main memory where you load
19 things, where you type things in, where you read
20 things out on your output device, it says here.
21 That’s your display or monitor or your input device.
22 That’s your computer keys or your mouse. Isn’t
23 technology great?
24 What is a CPU, again? That’s that little
25 chip. You probably know them as microprocessors.
1 Intel invents them. The next one coming out and we
2 will all get one of these days is called P4 or Pentium
3 4. That’s the brains of the computer. It has to
4 store things on a short-term basis somewhere and
5 that’s where DRAM or main memory comes in.
6 There was a problem that they were trying to
7 solve. And it’s called the performance gap. What
8 that means is that the speed of these CPUs or
9 microprocessors had gone up 200 times in the previous
10 decade. They were getting very fast very quickly.
11 The problem was that the DRAM main memory that had to
12 communicate with these microprocessors or CPUs weren’t
13 getting much faster, certainly not at that rate. In
14 the same decade they had gone up perhaps 20 times.
15 So there was a gap that was growing between
16 the speed at which the CPU could run and the speed at
17 which the main memory could run. And that is where
18 the Rambus inventions were directed.
19 All of the inventions in this suit, and I’m
20 going to give you four names, it’s three patents, are
21 directed at improving the way the CPU communicates
22 with the DRAM main memory. So think of those arrows
23 like a highway. And if there’s congestion on that
24 highway, it can slow the communications down. And
25 that’s what all of these inventions were aimed at.
1 I am going to give you some shorthand names
2 to use for these inventions. First, they work
3 together. The inventions alone are important, but
4 it’s the inventions in combination that give us these
5 radical speeds, this improvement in speeds between the
6 way the CPU and the DRAM memories operated.
7 The first invention I want to talk about is
8 called the delay time invention. The delay time
9 invention is like putting a stoplight on each of these
10 DRAM memory chips. We don’t like stoplights. They
11 make us stop. They slow us down. They aren’t very
12 nice things, but we do know that if they are properly
13 run and properly placed, traffic overall runs better.
14 So they benefit us all. Same way with these
15 inventions. By stopping the flow of data at the right
16 times, it makes everything run faster.
17 The second one of these inventions is called
18 variable, sometimes programmable, block size. That’s
19 block size. That’s the shorthand name. And this is
20 like a metering signal on the expressway. When you
21 have an on ramp and it says stop, and then you go on
22 green. Well, sometimes they say one car go on green.
23 Sometimes they’ll say two cars go on the green.
24 Sometimes they can say three cars go on the green.
25 And that’s exactly what this variable block size does.
1 It says, okay, we’ll give you three bits of
2 information that can go on the green. Same kind of a
3 deal. You don’t like stopping, but this is a way of
4 improving the flow of data.
5 The third is we’ll call dual-edge clocking.
6 Sometimes called double dataing. What that does—I
7 couldn’t think of how to do it with a light, so I’m
8 going to do it with a grandfather clock. Think as
9 you’re sitting there on that expressway, instead of a
10 light, there’s a giant grandfather clock. It’s
11 ticking back and forth. And you can go—every car
12 can go on a tick.
13 All right. This particular invention,
14 dual-edge clocking says, okay, now we can have a car
15 go on the tick and we can have a car go on the tock.
16 It basically doubled the rate at which we were getting
17 traffic on the expressway. Now, that sounds simple,
18 but it’s a very complicated job in these devices to
19 make them work.
20 The fourth invention is called a delay lock
21 loop. Now, the inventors didn’t invent that. That
22 was a well-known circuit at the time. Engineers have
23 known that for a number of years, but putting a delay
24 lock loop on a chip, on a DRAM chip, was an invention,
25 and it was their invention, and what it does is it
1 makes everything run. All the circuits run much more
2 precisely than they otherwise would have run. And
3 people didn’t want to use them because, first, they
4 are complicated and, second, they take up a lot of
5 what they call real estate or space on the chip.
6 So it’s like the traffic metering lights on
7 the highways. If they are not set precisely to work
8 precisely right, they hurt the situation instead of
9 help it. So that’s what the delay locked loop was
10 supposed to do.
11 The thing was when these investors told
12 people they plan to put a delay locked loop or DLL on
13 every one of these chips, they were laughed at. They
14 were scoffed at. They said, “No, you can’t do that.
15 There’s a lot of reasons you can’t do that. That
16 doesn’t make any sense.” In fact, as late as 1996,
17 engineers were still telling them at some of these
18 major companies, “You can’t do that. It doesn’t make
20 But the Rambus inventors knew a dozen years
21 ago what all DRAM designers know today, and that is
22 you can’t get these kind of speeds that they were
23 envisioning without the precise timing that this
24 circuit gives them. So those are the four inventions
25 in this suit.
1 The inventors wanted to bring their
2 inventions to the world. So they had to think of a
3 way to do that. So they came up with a business
4 model. More accurately, it came up with them. These
5 two college professors didn’t have the money to start
6 a company, to compete with the giants in this
7 particular industry. The industry that makes DRAMs.
8 It costs hundred of millions to build these plants to
9 make these products. So they knew they weren’t going
10 to bring their inventions to the world that way.
11 Instead, what they came up with is an idea
12 how they would license their inventions, and here’s
13 how it worked: They would apply for patents. Patents
14 take years to get. But in the meantime, they would
15 enter into contracts with these DRAM makers to make
16 what we call or what they called Rambus DRAMs or
17 RDRAMS, and they would license all of their technology
18 to a company such as a DRAM company, and they would
19 not only say, “Here it is,” they would work with them
20 closely. They would have their engineers work with
21 them and show them how to use their technology into
22 making these chips.
23 They would be partners. And they called
24 their licensees partners because they would work
25 together to make these products, make their inventions
1 work with the products. And they didn’t make any
2 money for doing that. Where they made their money was
3 if their licensees, their partners, made chips, sold
4 them to systems companies, such as Dell or Compaq or
5 Nintendo that used these memory chips, then and then
6 only would they make money. They would make royalties
7 based on those sales of DRAMS to these system
8 companies, and they would come back to Rambus. That
9 was their business model. That was their business
10 model from the start.
11 Now, the business model involved patents.
12 Here’s how patents work. They have been with us since
13 the start of our country. They are authorized by the
14 Constitution. They are a legally recognized ownership
15 right, and they are a type of property, and they are a
16 property that comes about this way: The government
17 encourages people, inventors, to make their inventions
18 public so other people can study them. They can use
19 them and build on those inventions in the future. In
20 exchange what the government does is says, okay, we’ll
21 give you something called a patent. We’ll give you a
22 patent. And what you can do with this patent is you
23 can have the right for a limited period of years to
24 exclusively use or say who gets to use your
25 inventions. And typically that’s done by licensing.
1 So that’s the reward for applying for a
2 patent. If you get the patent, you get some property.
