Third, Most Important Rambus Patent Invalidated; Company Share Price Craters

The United States Patent and Trademark Office (USPTO) has released a ruling that invalidates the third of three patents Rambus used to intimidate Nvidia into settling with it early last year. The decision is a further blow to Rambus' ambitions; the company has sued a wide range of companies, including HP, Broadcom, MediaTek, and STMicroelectronics alleging that they infringed on the three patents.  

The 6,591,353 patent, "Protocol for Communication with Dynamic Memory," was overturned on the basis of prior art. It makes numerous references to a 'memory device'; a fact Nvidia was able to exploit. The patent examiner reported that "As NVIDIA persuasively explains, Hayes describes time-multiplexed clock data transfers between a master and slave during different clock cycles, and Bennett teaches benefits to providing a synchronized interface in a memory device using an external clock."

In other words, Bennett (the patent Nvidia declared constituted prior art) contained information that made the Hayes patent obvious. The question of "obviousness" is a key component of patent law; the USPTO evaluates the issue using what's known as the Teaching-Suggestion-Motivation (TSM) test. In this case, the patent office found that information contained within the original Bennett patent made the Hayes patent obvious.

This decision is the latest blow to Rambus' ambitions; the company's $4 billion lawsuit against Hynix and Micron was tossed out of court in November. That decision wiped out nearly 2/3 of the company's value; this further announcement has sent shares plunging once again.

Rambus, of course, has a well-deserved reputation not as a patent troll, but as the patent troll; the company has prioritized litigation as a means of earning income for more than a decade. A quick check of the company's stock price shows how well that's worked for them long-term.

Rambus' share price across both the last ten years (above) and the last month (below). Charts generated by YCharts

Not only has the company's share price fluctuated and dipped precisely in time with the outcome of its patent lawsuits, its 10-year share price is essentially flat ($7.46 in 2002, $7.97 at close of market on Friday). Granted, Rambus is scarcely the only company whose shares are worth less now than they were 10 years ago -- it shares that distinction with Microsoft, to name one example. The difference, however, is that Microsoft has spent the last ten years designing new products and attempting to move into new markets. Rambus, in contrast, has generally relied on licensing agreements -- negotiated either politely, or from the barrel of a gun.

The company has made some effort to create new product strategies, such as partnering with GE around LED lighting, but this latest decision undermines a great deal of the company's lawsuits and may invalidate the agreements it has signed with companies like Nvidia and Broadcom. After spending a decade suing virtually everyone, Rambus may have real problems finding partners for itself in its traditional markets.
Via:  ReadWriteWeb
LLeCompte 2 years ago

Looks like patient troll just got shut down. Awesome, another troll has been laid to rest.

dangerrenegade 2 years ago

Maybe they should put resources into new technology, instead of troll technology.

realneil 2 years ago

They'll most likely wither and die, kicking feebly and gasping for a modicum of breathable air,...........or not.

OSunday 2 years ago

The legal system in America needed to do something about the ridiculous patent system that has been stifling innovation and this is one step in the right direction and one step closer to a system that protects creative ideas rather than prevent the fostering of them

Hopefully renown patent trolls like Rambus will go down like realneil describes

omegadoom13 2 years ago

Patent lawyers must love suckling on Rambus' tit. :) The one positive that I can glean from this is that the share price fluctuates a lot and it may very well depending on outcomes relating to patent lawsuits. This makes the stock dangerous as a long term investment, but possibly profitable in short-term trades.

RTietjens 2 years ago

SCO, RAMBUS... Who's next? Come on, surely we don't lack for patent trolls?

OMEGADraco 2 years ago

*Cough Apple *Cough...

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