Wednesday, December 17, 2008

Donkey's mail bag

Authored by: John Danforth on Wednesday, December 17 2008 @ 12:28 PM PST

Dear Andy,

 Thank you for taking the time to reply to my posting here.  Yes, there are certainly places where we can agree to disagree.  However, and putting motivations aside (although you are kind to note that the Rambus conduct you attack was before my tenure), I hope you agree there are certain facts to which we can stipulate:

 1.  Your references to “the” trial and its results are references to a 2001 EDVA trial that was reversed by the CAFC in 2002.  

 2.  That 2001 trial, among other things, included a refusal to give a Kingsdown instruction – an instruction that (a) recognized settled law that it is legal to amend patent applications to cover competing products, and (b) that the EDVA trial judge said, if given to the jury, would have resulted in a verdict for Rambus.

 3.  “The” trial to which you refer also included assertions that Rambus stole from JEDEC (essentially turning reality on its head).  That trial was also predicated on very broad assertions about the broad scope and binding effect of JEDEC “IPR” (intellectual property rights) disclosure rules.  On appeal, those JEDEC disclosure rules were severely criticized by the CAFC.  The CAFC concluded that they suffered from a “staggering lack of defining details,” failing to specify, for example, what or when to disclose.  The CAFC further cautioned that “when direct competitors participate in an open standards committee, their work necessitates a written patent policy with clear guidance on the committee’s intellectual property position.”

 It was years ago, and I may be wrong, but I seem to recall that you essentially agreed with the CAFC’s conclusions.  I have in mind a 2002 blog posting of yours (or perhaps it was a client newsletter, I forget which).   I think I recall your urging SSOs (commendably, I think) to review and revise their IPR rules to avoid similar problems.

 4.  Subsequent to “the” trial on which you still hope to rely, there has been considerable additional discovery and two other much longer, much more detailed trials about Rambus’ conduct at JEDEC.  One was four month trial in 2003 in the FTC conducted by its Chief ALJ.  A second was a lengthy jury trial this year in the Northern District of California. 

 5.  Both of these subsequent trials soundly rejected all of the JEDEC-related claims you continue to endorse.  The DC Circuit and the DC Circuit En Banc have now agreed, also rejecting these JEDEC-related claims (with the DC Circuit saying that they rely on an “aggressive use of weak evidence”).

 5.  Subsequent to 2001 there has been very substantial additional discovery – much of which was reflected in these 2003 and 2008 trials.  It includes substantial evidence that JEDEC and its members knew they were “taking” the work of Rambus and issuing that work as their own standards.  It also shows that JEDEC discussed (and researched) the IP risks they were taking (including by undertaking substantial prior art research to block the Rambus patents they feared were coming). 

 There is more in the record to which I hope you would stipulate, but I want to turn as well to the Senate Judiciary Committee members whom you characterize as “courted by lobbyists, who doubtless know little or nothing about standards development.” 

 Please read (or re-read) the Senate letter to which I provided a link.  It purports to say nothing about standards development.  It speaks volumes, however, about growing concerns about the FTC.  That letter adopts a harsh tone.  Between the lines (and not so subtly) it reflects troubling facts that the FTC (1) acts as prosecutor, judge, jury and appellate court in its antitrust enforcement cases, and (2) has institutional conflicts of interest (doctrinally, and in terms of the scope of its mission and budget and expenditures) in those cases.  Add to this the fact that the FTC, at the commission level, appears to have managed things so that (in 25 years) it never loses and I think you should agree that this is not a system of adjudication that ought to continue in this way.  Rambus is just one example of how it has failed us. The Senate letter I urge you to read seems to suggest that many now recognize this. 

 Very truly yours,

 John Danforth (former Rambus GC, writing now only on my own behalf)


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