3 And it’s called intellectual property. And it’s
4 property just like a house. It’s property just like a
5 farm. It’s not real property. It’s intangible
6 property called intellectual property, but it’s the
7 same in the sense that you can lease your farm for
8 rent. You can lease or license, it’s called, your
9 patents for royalties.
10 So Mike and Mark worked for months. And
11 what they did is they wrote a patent application. I’m
12 holding it in my hand. And what it disclosed was all
13 of their inventions. They put it in one application.
14 150 claims at the end of this. And they filed this
15 April 18th of 1990, and it disclosed everything.
16 Now, a patent is very much like a patent
17 application in the sense that they both have two
18 parts. One part of the patent application is called a
19 written description. The second part is called the
20 claims. Well, Mike and Mark wrote the written
21 description, and the written description was written
22 for engineers, so they can understand how to make and
23 use these inventions. And if a patent is issued, then
24 that’s what the engineers turn to. So that’s what
25 they spent their months on literally at the kitchen
1 table writing this patent application.
2 The Patent and Trademark Office says,
3 “You’ve got too many inventions in there. You have to
4 break them up.” So ultimately there were a number of
5 patents that resulted from this original patent. One
6 of those patents is, for example, a patent-in-suit.
7 It’s called—there are seven numbers in a patent.
8 I’ll just use the last three. It’s called a ‘263
9 patent. The ‘263 patent has the identical written
10 description as the original. There’s a few little
11 changes in the drawing, but substantially it’s the
12 same written description, the same teaching, the same
13 disclosure of inventions as in the original filings.
14 It’s 29 pages, and all but the last two pages are the
15 written description, including drawings that tell
16 engineers how to make and use that invention.
17 Now, other patents were issued as a result
18 of this initial filing that aren’t involved in this
19 suit. And one of them we’ll hear about later is
20 called the ‘703. The ‘703 has about 25, 26 pages, and
21 again, all but the last two are the same as the
22 patents-in-suit, are the same as the original filing
23 in April of 1990, and that’s the so-called written
24 description part of the patent.
25 Now, they had to, to get licenses to make
1 this business model work, they had to get out and they
2 had to disclose their inventions to the industry. So
3 here are two teachers on a big teaching job. They are
4 going to teach the industry about their inventions.
5 They decided they would visit every semiconductor
6 company that would listen to them and try and persuade
7 them to license their inventions. They did this
8 starting in 1989.
9 But to protect against one of these
10 companies stealing their inventions, they relied on
11 written agreements, contracts of a special nature
12 called nondisclosure agreements or, for short, NDAs
13 Before they would say anything to any one of these
14 companies, they would say, “You have got to sign this
15 nondisclosure agreement or NDA.” And they did. They
16 signed NDAs with over 60 companies in that first year
17 and a half, two years.
18 Once they signed the NDA, they would tell
19 all. They would reveal all their documents. They
20 would reveal something called their technical
21 description that had everything that was in the
22 patents and more. Some of the companies wanted to see
23 their patent applications that are confidential, and
24 they let them see them under this NDA.
25 They had presentations. The inventors would
1 explain this is how our inventions work, and this is
2 how you can make and build products using them. And
3 these presentations would be attended by groups of
4 engineers for these various companies, and they would
5 ask them questions. They would delight in trying to
6 stump them, but they weren’t able to stump them much.
7 And so the initial impressions, this can’t
8 happen, you can’t make this kind of a leap, started to
9 melt after they were on the road and talked to all
10 these semiconductor companies. It melted sufficiently
11 for them to sign up to the biggest in the world. They
12 originally had what they called a three continent
13 strategy. They wanted somebody in Europe. A DRAM
14 company over in Europe. They wanted a semiconductor
15 company here in the United States, and most of the
16 business was in Asia at that time, so they wanted a
17 couple of the companies over in Asia. That was their
18 initial strategy. They wanted to get these partners
19 to work with them to bring their Rambus compatible
20 products out to generate royalties that would again be
21 the only source of revenue for this company they were
22 starting called Rambus.
23 The reaction was expressed in different ways
24 when they first made their pitches. In fact, one of
25 the Japanese companies, a couple of them, were just
1 politely silent when they told them what they could
2 do. A Korean company wasn’t quite so subtle and
3 actually accused them of lying when they said they
4 were going to make these computers running at 20
5 megahertz at a time go 500 megahertz.
6 But finally, they won them over, and they
7 signed their first DRAM company, which was Toshiba in
8 1990. And soon it was followed by Fujitsu, and not
9 long after that by NEC. These are all giants in the
10 industry where probably less than a dozen companies
11 make almost all the supply - the world supply of
13 So there was no mistake about using their
14 inventions improperly before patents were issued, they
15 required their licensees who had signed these
16 nondisclosure agreements to promise in the license not
17 to use their inventions for anything other than this
18 special type of DRAM called a Rambus DRAM or RDRAM.
19 And just for a good measure, they put field of use
20 restrictions in these licenses that says, “You cannot
21 use our inventions or any part of them for any
22 competing parts. Just the parts these Rambus DRAMs
23 are going to earn revenues for us.”
24 Finally, they signed up everybody. In fact,
25 even Infineon signed up in 1997. But I’m getting
1 ahead of myself. One of the first companies, I think
2 the first DRAM company that the inventors talked to
3 was Siemens. That was in February of 1990 before they
4 even had filed their initial patent applications.
5 What they did is they went to this company. Again,
6 it’s a large company. It has hundreds of thousands of
7 employees and does business in the tens of billions of
8 dollars a year, and had at that time something called
9 Siemens Semiconductor.
10 So it went to Siemens Semiconductor and
11 said, “We’d like to tell you about these things, but
12 first, you have to sign a nondisclosure agreement.
13 And if you sign it, then we’re going to give you
14 information that will let you decide whether you want
15 to be one of our partners. We’d like to have you as
16 our European partner.
17 Of course, Siemens signed. They signed this
18 agreement in February of 1990. And over the course of
19 the next almost two years they provided information to
20 Siemens. They thought it would take Siemens until
21 maybe April of 1990 to make a decision on whether to
22 sign a license with them or not. Siemens never did
23 sign a license at that particular time. But they were
24 interested in the technology.
25 After signing a license agreement in
1 February of 1990, there were a lot of exchanges.
2 There were personal meetings. There were
3 communications by phone. There were communications by
4 letter, fax, for the most part, and it was an exchange
5 of—it wasn’t an exchange, it was a one-way movement
6 of information of the Rambus interface technology.
7 Information about its inventions, all the details
8 about its inventions, how to use those inventions
9 going from Rambus to Siemens.
10 The Siemens people were generally positive
11 with respect to Rambus and encouraged them to give
12 them more and more information, but what we know now,
13 didn’t know then, is that they weren’t interested in a
14 license at the time. What they were interested in
15 from the outset was using selected portions of these
16 inventions in Siemens memory chips.
17 Here’s a letter. It’s the 28th of February,
18 1990, and it’s about a visit by Mr. Davidow, and a
19 number of people participated including a Mr. Penzel,
20 the head of Siemens Semiconductor, and Dr. Horninger.
