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“Get Rich, or Die Trying”: Lessons from Rambus' High‐Risk Predatory Litigation in the Semiconductor Industry

2005; Taylor & Francis; Volume: 12; Issue: 1 Linguagem: Inglês

10.1080/1366271042000339076

1469-8390

Richard Tansey, Mark Neal, Ray Carroll,

Corporate Insolvency and Governance

Abstract Patent litigation is a visible and widespread feature of the semiconductor industry, as firms pursue judicial mechanisms to defend, or promote, their intellectual property portfolios. This study highlights the antecedents, strategic goals, tactics and outcomes of the most significant US trial of this type in the last decade, namely Rambus v. Infineon, whereby a smaller company (Rambus) successfully pursued a "do or die" litigation campaign against a larger rival, thus changing the rules of engagement for the semiconductor industry as a whole. This campaign is notable, not just because of its undoubted effects on the semiconductor industry, but because of the innovative nature of Rambus' strategy, which was extremely risky both in terms of its prospects of success and its potential damage to the company if it failed. Arguing that dominant logic and operating rules are important antecedents in the development and pursuit of patent litigation strategies, this paper analyses the Rambus case using a "dominant logic" and "effectuation" framework. Doing so demonstrates the innovative nature of Rambus' "high‐risk predatory strategy", the outcome of a dominant logic sustained by effectuation principles. The paper discusses the impact and significance of this new strategic form. Keywords: Patent litigationRambussemiconductor industry Notes Rambus Dynamic Random Access Memory. JEDEC Solid State Technology Association was formerly known as the Joint Electronic Device Engineering Council. Founded in 1960, it has grown to become the most important standardizing trade council for the semiconductor industry. Synchronous Dynamic Random Access Memory. Double Data Rate. Bus: a set of wires that allows communication between the main microprocessor and memory, i.e. addressing or instructions. In the Rambus v. Infineon case, Judge Robert Payne ruled that Infineon did not infringe Rambus' memory patents because Infineon used an ordinary bus in its SDRAM and DDR DRAM memory devices. He ruled that the term "bus" in Rambus' patent referred to a multiplexed bus.