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Rambus Inc. Message Board

  • jjr66jjr jjr66jjr Apr 6, 2003 10:42 AM Flag

    Letter to John Wilke WSJ

    Dear Mr. Wilke,

    I am writing to express a deep concern regarding the above-captioned matter. As a matter of disclosure, I am a current shareholder of Rambus having purchased 35,000 shares between 1999 and 2003.

    Recently, as you may be aware, the FTC undertook an investigation of Rambus, alleging that it committed fraud in its dealing with the JEDEC memory industry standards committee and that memory makers and their consumers have been harmed by Rambus� actions. The argument specifically alleges that Rambus violated JEDEC patent disclosure requirements to the committee and that it illegally amended its patents based on information it learned from JEDEC. By extension, therefore, the FTC also argues that Rambus is now unlawfully seeking royalties from makers of SDRAM and DDR memory.

    The memory makers at odds with Rambus, and believed to be behind this FTC investigation are Infineon, Hynix, and a company I know that Congressman Butch Otter follows, closely, Micron Technology.

    Without belaboring the details and allegations of the FTC argument, I am not sure that you are aware that the Court of Appeals of the Federal Circuit just ruled on the appeal of a case between Rambus and Infineon in Virginia. It was found by the appeals court, and specifically Judge Rader, who is the preeminent patent jurist in the country, that Rambus did not violate any JEDEC disclosure requirements, did not commit fraud, and did not unlawfully amend its patents. These issues are essentially the same as those at hand in the FTC complaint against Rambus. It is also at the core of litigation between Micron and Rambus. On Friday, April 3, 2003, the entire CAFC panel of judges denied an en-nanc rehearing that Infineon had requested. THe only other avenue now is for Infineon to appeal to the Supreme Court of the United States.

    The foregoing appellate decision essentially destroys the FTC complaint against Rambus, particularly when you consider that a Rambus appeal of any potential adverse FTC decision would be heard by the same federal court that just issued the decision in favor of Rambus in the matter against Infineon.

    While it would be troubling to me that the FTC matter might continue further in the face of this appellate decision (I am hopeful that the FTC and Rambus are in confidential talks to dismiss this action), the more potentially troubling matter is the link between :

    (i) Congressman Butch Otter,

    (ii) Butch Otter's seat on the House Subcommittee on Commerce, Trade, and Consumer Protection of the House Committee on Energy and Commerce which oversees the FTC,

    (iii) the several hundred thousand dollars in contributions that Butch Otter has taken from J.R. Simplot, the multimillionaire who founded Micron (a litigant against Rambus),

    (iv) Butch Otters marriage with Gay Simplot, daughter of J.R. Simplot,

    (v) Butch Otter's considerable stock investments in Micron,

    (vi) Butch Otter'sr former membership on the Board of Directors of the J.R. Simplot Company, and other affiliations with Simplot Livestock and Simplot International.

    I, of course, would not suggest that anything Butch Otter may have done with respect to the FTC action against Rambus is improper, unethical or unlawful.

    I do think, however, that Butch Otter's position of control with respect to the FTC, his current association with Micron, and the FTC�s pursuit of Rambus would lead certain people (including shareholders of Rambus, certain of his constituents, other lawmakers, and certain authorities) - who are skeptical about the over- zealous pursuit of small players by a big government agency - to certain conclusions worthy of further investigation.

    At the very least, someone might argue there is a substantial conflict of interest with Congressman Butch Otter and those close to him being a beneficiary to any harmful action by the FTC against Rambus.

    Thank you in ad

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    • I am starting to rest easy that the legal risk of this stock is "over just not over with" (to borrow a line from Long and Leaping).

      To the engineers out there: Does anyone forsee a competitive technology that could suddenly (in the next 2-3 years) circumvent or diminish our lock in the memory interface market. Someone recently was trying to argue with me that tech changes so fast, by 2005 (when Hager predicts $6/share eps) someone might come out with a better technology.

      To me, the only risk specific to Rambus is the technological risk, and I don't see how this is much of a factor in the next several years.


    • jjr66jjr:

      I flattered you copied my letter nearly word for word.