21 Here’s what they found. Investigations with
22 regard of implementability of Rambus technology into
23 the Siemens particular size DRAM design need to be
25 Continuing on, further investigations need
1 to be performed with regard to application of Rambus
2 technology to video DRAM, not a Rambus product.
3 Here’s letter to Dr. Horninger with copy to
4 head of Siemens Semiconductor, Mr. Penzel and others,
5 March 6, 1990. “Do you think that the Rambus model
6 may be applied to our”—then it goes on to give some
7 numbers—“without changes being necessary to our
8 existing DRAM designs.”
9 So they were interested. They were
10 interested for the wrong reason. They were interested
11 in using portions of the Rambus inventions in their
12 chips, not in making Rambus products at that time.
13 Other memos widely distributed to the
14 highest executive levels in Siemens concerned the
15 positive impression they had of Rambus technology and
16 the positive interest they had.
17 After nearly six months of effort without
18 hearing anything from Siemens about a license,
19 Dr. Davidow writes a letter and says, in July of 1990,
20 he says, “Well, I’m sorry to hear that you’re not
21 interested. Or more accurately, I haven’t heard
22 anything from you for a while. Will you kindly send
23 our confidential materials, all of it that we’ve sent
24 to you, back.”
25 Immediately he got a letter from the head of
1 Siemens semiconductor, “No, no, we’re interested. We
2 just need more information.” And Rambus obliged.
3 It sent them their latest technical
4 description. It made presentations to them. They had
5 more personal meetings, a number of them. Everything
6 on top of that line are communications from Rambus to
7 Siemens. Everything below the line is what was going
8 on at Siemens, or at least what we know was going on
9 at Siemens at the same time.
10 We now know that the inventions in this
11 suit, particularly the delay time register and this
12 block size invention, were of particular interest to
13 Siemens. They were all over the information, their
14 engineers were. They even made drawings using parts
15 of the Rambus inventions.
16 Here’s a drawing made by a Mr. Michael.
17 They do their dates a little differently there. And
18 it’s September 23, 1990, and it shows access time and
19 block size. These are two of the four inventions that
20 I told you about. The Rambus inventions.
21 Incorporated not into a Rambus product, but
22 incorporated into a proposed Siemens design.
23 Later in 1991, Siemens brought in—it’s
24 the central research labs. The central research labs
25 for this very large company. It wasn’t just for
1 semiconductor division central research labs, it was
2 central for the entire company. And they said, “We
3 want you to do a further analysis of what we have
4 here, this Rambus technology.
5 So in a letter, actually a memorandum,
6 July 24, 1991, they get a report back from central
7 research labs. I’ll read it to you from here. Here
8 we go. “In recent years”—this again is Munich,
9 July 24, 1991. In recent years the access time of
10 DRAM memory chips could not keep up with the
11 requirements of modern microprocessors. The same
12 problem they were talking about back in St. Michael’s
13 Restaurant in October of 1998.
14 Then it goes on to say, Rambus is a new type
15 of approach for an efficient memory interface. The
16 semiconductor’s department has asked, and then all
17 that alphabet soup, the central research labs, for an
18 analysis of the suitability of the Rambus concept from
19 a system perspective.
20 They got that analysis. They continued.
21 The Rambus, as a memory concept, represents a
22 technological step forward. This is straight from
23 central research labs at Siemens.
24 Here’s a report they gave in July of 1991.
25 And it has a conclusion on the last page that I think
1 you might be able to read. I’ll read it to you. It’s
2 in the lower left-hand corner. It’s a slide
3 presentation. Rambus is technically and conceptually
4 a step further ahead but is that enough for market
5 acceptance? They were wondering about that then. And
6 in the bottom they asked the question, this is central
7 research: “Is Rambus a jewel?”
8 Now, after this years of study, 1990 and
9 1991, by the time they got to 1992 they were ready to
10 act. And they had an idea, an idea that others
11 suggested to them perhaps, and that was how could they
12 use part of the Rambus inventions in their products,
13 their SDRAM products that they were designing. And
14 what they did was they had an idea that they were
15 going to make it public domain. And here’s where they
16 got it.
17 They had a meeting back in April of 1992,
18 and in this meeting there was a report. Actually it
19 occurred on April 10 of 1992. And there was a report
20 on the meeting. The participants included some of the
21 top executives at Siemens. I’ll just tell you what
22 the report said. The report basically said—well,
23 here it is. It’s working now.
24 NEC and Samsung have announced samples for
25 the end of ‘92, and TSB, that’s Toshiba, for ‘93,
1 public domain version of a Rambus memory, exclamation
3 So, this was Siemens’ view of these new
4 samples. And the evidence will show that this new was
5 because these new samples, these Sync DRAMs that came
6 out, were apparently using Rambus inventions. And
7 that’s the conclusion the evidence will show that
8 Siemens drew at that particular time.
9 So, Rambus, they say, currently no action
10 required. Preliminary results of our design study of
11 Sync DRAM show great similarity with Sync DRAM that is
12 adjacent to Rambus. Great similarity between Rambus
13 and Sync DRAM. Then they enclose a comparison between
14 Siemens and IBM positions.
15 Now, the reason that they were working with
16 IBM at that time is because they had a problem.
17 Despite its huge size Siemens had a big problem. It
18 didn’t have the design engineers to do a new SDRAM
19 design on its own. It had a number of reasons that it
20 was incapable of doing an SDRAM design on its own.
21 I’ll let Siemens executive, Mr. Bidler, explain that
22 to you in his owns words.
23 (At this time a videotaped segment of Mr.
24 Bidler’s deposition is played for the jury.)
25 MR. MONAHAN: So what they needed was help,
1 and they looked first to a partner. They had gone
2 into an alliance with IBM. And they were looking very
3 heavily to IBM to jointly design this new Sync DRAM
4 product with them. They worked primarily with a
5 fellow named Gordon Kelley at IBM.
6 So they got together with IBM in April of
7 1992, and here’s what they talked about. Here’s a
8 report of that telephone conference on April 29, 1992.
9 And again the participants were Gordon Kelley, Mr.
10 Meyer, you’ll hear more about Mr. Meyer, Dr. Peisl,
11 and then kept everybody else, including Mr. Penzel,
12 the head of Siemens Semiconductor, informed.
13 Rambus visited the most important in-house
14 users at IBM. Rambus is still being observed by IBM.
15 Rambus has announced it is demanding 10 million from
16 Samsung because of similarity of SDRAMs with the
17 architecture of Rambus memories. IBM is therefore
18 seriously considering purchasing a license as soon as
19 possible and as a precaution (at the introductory
20 price.) So this is what Siemens and IBM were
21 discussing about Rambus back in April of 1992.
22 At this same time, though, there was a
23 confidential report that was issued within Siemens and
24 basically there was a decision made at this point.
