In 2010,The IP Observers commented on a successful day for Rambus, the microchip technology company, when they settled with Korean giant Samsung for close to $1B to resolve a range of disputes between the companies. As widely reported*, in November 2011 Rambus lost a jury trial at the San Francisco based California Superior Court, having sued chip makers Hynix and Micron in a multi-billion dollar law suit where Rambus had alleged an “unlawful conspiracy” by Hynix and Micron to suppress Rambus’s technology.Rambus’s business is built around its microchip technology, so getting people to take up its technology and the licensing revenues which follow are they way it makes money. In an industry like the microchip business where large numbers of chips are made to the same design or technical standard, owning the technology behind a popular chip design can be a money spinner. Rambus clearly felt that the commercial struggle for that favoured market postion was tainted but failed to convince the California jury.
Billion dollar settlements, and billion dollar law suits won or lost are going to attract media headlines and comment. Big numbers are always a draw; big pay days always welcome, as long as you are on the receiving end. If you are not winning you can expect the kind of fall in stock price that Rambus found, with their stock price pretty much halving after the court verdict.
There is something rather addictive for companiesabout winning big in IP battles, though there is no suggestion that this applies to Rambus. When a company does have big win, the cash that flows in pretty much all goes to the bottom line of the company as profit. Company management can find this sort of big win intoxicating. A combination of adrenalin rush, exhilaration, and a champagne high, with more money in the bank in the morning. Highs don’t last of course, so there is always, and soon, a desire for another win, and a big win too.
At the end of the day, received wisdom has it that IP litigation is all swings and roundabouts. Not so much, some you win, some you lose, but more a draw even before you start. Clearly, you need optimism to pushed ahead with a law suit large or small, but looking at the overall outcomes for all parties, if you are ahead at any time, enjoy it while it lasts, it seems only a temporary statistical anomaly, unless of course you are on a winning streak.
