EDA News (& Monday March 8, 2004 From: EDACafe ÿÿ Previous Issues _____ http://www.mentor.com/fpga/ _____ About This Issue (& Conflict of Interests - Semiconductor IP Patent Rights vs Standards A Quick Visit to DVCon 2004 _____ March 1-5, 2004 By Dr. Jack Horgan Read business product alliance news and analysis of weekly happenings _____ ADVERTISEMENT http://www.mentor.com/events/ Rambus, Inc announced on February 17th that the anti-trust suit brought by the Federal Trade Commission (FTC) against the company has been dismissed in its entirety. "Today's ruling dismissing the FTC case is a fundamentally important step for Rambus as we seek to be fairly compensated for the use of our intellectual property," said John Danforth, senior vice president and general counsel for Rambus. "The ruling adds to the powerful reasoning favoring Rambus that the Federal Circuit issued in January 2003. It is now time, we believe, for these issues to be set aside, and for Rambus patent claims to be resolved on their merits." This case is important and intriguing because it involves both patent rights and a standards making organization. A public version of the court's initial decision was released on February 24th. On March 5 the FTC announced an intention to appeal the decision. A brief synopsis of the case follows: Rambus has certain patents related to synchronous dynamic random access memory (SDRAM). Rambus entered into license agreements with several major DRAM manufacturers under which Rambus is entitled to collect royalties in the range of $50 to $100 million per year. Some memory manufacturers (Infineon Technologies, Hynix Semiconductor, Inc and Micron Technology, Inc) have opposed Rambus's royalty demands, choosing instead to dispute Rambus's patent rights in litigation. On June 19, 2002 the FTC charged Rambus with violating federal antitrust laws in particular by deceiving industry-wide standard-setting organization, namely the JEDEC Solid State Technology Association. JEDEC has maintained a commitment and has implemented procedures to avoid, where possible, the incorporation of patented technologies into its published standards, or at a minimum to ensure that such technologies, if incorporated, will be available to be licensed on royalty-free or otherwise reasonable and non-discriminatory terms. According to the FTC's complaint, Rambus participated in JEDEC's SDRAM-related work for more than four years without ever making it known to JEDEC or its members that Rambus was actively working to develop, and did in fact possess, a patent and several pending patent applications that involved specific technologies proposed for, and ultimately adopted in, the relevant standards. The judge ruled that Complaint Counsel failed to prove the facts they alleged in the complaint and that the legal theories advanced by Compliant Counsel failed to demonstrate that a violation of the FTC Act had occurred. The legal issues are quite complicated. Trials and appeals are still ongoing. There is no way of knowing what the final outcome will be and when it will be known. Before examining the implications of the ruling, let us review some material on patents and standard making organizations. Patents A patent is a property right granted by the U.S. Government to an inventor "to exclude others from making, using, offering for sale, or selling the invention throughout the U.S. or importing the invention into the U.S." for a limited time in exchange for public disclosure of the invention when the patent is granted. Patent rights date back to the U.S. Constitution Article 1, Section 8, Clause 8 to wit: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;" The first patent was granted in 1790. According to the USPTO, United States Patent and Trademark Office, the number of patent applications (355,418) and approvals (189,597) have more than tripled in the last twenty years. In the case of utility patents, the application must include a detailed and complete description of the invention such that that any person skilled in the technological area will be able to make and use the invention. The application also includes a set of claims, which precisely define what the proposed patent will and will not cover- the scope of the protection. The claimed invention must be new, useful and non-obvious when measured against all previous inventions, referred to as "prior art". Under U.S. law, a patent must be applied for within one year of the first offer for sale, public use or publication of the invention. The term of a U.S. utility patent is 20 years from the date on which the application for patent was filed. Patents enable the originator of an idea to attract capital, to recover the investment (time, talent, labor, money) in developing the idea and to earn reasonable compensation for its use by others. Trademarks, copyrights, employment agreements and so forth also provide protection. Without having to make comparable investments, others could simply copy ("free ride" on) the invention and sell it at a much lower price. AutoDesk CEO Carol Bartz testified before Joint Congressional Joint Economic Committee on the opportunities