25 We’re going to copy Rambus. Not all of their
1 inventions. We don’t want all of them. We’re going
2 to copy some of them.
3 And here’s what they reported April 30,
4 1992. This is a report, April 30, 1992, and a summary
5 appears on the first page. And they are referring to
6 eliminate the memory bottleneck. Same kind of thing
7 talked about back at St. Michaels in October of 1998.
8 Next. Moving to page 2, in the JEDEC
9 Committee on MOS memories, attempts have been made for
10 roughly a year now to define a universally usable
11 successor for the previous DRAM, so-called Synchronous
12 DRAM (SDRAM).
13 Next. Samsung and NEC have announced
14 samples for the end of 1992 and Toshiba for mid-1993,
15 and they are apparently ready to enter the market
16 without waiting for eventual standardization.
17 These are the same ones referred to earlier
18 in the memo in April. They weren’t standard. They
19 weren’t interchangeable. They were going off on their
20 own with these SDRAM parts.
21 Next please. The original idea of the SDRAM
22 is based on the basic principles of a simple clock
23 input (IBM toggle pin) and the complex Rambus
24 structure. NEC (Rambus license holder) was the first
25 to suggest a leaner public domain version based on
1 this. Maintain a synchronous controlled two banks,
2 four-fold, internal data bus, four-word register, the
3 data output, and so on and so on, from the Rambus
4 while leaving off the proprietary Rambus control
6 So they didn’t want all of it. They wanted
7 to leave some of it off. They just wanted to pick
8 some of the inventions.
9 It is possible and it is being discussed to
10 go even further and to restrict it to one bank as well
11 as two-fold data bus synchronous control. Samsung
12 seems to follow this path. That’s with their Sync
14 In the meaning time, it’s become clear that
15 a Rambus memory can easily be converted into a SDRAM
16 (one or two banks) or conventional DRAM.
17 Next. All right. So what else was going on
18 at this time? IBM and Siemens were continuing to get
19 together and trying to work out what they were going
20 to do jointly to come up with this SDRAM product.
21 They had an alliance. An alliance Toshiba joined in
22 1992. But here it’s just Siemens and IBM. And here’s
23 what they’re saying. They’re putting together the
24 pros and cons of going with this Sync DRAM or Rambus
1 Under the pros, they say, for Sync DRAM,
2 it’s public domain. Anybody can use that. The cons,
3 Rambus patents. That’s the cons they were evaluating
4 in May. May 6 of 1992.
5 And for the pros under the Rambus DRAM they
6 said, well, it’s faster than a Sync DRAM, but the con
7 is Rambus property. Willie Meyer, May 6, 1992.
8 Now, what their strategy was, basically—
9 Oh, attached to that report I might add was a block
10 diagram of the proposed joint IBM-Siemens SDRAM, and
11 it had the delay time register, the access time
12 register, the same ones I showed you in the earlier
13 drawing right smack in the middle there. That’s what
14 they were planning to do. So that was their SDRAM
15 product they were playing on incorporating selected
16 parts, not all, they didn’t want all of the Rambus
17 inventions. That’s want they wanted to develop with
19 Their strategy actually was to use a
20 standards group called JEDEC as a placeholder for
21 their proposal. Because they were behind the Asian
22 DRAM manufacturers, behind by a mile, and because of
23 this lack of resources that Mr. Meyer explained to
24 you, they wanted to be a player in the world market,
25 the world DRAM market. They didn’t want to lag too
1 far behind, although they weren’t leaders, but they
2 needed a strategy so they would be able to close the
3 gap somewhat between the Asian DRAM makers and
4 themselves at the appropriate time.
5 So what they did is they said, okay, we’re
6 going to join this effort to make Rambus public
7 domain. We, IBM, and Toshiba are going to get
8 together, and we’re going to help put what we want
9 from Rambus into the public domain. And the way they
10 did that was through a committee called JEDEC that I’m
11 going to talk to you a little bit more about later.
12 But they had some—there was some
13 disagreement. In fact, at one point they appeared to
14 be upset that they weren’t getting enough credit for
15 putting things into this JEDEC public domain standard
16 that they hoped to see. So there’s a memorandum, and
17 it’s April 1st of 1993. And the memorandum basically
18 is complaining—I’ll just read it.
19 Dr. VonZitzewitz, Dr. Beinvogl and myself
20 are somewhat astonished at the procedure that has been
21 agreed upon. I’m sure there are reasons for it. Why
22 is there not to be a joint IBM, Siemens, TBS - is for
23 Toshiba - presence? I suspect that one has given
24 priority to Toshiba as author of the first proposals
25 and Siemens-IBM are supposed to introduce any
1 modifications that result from in-house of JEDEC
2 discussions in subsequent JEDEC sessions.
3 All right. So they’re saying Toshiba
4 apparently ought to be the author to take the lead,
5 and then Siemens and IBM are going to clean up with
6 modifications. And then they conclude, “That would
7 perhaps not wreak quite as strongly of a cartel and
8 might be better received.”
9 So that’s what their thinking was back in
10 1993 when they were picking and choosing selected
11 parts of Rambus inventions to make this public domain
12 SDRAM. They put their plans on hold for a little
13 while because they wanted to wait and watch. They
14 wanted to wait and watch what the market did.
15 In a memo October 13 of 1993, they said they
16 are going to look and see what the market does. They
17 are going to wait and watch.
18 Reasons? Whether SDRAM remains a niche
19 product, a small segment product, or replaces DRAM
20 will only be decided during the course of 1994. Both
21 scenarios are equally likely. And they continue. A
22 compulsory situation (DRAM no longer sellable) can
23 arise in 1997 at the earliest with two years
24 headstart. I can’t read the next one. Start in
25 August ‘94 is sufficient.
1 So what they’re saying in ‘93 is we don’t
2 need to go ahead as quickly as we thought we would if
3 we start in ‘94. That will be plenty. We’ll be able
4 to maintain the gap behind the Asian DRAM makers at an
5 acceptable distance.
6 Okay. So that’s what they were thinking in
7 1993. And here were their plans to make portions of
8 the Rambus DRAM public domain.
9 I told you I’d come back to JEDEC in just a
10 moment, and so I will now. JEDEC is a
11 standard-setting group. There are 600
12 standard-setting groups in the United States. They
13 are not part of the government. They are private
14 groups that are basically trade associations that act
15 on behalf of their members.
16 But in December of 1991 at the suggestion of
17 Toshiba, one of Siemens’ alliance partners, Rambus
18 began attending meetings of these JEDEC Committees.
19 Now, JEDEC is basically an acronym. It’s
20 not important what it stands for, but at one point it
21 was Joint Electron Device Engineering Council or
22 something like that. It’s part of a group. It’s
23 really just a committee, but it’s part of a group
24 called EIA, a private trade association. Again, not a
25 government association. It lobbies the government.
1 It does standards work, gets marketing information on
2 behalf of its members. Rambus never joined the EIA.
