RMBS info
By Fred Hager
February 13, 2003
There are many reasons why I think a settlement is imminent. I studied an
extensive analysis of the implications of the recent CAFC decision in the
Rambus case by Calbert Crary an Attorney and friend of mine who makes his
living writing reports about patent litigation. His reports are for
institutional investors. His telephone number is 203-226-2888.
The Federal appeals court decision changed the ball game and here is why:
the lengthy, detailed, and well reasoned decision of judges Rader and
Bryson will force the Virginia court to find Rambus' patents have been
infringed. There may not even be a trial, but a summary judgment because
there is no genuine issue of material fact that remains to be decided in a
trial.
The Federal trade commission's case against Rambus has been tremendously
weakened by the Appeals Courts (CAFC) decision. Given the political
influence that Micron's attorneys, who were former Federal Trade Commission
officials, have demonstrated to wield, the FTC may continue the case
against Rambus. If Rambus loses, Rambus will appeal the decision and it
would then be out of the hands of the FTC. However the FTC will most
likely drop their case earlier.
The three litigants will now probably begin losing market share to
companies that have licenses with Rambus. After the Court of Appeals for
the Federal Circuit (CAFC) decision, those that continue to manufacture
products covered by a Rambus patent are willfully and knowingly infringing,
and so are those who buy from these manufacturers. With treble damages
applicable, this is a dangerous and very costly game.
An additional catalyst to settlement is the fact that Rambus is in a strong
position to demand a large lump sum payment for back royalties and higher
royalty rates than what they had originally asked for before the
litigation. If the three litigants settle now, Rambus may be more
interested in ongoing royalties than in getting a huge payment up front.
Big one-time payments don't do anything for their stock, however ongoing
royalty will.
What could also be important, if as part of a settlement, any of the three
litigants provides evidence to the FTC, that the memory manufacturers could
neither find, nor develop alternative technologies to Rambus', that JEDEC
could have used. This would of course remove the Federal Trade Commission's
argument that, if Rambus had not tricked JEDEC, JEDEC would have used
alternative technologies.
We have learned that Infineon asked for and was granted an extension of
time to request an en banc review by the CAFC (Court of Appeals). The new
deadline to ask for a review is February 26, 2003. The likelihood of an en
banc rehearing is low, according to Calvert Crary, the litigation analyst.
Geoff Tate, the CEO of Rambus, reportedly sold about 100,000 shares the
first week of this February. According to "Rambus Notice of Annual Meeting
of Stockholders To Be Held On January 30, 2003", Geoff Tate owned 4,335,122
shares. So Geoff Tate still has 4,235,122 shares left after this sale. If
he sold 5% of his remaining stock every year until 2012, he would still
have over 2.7 million shares. The balance would be worth over one billion
dollars if the stock were only $400 per share. By the way, Bill Gates sold
an average of about 100 million dollars worth of Microsoft stock every
month for as long as I can remember.
Hager Technology Research Team
Market Data 
Markets 
AI
