Hynix v Rambus - 10/18/05 - Part IV

I will attempt to accurately reflect the give and take, however, I may unintentionally misquote or mis-summarize, if I do, I apologize . . . to borrow a line from attorney Nissly “I don’t intend to step on your answer.”

Mr. Karp was hired to help manage Rambus IP, in particular, non-compatible licensing. In Rambus jargon, non-compatible IP referred to non-RDRAM or SDRAM, controllers and DDR.

When did Rambus know it was going to litigate to enforce its non-compatible IP? Attorney Nissly attempted to show Judge Whyte that it was early – maybe as early as when Mr. Karp was hired in ’97.

Possible early dates include on or near the commencement of a relationship with attorney Neil Steinberg.

In response to attorney Nissly’s questioning, Mr. Karp agreed that he wanted to bring intellectual property attorney Neil Steinberg in house at Rambus nearly from day one. When asked why, Mr. Karp indicated that he “thought he (Steinberg) was a real good guy.” Attorney Steinberg acted as outside counsel commencing in the summer of ’98 and in house counsel commencing in the spring of ’99.

Another early date includes when attorney Dan Johnson, a well known litigator, was engaged. His name appeared in Mr. Karp’s notes early ’98. I am not certain of the date.

Attorney Nissly queried Mr. Karp at length as to why Dan Johnson and other attorney names appeared in his note binder – think graph paper – and why various documents outlining goals included not only licensing, but litigation? Mr. Karp answered that licensing included a philosophical discussion or awareness that litigation may be required and a “battle readiness” plan.

In early March ’98, Mr. Karp made a presentation to the Rambus Board of Directors concerning a licensing and litigation strategy regarding non-compatible IP. The licensing proposal included a narrow license with a $20M up front fee and 5% running royalties. An alternate licensing proposal included a board license with a $30M up front fee and 5% running royalty.

Mr. Karp agreed that a five percent running royalty rate at Samsung would have been considered high.

The licensing and litigation strategy also included a tiered litigation strategy. One tier was to sue current licensee’s under breach of contract. A second tier was to file patent infringement suits. Alternative venues for any patent infringement suit were listed and included ITC, N. CA and E. VA or “Rocket Docket.”

More to follow . . .