3 But getting back to JEDEC, its members were maybe two
4 to 300 at any one time, and on the committees Rambus
5 was attending there would be maybe 50 or 60 attending
6 the these committees, the DRAM or memory committee in
8 The only requirement for going to these
9 committee meetings was you had to pay your dues. They
10 were held in nice places, usually Hawaii in winter,
11 and it was a good place to see what was going on with
12 your competition, and also to meet personally with
13 your customers.
14 And so Rambus went to several of these
15 different committee meetings starting in December of
16 1991. The meetings we’re open. They were
17 non-confidential. People would bring guests on
19 Some of the JEDEC members, though, like some
20 of the giant DRAM makers, had a little bit more say-so
21 than others. The real say-so in JEDEC was held by the
22 council. Rambus never attended a council meeting, nor
23 did it qualify for membership. People like Toshiba,
24 Samsung, IBM, NEC, those were the people who ran the
committees and sat on the council and made the
1 important decisions. But I told you it was a
2 standards committee. And some of you may know what
3 standards are.
4 I brought some small standard products so I
5 can put them in my pocket. This is a flashlight
6 battery. It’s a standard product because this one is
7 made by Ray-O-Vac, but you know if you go to the
8 store, you find one made by Energizer that you can
9 switch them around and they’ll work pretty much the
10 same way. So that’s what a standard product is.
11 Since Rambus is a standard product, it took
12 great pains to make sure that whether it’s Toshiba or
13 NEC or Samsung making its Rambus parts, the consumer,
14 Dell, Compaq, Nintendo, wouldn’t know the difference.
15 They would all be interchangeable. They would act the
16 same. So that’s how—that’s a standard product.
17 Standards sometimes are set by the market.
18 Somebody gets out in front and then people follow
19 them. Sometimes they are set by committees. But the
20 great majority of committee standards don’t result in
21 products. Much less products with any great volumes.
22 In fact, here we have a committee—
23 May I step up here, Your Honor?
24 THE COURT: Anything you want to do is all
1 MR. MONAHAN: Thank you.
2 Here we have a committee with Rambus first
3 attending as a guest in December of 1991, and that was
4 right after the SDRAM standard setting began. Rambus
5 noted in May of 1992 that two of their inventions,
6 burst and latency, were being talked about. And they
7 were asked to comment on their patent situation. They
8 didn’t have any patents. The first one wasn’t issued
9 until September of 1993. But there was a patent
10 policy at this time at JEDEC.
11 In fact, most standards committees would
12 have something called a patent policy. And that was
13 to try and encourage people to commit in advance to
14 license their patents on reasonable terms and
16 Now, JEDEC says, “We’re not going to help
17 you determine what reasonable terms and conditions
18 are.” In fact, the chairman of JEDEC said reason
19 terms and conditions are in the eye of the beholder
20 when asked to explain what that meant. But the idea
21 was most patents—excuse me. Most standards are
22 going to have patents. You’re going to have, you
23 know, cutting-edge technology. So most patents—I
24 mean, most standards have patents that are applicable,
25 multiple patents that are applicable to them. And
1 what these committees, including JEDEC, were trying to
2 accomplish was, let’s try and get the patents out and
3 people commit to license them on reasonable terms and
4 conditions. And I’ll say now that Rambus since its
5 inception in 1990 until the present day it’s been in
6 the licensing business, and it has always licensed its
7 patents on reasonable terms and conditions.
8 Some of the people, IBM, for example, one of
9 the committee chairman, Gordon Kelly, said, “We’re
10 going to ignore the patent disclosure rule.” Said
11 this in March of 1993.
12 Later in ‘93, they just said, “Well, we’re
13 not going to list applicable patents to a particular
14 thing that the committee is talking about. We’re just
15 not going to do it.”
16 Most of the people weren’t quite so vocal as
17 IBM saying we’re not going to follow. They just
18 didn’t follow it. Rambus took the other approach.
19 Rambus disclosed the same month its first patent was
20 issued, the ‘903, it disclosed that to JEDEC.
21 And finally, when it left, it disclosed all
22 of its patents. Something no other of those companies
24 They tried to change the patent standard in
25 October 1993 to include applications. Up until then
1 and when the standard for the SDRAM was passed it had
2 just been patents. It had not been applications at
3 all. But then they kind of confused the situation by
4 every single meeting that Rambus ever attended showing
5 the pre-October 1993 policy that just called for
6 patents, not patent applications.
7 But in any event, Rambus was proud of its
8 first patents and disclosed it immediately at JEDEC,
9 and it’s called a ‘703 patent. It’s not involved in
10 this lawsuit as a patent-in-suit. But it’s involved
11 in the sense that all but the last couple of pages is
12 identical with the patents in this suit, and similar,
13 almost identical, for practical purposes with the
14 original filing by the inventors in 1990. But here is
15 what else the ‘703 did.
16 The ‘703 listed all of the other
17 applications that had the same written description as
18 the patents-in-suit, same written description has the
19 ‘703, same written description as the originally filed
20 patent. And it says there’s these ten other
21 applications that are now pending in the patent
22 office. So anybody that looked at this knew that
23 Rambus was pursuing all these other patents.
24 Remember, I said there were so many inventions in the
25 original application that they had to break them up.
1 Rambus was pursuing all these other patents
2 on those same inventions that were disclosed in 1990.
3 Siemens picked it up and looked at it. In fact, they
4 studied it pretty thoroughly. But I’m getting ahead
5 of the story at this point.
6 Back to JEDEC. Rambus starting in May of
7 1992 says, They are ripping us off. They are
8 partners. In fact, the licensees, people who had
9 signed licenses and promised not to use Rambus
10 technology for competing parts, were feeding this
11 information into JEDEC. Feeding it into the public
12 domain for competing parts.
13 Toshiba did this. Siemens and IBM joined
14 them. So what did Rambus do? It told its lawyers,
15 “Make sure you get all the protection we’re entitled
16 to from the Patent and Trademark Office.”
17 So its lawyers wrote some more claims,
18 again, based on the original inventions of Rambus, and
19 it also told them, “Don’t worry. You’re protected.
20 Let’s see how the prosecution goes. And as long as
21 the prosecution is continuing, we can continue to add
22 claims. So we don’t have to do everything now.”
23 They didn’t do a great job because most of
24 their work didn’t hit the mark. In fact, I don’t know
25 that any of it did. The patents in suit weren’t filed
1 until 1998, 1999, and the issue in late ‘99 and 2000.
2 Those are the claims that apply to the products that
3 we’re dealing with here.
4 The three patents in suit, I told you about
5 the ‘263. It was filled October 20, 1998, and it was
6 issued September 14, 1999.
7 The second one we’ll call the ‘214 patent.
8 Just the last three digits. And that was filed
9 February 19, 1999. Issued February 29, 2000. And the
10 third patent in suit is called the ‘918 patent. And
11 it was filed February 19, 1999. Issued March 7, 2000.