    • great letter!very enlighting hope everybody concerned reads definitly sounds like a conflict of would be hard to believe that he could serve on any commitee deaing with this subject

    • Nice letter jjr66jj. Please let us know if you get a response.

    • I think that harping on Rep. Otter is a bad approach, since he is several steps removed from this case. There are far more glaring conflicts wrt the FTC:

      Access, Political Influence, and Conflicts of Interest

      When comparing the FTC's administrative complaint ( against the accusations made in the private litigation cases, there can be no doubt there was extensive cooperation between the FTC lawyers (Complaint Counsel) and counsel representing Micron, Infineon, and Hynix.

      Micron Technology has hired ex-FTC lawyers employed by Arnold and Porter to assist them in their litigation efforts against Rambus. In particular, William Baer (ex-Director of the FTC's Bureau of Competition for five years) and Micron's lead counsel Richard Rosen (ex-Assistant Director of the FTC's Bureau of Competition). Both of these lawyers currently work for the law firm of Arnold & Porter. When looking into this law firm, one discovers that they actively promote the fact they have "deep ties" to governmental agencies (

      For instance, current Arnold and Porter attorney and former FTC chairman, Robert Pitofsky, left the FTC in June of 2001; he served with current FTC commissioners Sheila F. Anthony, Mozelle W. Thompson, Orson Swindle and Thomas B. Leary, all of whom voted for the FTC action against RMBS. Barely a year after his departure from the FTC, Mr. Pitofsky is representing a law firm that has as a client Micron Technology, a company embroiled in patent litigation with Rambus, and not above greasing the skids of the political system to further their agenda. The potential for conflict of interest and the appearance of same is so great as to challenge reality.


    • jjr66jjr-

    • I copied the letter from a template written earlier and posted on this board, I cannot take credit for the letter. I edited and added the recent enbanc ruling. I cannot recall whom the original author was, maybe L&L. I posted to all my senators and congressmen. I suggest everyone do the same!

    • Thanks jjr666jjr.

      Nicely written.

      • 1 Reply to Tandem_Guru
      • Write to John R. Wilke at

        Dear Mr. Wilke,

        I enjoyed your article in the Wallstreet Journal regarding Muris the head of the FTC. Forgive me for being so bold as to suggest that you consider another article regarding the FTC. Please allow me to explain.

        The FTC is currently taking action against a small intellectual property company called Rambus, of which I am an investor. I am aware that being an investor would make me more than a bit biased, however I believe that the facts in the case are exceptional, and perhaps historical in a business sense.

        Independant of my desire for Rambus to 'win' against the FTC (if that is even possible), what strikes me as unusual in the case is that a Federal Appeals Court (CAFC is one step below Supreme Court) has recently ruled in Rambus' favor on the identical issues being argued in the FTC against Rambus. The FTC has chosen to completely ignore the rulings of the CAFC's case of Rambus vs. Infineon.

        Also important to the case and perhaps what concerns the FTC most is the Rambus business model and the issues it raises for the business world. Being an IP company, Rambus designs and invents (but does not manufacture) highspeed interfaces. And for the use of it's patented designs, Rambus licenses and charges royalties and fees to companies such as Intel and Sony, who incorporate Rambus' IP in their product lines. What is unique is that as a pure IP company, Rambus is one of only a handful of successful start-up tech companies with this business model. The key to Rambus' success is due to the fact that it makes no products allowing Rambus to assign fees & royalties without the burden of cross-licensing requirements. Since there really is no limit to what Rambus can charge for access to it's patents (other than market conditions), it certainly presents a challenge to companies which need Rambus designs, but could potentially be blocked from them if Rambus were to deny a license. Perhaps the true goal of the FTC is to put some limits on this new IP business model type, and use Rambus as the precident. Time will tell.

        I believe Rambus is a 'test case' for the business world in that it will likely become the first of it's kind to become both sustainable as a business as well as exceptionally profitable. I will not bore you with further details, but there is much more to the incredible story behind the FTC's action against Rambus. Thanks again for your efforts, and look forward to your future writings.


    • Get the letters stareted to this guy at the Wall Street Journal. WE may have our reporter at hand that is looking for a story.

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