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The Federal Circuit U.S. Court of Appeals has tried to clear up what’s required of companies when they sit on a body that sets standards for a particular industry. In a high-profile case involving a computer memory developer, a three-member appellate panel held that a company need only disclose patents and applications that specifically pertain to the standards being set by the body. The Jan. 29 ruling marked a big victory for Rambus Inc. of Los Altos, California, which has been accused by the Federal Trade Commission of antitrust violations for not revealing all of the patents it held while it sat on a standards-setting body for semiconductor technology. The case sets a new — and somewhat liberal — bar for corporations when they disclose their patents. In an opinion by Judge Randall Rader, the court clarified that a participant in a standards-setting body is required to disclose only claims in patents and applications that “reasonably might be necessary to practice the standard.” Rader concluded that Rambus did so as it sat on the Joint Electron Devices Engineering Council, the organization that develops standards for semiconductor technologies. “This decision will be required reading among standard-setting bodies around the country,” says John Danforth, Rambus’ general counsel. The court’s ruling “endorses a broad reading” of the Rambus patent, he adds. It also frees the company from “a terrible cloud of fraud” relating to its participation on the standards-setting body. The case has been closely watched by those in the technology industry given that several companies have been embroiled in litigation with Rambus. The company does not manufacture its own computer memory devices but develops and licenses technologies to companies that manufacture semiconductor memory. In the case before the Federal Circuit, Rambus had sued Germany’s Infineon Technologies AG and its subsidiaries over patents related to dynamic random access memory (DRAM) technology. Rambus said Infineon had infringed its patents. A Virginia U.S. district court found in Infineon’s favor. But the Federal Circuit ruled that the lower court erred in its interpretation of patent claims. Specifically, it disagreed with the construction of certain terms in the patents such as “integrated circuit device” and “bus.” The court also criticized the standards- setting body for not having clear policies. “In this case there is a staggering lack of defining details in the patent policy,” Rader wrote. “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.” The court reversed a $2.4 million fraud verdict against Rambus and vacated the award of $7 million in attorneys fees to Infineon. Judge Sharon Prost dissented from a portion of the fraud ruling. Prost wrote that “substantial evidence supports the jury’s verdict that Rambus committed actual fraud” under Virginia state law by withholding information when the joint engineering group was setting a standard for certain semiconductor technology. An Infineon spokesman says the company is reviewing the court’s decision and expects to request a rehearing with the Federal Circuit.

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