12 And again, these patents have the same
13 written description as the initial filing, and as the
14 ‘703 for that matter.
15 Now, I’ll finish up the JEDEC story. Rambus
16 in May of 1995 was asked to comment on its patent
17 situation with respect to another standard. It was
18 called an IEEE SyncLink draft standard. And they
19 said, “Why are we being asked to comment on this at an
20 JEDEC meeting? That’s an IEEE proposed standard.”
21 And they said, “Okay. We’ll get back to you.” And
22 they did.
23 The very next meeting they got back and
24 here’s what they said: September 11, 1995, they wrote
25 a letter. This letter was shown up on a wall just
1 like this. It was read, and it was attached to the
2 minutes and circulated to every member. And here’s
3 what they said about their intellectual property.
4 Everybody knew they were a licensing company.
5 Everybody in that room had had a pitch from them. And
6 most of the DRAM companies were by then their
7 licensees. And what they said about their
8 intellectual property was at this time Rambus elects
9 to not make a specific comment on our intellectual
10 property position relative to the SyncLink proposal.
11 This was this draft proposal that was still in
12 process. Our presence or silence at committee
13 meetings does not constitute an endorsement of any
14 proposal under the committee’s consideration, nor does
15 it make any statement regarding potential infringement
16 of Rambus’ intellectual property. So if it hadn’t
17 been clear before, it was clear then what their
18 position was.
19 They attended their last meeting in December
20 of 1995, and because of these inquiries about
21 SyncLink, this IEEE, there were some other inquiries,
22 they finally re-evaluated their position and said the
23 gain isn’t worth the gamble. These people wanted
24 commitments on our licensing policies, and we license
25 on reasonable terms and conditions, but we don’t want
1 to have restrictions. We license on our terms. And
2 we negotiate with our licensees, and we don’t want a
3 standards company or organization coming in and
4 interfering with that. So they decided to leave. So
5 they did leave. They didn’t pay their dues in 1996.
6 They didn’t go to any meetings after December of 1995.
7 And they decided that they would send a
8 letter to the IEEE and say, okay, here’s all our
9 patents. And so they did. They got their lawyers to
10 check them, and they made sure they listed every one
11 of their patents, not just the Farmwald/Horowitz
12 patent, every patent that they have. They said, “Here
13 they are. You can evaluate them. We’re in the
14 licensing business. If you want to license them from
15 us, you know where we are.” So they sent that to this
16 IEEE organization.
17 They also sent a letter to JEDEC, and that
18 letter was sent the 16th of June—excuse me. The
19 17th of June 1995. And that letter also had a list of
20 patents attached to it, the same one essentially that
21 had gone out before, but it had gone through a number
22 of drafts. It had been drafted in March. It had gone
23 through several iterations in March and for some
24 reason didn’t get out for a couple three months, until
25 June, and in the interim, in those three months, one
1 more patent had issued called a ‘327 patent. And that
2 wasn’t on the list. And Infineon, you know, will make
3 a big deal about that.
4 But in any event, that was an oversight. It
5 was a patent that’s never been asserted against
6 Infineon or any DRAM manufacturer and never will be
7 asserted against Infineon or any DRAM manufacturer,
8 and it’s not involved in this lawsuit.
9 But getting back to the letter, here’s what
10 they said. Rambus plans to continue to license its
11 proprietary technology on terms that are consistent
12 with a business plan of Rambus.
13 And those terms may not be consistent with
14 the terms set by standards bodies, including JEDEC. A
15 number of major companies are already licensees of
16 Rambus technology. We trust that you will understand
17 that Rambus reserves all rights regarding its
18 intellectual property. Reserves all rights regarding
19 its intellectual property.
20 So it last attended December of 1995. That
21 wasn’t the last comment about Rambus. In December of
22 1996, they did their first work in JEDEC on something
23 called DDR SDRAM. That’s one of the two main products
24 that are involved in this lawsuit. Rambus is gone by
25 this time when they start working on the DDR SDRAM
1 standards, but they aren’t finished talking about
3 Here’s a portion of minutes March 13 and 14
4 of 1997. Rambus has been gone for quite a while at
5 this time. And it’s NEC DDR SDRAM proposal, Item
6 No. 844, and they say our first showing was made. You
7 will be hearing what those things are. And there was
8 a discussion.
9 Some on the committee felt that Rambus had a
10 patent on that type of clock design. Others felt that
11 the concept predated Rambus by decades. Some
12 committee members did not feel that the Rambus patent
13 license fit the JEDEC requirement of being reasonable.
14 Rambus has also told JEDEC that they do not
15 intend to comply with JEDEC patent policies. That was
16 in the letter that we talked about. So they are gone,
17 but not forgotten at JEDEC.
18 All right. What happened next? After these
19 patents in this suit were awarded in 1999 and 2000,
20 Rambus went out to the industry, to these guys who
21 make these DRAM chips, or rather the giant, Toshiba, I
22 think second only to Intel as far as semiconductor
23 manufacture, came to Rambus. And it came to Rambus
24 and it said, “We want a license. We want to license
25 our SDRAM and we want to license our DDR SDRAM
2 So they sat down and did what business
3 people do, and they negotiated back and forth, and
4 after awhile they came up with a license. In June of
5 2000 Toshiba, one of the first people to put parts of
6 Rambus inventions into this standard, came to Rambus
7 and they signed a license. Followed by Toshiba was—
8 and I might add that the Toshiba engineer was the
9 chairman this whole time of this JEDEC Committee.
10 Next came NEC, also an industry leader, and
11 somebody took an active role in JEDEC in getting this
12 JEDEC SDRAM standard, and they said, “Okay. We want a
13 license as well. So they negotiated and then NEC took
14 a license.
15 Next came Samsung, the biggest DRAM
16 manufacturer in the entire world. They sat down.
17 They negotiated a license on reasonable terms and
18 conditions with Rambus.
19 Samsung, NEC and Toshiba, these were the
20 companies that had first been out with the Sync DRAM,
21 had first been cherrypicking Rambus inventions and
22 participated in putting Rambus into this JEDEC
23 standard. They signed licenses.
24 They were followed soon by Oki, Fujitsu, a
25 new company called Elpida, it’s a Hitachi and NEC
1 joint venture, and Mitsubishi. So we now have in a
2 very short amount of time after these patents issued
3 nearly half the world supply of DRAMs or at least the
4 makers of them signing up for licenses with Rambus.
5 All right. What about Infineon? By this
6 time it’s Infineon. In April of 1999, Siemens spun
7 off its semiconductor unit and created this company
8 that’s here in court today called Infineon. Siemens
9 still owns 71 percent of Infineon.
10 But did Infineon have an opportunity to
11 license on these terms that were given to other
12 people? Well, in June of 2000 they were made an
13 offer. The opening offer was a little bit higher, but
14 they came down, and Infineon had the same opportunity
15 that Samsung, NEC, Toshiba, and three or four other
16 companies on top of them had to sign license for their
17 SDRAM and their DDR SDRAM products.
18 Now, the evidence will show that they didn’t
19 even really sell their first SDRAM product until 1998.
20 That’s when they started doing this in volume. They
21 still have yet to sell—maybe that’s not true today,
22 but at some point, pretty quick, they are going to
23 start making volume shipments of DDR SDRAM. All of
24 these steps were taken after they had this knowledge
25 we have talked about starting in 1990 of the Rambus
1 inventions, the Rambus business model, and the Rambus
2 patent applications.
3 They were offered the opportunity. They
4 turned it down. They were told during the
5 negotiations that if you’re not going to stop using
6 our property, our intellectual property, I mean, if
7 you’re not going to license it, you have to stop.
8 Take your pick. You can license. You can stop. You
9 can’t have it both ways. They didn’t license. And
10 they didn’t stop.
11 Basically, what it’s done, what Infineon has
12 done is put its competitors in the same situation as
13 Infineon was trying to avoid. What it is is this
14 prior competition, these Asian DRAM makers that signed
15 up for licenses and are paying reasonable royalties to
16 Rambus for using these inventions in their SDRAM and
17 DDR SDRAM products.
18 The result is they are now at a competitive
19 disadvantage with Infineon because Infineon is using
20 the inventions and is not paying anything for them.
21 I am going to quickly just touch on a couple
22 of the issues in this lawsuit. Very quickly. After
23 Rambus was required to bring this suit to enforce its
24 intellectual property, and that’s what you have to do
25 if someone doesn’t respect your intellectual property,
1 you have to sue in a court like this. The government
2 gives you the patent, but they don’t help you enforce
4 So after Rambus brought this suit, then it
5 was met with a counterclaim that you will hear about.
6 I’m not going to talk about the counterclaim except
7 for just one moment. This counterclaim accuses these
8 people of fraud, antitrust monopolization. It accuses
9 them of being racketeers. All I’m going to say about
10 their counterclaim is during the years of business
11 relationships, during the last few years when they’ve
12 been a Rambus licensee, during the months starting in
13 June of 2000 when they negotiated for a license, not
14 one of these claims or a hint of one of these claims
15 was ever raised.
16 I am now going to address the evidence in
17 Rambus’ lawsuit for patent infringement. Basically,
18 there’s just three issues. One issue is: Are our
19 patents valid? Did the Patent Trade Mark Office make
20 a mistake in issuing these patents? And that’s one
21 reason that Infineon says we’re not going to pay you
22 anything for this because we’re not going to take a
23 license on the same terms because your patents are no
24 good. You don’t own any intellectual property. The
25 second reason, excuse that they use to excuse their
1 not taking a license is they don’t infringe. They
2 say, okay, if you own property, we don’t use it. Our
3 SDRAM and DDR SDRAM products made to the same
4 standards and Toshiba’s and Samsung’s and NEC’s, and
5 they don’t infringe your—they don’t use your
7 We’re going to show they use latency. They
8 use block size in their DDR part that will be out soon
9 if they are not out already. They use double data
10 rate or this dual-edge clocking. And they use the
11 delay locked loop or DLL chip. We’re going to show by
12 their own data sheet that they use every one of these.
13 They do infringe.
14 And then they finally say, well, we don’t
15 have to take a license because of this JEDEC contract
16 of yours. Here’s what they say. That JEDEC and its
17 members, including Infineon, developed and adopted
18 standards in justifiable reliance on Rambus’ silence,
19 conduct and/or misrepresentations, that SDRAMs and DDR
20 SDRAMs manufactured pursuant to such standards did not
21 and would not infringe any patents of Rambus, and/or
22 that such patents would not be asserted against JEDEC
24 Well, in English what that says is Rambus
25 hoodwinked us. It hoodwinked us into building their
1 parts, into thinking that Rambus’ technology licensing
2 company was either not getting any patents or it was
3 abandoning any right to seek royalties for whatever
4 patents it did get.
5 The evidence will reveal a very different
6 story. I’m going to touch just on part of it before I
7 conclude. First, since February of 1990, Rambus has
8 been telling them about their inventions, told them
9 for a year and a half how to use those inventions in
10 end products, and it told them we’re applying for
11 patents. That’s how we’re going to make our money.
12 We’re in business, and we’re going to obtain our
13 revenues for this business from licensing our
14 technology. Started telling them that in 1990.
15 In 1992, as I’ve touched on, when Samsung,
16 NEC and Toshiba came out with these Sync DRAM parts,
17 Siemens recognized them as stripped down or leaner, as
18 they called them, versions of Rambus and, remember,
19 IBM said, well, Rambus is demanding data from Samsung,
20 and we’re considering a license.
21 In 1992, two of the three DRAMs, SDRAM
22 alternatives that they were looking at, that is SDRAM
23 and Rambus DRAM, they had the pros and cons charts.
24 You’ll see three of those pros and cons charts. And
25 the pros are always “SDRAM is public domain,” and the
1 con for Rambus is “It’s Rambus property and Rambus
2 patents.” You’ll see those charts.
3 You’ll hear evidence of how in May of 1992
4 right after this pro and con chart and this concern
5 for Rambus patents that they tried to get Rambus to
6 reveal its confidential patent applications at a JEDEC
7 meeting, May 7th of 1992.
8 They did this despite knowing that JEDEC,
9 the JEDEC chairman felt then - I assume he felt then,
10 he felt years later - that people wouldn’t disclose
11 claims in a patent application in a JEDEC meeting.
12 Here’s what he says: He says that—he
13 says that we have there legal guidelines that call for
14 use of a patented item or process. That is a standard
15 that calls for use of a patented item or process may
16 not be considered by a JEDEC committee unless all of
17 the relevant technical information covered by the
18 patent or pending patent, he’s talking after
19 October ‘93 here, this is in May of 1996, covered by
20 the patent or pending patent is enough, which is never
21 possible because the person who is processing the
22 patent application won’t disclose the claims because
23 it corrupts his ability to protect his claims. That’s
24 what the chairman, Mr. Townsend, of this committee
25 felt in 1996.
1 And so the Rambus representative didn’t
2 fall—didn’t take the bait, and he didn’t reveal the
3 patent position or confidential patent position at
4 that meeting.
5 But let’s go on. Were they concerned after
6 the meeting about Rambus patents? On June 11th of
7 1992 in a telephone memo of a conference that took
8 place on June 10, 1992 between Willie Meyer of Siemens
9 and Gordon Kelly of IBM, they talked about this table
10 of alternatives. Again, another pro and con table.
11 Next page, please. And here it is. Here is
12 comparing the Sync DRAM with Rambus and one third
13 player that never made the cut. And this is the
14 IBM/Siemens documents.
15 Would you go back, please? And here it is.
16 Compare the alternatives. Sync DRAM, the pro, is
17 public domain. The con is patent problems. You have
18 got Motorola here, as well as Rambus.
19 Let’s go down to the Rambus cons. Rambus
20 property. This June 11th of 1992, over a month after
21 this May meeting in JEDEC where they tried to get the
22 Rambus representative to comment. And he didn’t go
23 for it.
24 They weren’t through. There was a
25 presentation in September of 1992. And at that
1 presentation they had slides. And they showed these
2 transparencies up on the wall. There were a number of
3 people there, but not one person has owned up to being
4 in this audience that was assembled, but here’s what
5 they were shown.
6 Siemens is making this presentation. Mr.
7 Meyer. September of 1992. And he asked, “What is
8 Rambus?” He says, “A small firm without a fab,” and
9 you’re going to hear that if you don’t make chips,
10 basically, you’re not one of the club. So that’s kind
11 of a derogatory comment about Rambus at this point.
12 But then they go back to the Rambus pros and
13 cons. So here they are in September of 1992 with
14 almost two years of studying Rambus, and what do they
15 conclude? A fascinating technical concept. I assume
16 that’s a pro. We’ve got a con. “Deadly menace to the
17 established computer industry.”
18 Now, keep in mind this is a company that
19 maybe has 40 people. This is a company with hundreds
20 of thousands of employees. This is a company that’s
21 told the world, “We’re not going to make chips and
22 sell them. We’re not going to have chips made and
23 sell them.” The evidence will show that this deadly
24 menace is because of their business model, licensing
25 patents. So that’s the way they were viewed.
1 In case there was any doubt about that and
2 about the awareness and continued awareness of Rambus
3 patents—excuse me. I left off the alternatives.
4 After they went through the pros and cons,
5 they had some alternatives. They said, okay, here’s
6 what Rambus is. Here are the pros and cons. They are
7 this deadly menace. Their patents are a concern to
8 us. The pro is it’s fascinating. So what do they
9 suggest as alternatives? These are alternatives for
11 So what do they do? This is in September of
12 1992. Here are the four alternatives that they offer.
13 The first alternative is push the computer technology.
14 Join Rambus. Get on the cutting edge of the wave.
15 They rejected that alternative.
16 The next one was protect your own computer
17 industry. Protect it from this deadly menace. Buy
18 Rambus and dump it. They didn’t take that
20 Support the Japs. Wait and watch. They
21 took that in part. Remember that memo. Let’s wait
22 and see what it goes. We don’t want this to be just a
23 niche product. But then here was their predominant
24 alternative. Make it Rambus. Public domain. Join
25 Sync DRAM, exclamation point, exclamation point,
1 exclamation point. That was their position in
2 September 1992.
3 Now, they didn’t forget about Rambus
4 patents, and again, we’ve been through the disclosure
5 of the ‘703 in 1993, and the comments that were made
6 about their intellectual property.
7 Mr. Meyer was at that meeting where the ‘703
8 was disclosed, and he said, “Somebody made a comment
9 about Rambus pending patent applications. I don’t
10 remember their name. I didn’t check out anything that
11 they said. But here’s what he said. I’ll just use
12 his words.
13 This is September 1993 after the Rambus ‘703
14 patent is disclosed. “Did someone during a meeting
15 after the ‘703 was disclosed indicate that there were
16 difficulties with an application that had been filed
17 by Rambus in the U.S. Patent Office?”
18 “Answer: Yes.”
19 “Question: What was said about that?
20 “The word stuck was used.”
21 “Question: What’s the best recollection you
22 have of what was said about an application being
24 “Answer: They were reported, the patent
25 applications, they were reported to be stuck because
1 they can never be patented as being a collection of
2 prior art.”
3 “Question: What was stuck? Was it a patent
4 application by Rambus?”
6 So we know the company was aware from 1990
7 up until the time it was put on notice of infringement
8 of this lawsuit of a couple of things. First, that
9 Rambus had inventions, and second that they were going
10 to seek reasonable royalties to license those
11 inventions and the patents for those inventions.
12 1994 in a memo to its lawyer, Eric Kempfel,
13 Mr. Meyer put up a number of patent holders, quoted a
14 number of patents that will comply to any standard,
15 SDRAM standard notwithstanding, of other companies and
16 patents and what products they apply to. And most of
17 these were SDRAM products. And it gets over to
18 Rambus, and it has the US5243703. The patent I told
19 you about that they said earlier didn’t have anything
20 to do with SDRAMs. Product, SDRAM.
21 And they don’t stop there. You see this
22 seven question marks preceded by US. All U.S. patents
23 have seven numbers. Just like the ‘703. And so below
24 the ‘703, Rambus, they put seven question marks,
25 diverse. Many.
1 So that’s what they thought about Rambus’
2 intellectual property in 1994. That’s not all they
3 thought. They weren’t hoodwinked. They were aware of
4 our inventions and our intention to get patent
5 protection, the fullest patent protection we could get
6 under the law for those inventions, and license those
7 inventions for reasonable royalty.
8 They also, as we’ll show by the evidence,
9 starting in 1992 set out on a course to cheat Rambus
10 out of royalties, at least royalties from Siemens,
11 later Infineon, and decided to use selected portions
12 of the inventions without any royalty payments.
13 Since then they have knowingly and willfully
14 infringed Rambus patents. They haven’t stopped to
15 this day. In a technology driven field like this is,
16 you don’t know what’s going to happen tomorrow, but
17 you know for sure that today’s cutting edge technology
18 is obsolete tomorrow. But sometimes when you look
19 into the future, you can be accurate, and we know what
20 Siemens thought when it looked into the future back in
22 In a memo from Mr. Meyer to Mr. Penzel, the
23 head of Siemens Semiconductor, March 31, 1994, this is
24 the way Mr. Meyer concluded. And this is the way he
25 saw the future. “One day all computers will have to
1 be built like this.” He’s talking about Rambus. “But
2 hopefully without the royalties going to Rambus.”
3 Thank you for your attention.
4 THE COURT: All right. Ladies and
5 gentlemen, we’ll take about a 20-minute recess to let
6 you move around a little bit, and then we’ll be back
7 in 20 minutes by that clock, please, Mr. Mack.
8 All right. All please remain seated while
9 the jury is being excused. You can take your pads
10 with you if you’d like to. And you may as well write
11 your name on them because we will collect them at the
12 end of the day and return them to you tomorrow.
13 Anybody, ladies and gentlemen, who needs to
14 stand up at any time, remember I told you you’re free
15 to do it.
16 (The jury is excused from the courtroom.)
17 THE COURT: Mr. Mack, are the first two rows
18 there for the lawyers?
19 MR. MACK: Yes, sir.
20 THE COURT: When you come back in, if you’re
21 going to come back in, make sure you’re back here and
22 seated in 20 minutes by that clock because we’re going
23 to immediately at that time bring the jury back in,
24 and I don’t want to hold up the jury’s consideration.
25 We’ll be in recess.