and risks of the "new economy". She warned of the dangers of Internet software theft and other cyber-crimes. She characterized the Internet as the "Home Shoplifting Network". She reported that CDs of AutoDesk software, valued at $9K, could be purchased in open air markets for $2. The Semiconductor Chip Protection Act of 1984 (the "SCPA") provides a special form of protection for "mask works fixed in a semiconductor chip product". The SCPA protects three-dimensional images or patterns fixed in the semiconductor product so long as the "topography" of the chip is not singularly dictated by the electronic function of the chip, nor one of only a small number of possible design choices. Protection does not extend to an idea or concept, process, or system behind the semiconductor product. It is important to understand that the SCPA does not provide as broad protection as the patent laws do. Certain activities by competitors are permitted, such as reverse engineering for the purposes of teaching, analyzing, or evaluating the concepts embodied in the mask work including the circuitry, logic flow, and organization of components. The results of legitimate reverse engineering may be incorporated into another original mask work and commercially exploited. Many have raised concerns regarding current patent law and USPTO practices and policies. For example, patent examiners have insufficient breath and depth of knowledge and insufficient time and resources to exhaustively investigate all prior art. They rely on the information provided by the applicant plus a search of the patent database. A patent once approved is assumed valid. It takes a considerable amount of time and money to contest a patent. Many simply pay license fees as a shorter, less costly and less risky alternative. From February through November 2002 the FTC and Department of Justice (DOJ) held hearings to examine the Balance of Competition and Patent Law and Policy. They observed that poor patent quality and legal standards and procedures that inadvertently may have anticompetitive effects can cause unwarranted market power and can unjustifiably increase costs. Such effects can hamper competition that otherwise would stimulate innovation. In its Executive Summary the FTC/DOJ cited testimony that "In some industries, such as computer hardware and software, firms can require access to dozens, hundreds, or even thousands of patents to produce just one commercial product. One industry representative from a computer hardware firm reported that more than "90,000 patents generally related to microprocessors are held by more than 10,000 parties." Many of these patents overlap, with each patent blocking several others. This tends to create a "patent thicket" - that is, a "dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology." Much of this thicket of overlapping patent rights results from the nature of the technology; computer hardware and software contain an incredibly large number of incremental innovations. Moreover, as more and more patents issue on incremental inventions, firms seek more and more patents to have enough bargaining chips to obtain access to others' overlapping patents. One panelist asserted that the time and money his software company spends on creating and filing these so-called defensive patents, which "have no . . . innovative value in and of themselves," could have been better spent on developing new technologies" Recommendations from FTC/DOJ to Congress and the USPTO included: - Create a new administrative procedure to allow post-grant review and opposition to patents - Specify that challenges to the validity of a patent are to be determined based upon "preponderance of the evidence" rather than on "clear and convincing evidence" of invalidity. - Require publication of all patent applications 18 months after filing. - Tighten certain legal standards used to evaluate whether a patent is "obvious." - Provide adequate funding for the PTO. - Consider possible harm to competition - along with other possible benefits and costs - before extending the scope of patentable subject matter. Separately the USPTO has adopted a comprehensive five-year 21st Century Strategic Plan. The plan's three main objectives: (1) to make the application process simpler, faster, and more efficient; (2) to be more responsive to the needs of our customers and to the demands of the national and global marketplaces; and (3) to be more productive. Standards and Standard Making Organizations The mathematics of the benefits of standards is straightforward. If N entities each with a proprietary interface seek to interface to each other, then each must develop and maintain N-1 converters, translators or direct links. When there is a standard, only one is required. The numbers double, if the interface is bi-directional. The issuance of a standard in a new area can be a tipping point. The ability to develop follow-on and complementary products and services becomes far less costly and risky. The market opportunity expands dramatically. De jure standards are based upon the sanctions from an authority, e.g. government agency, industry group, or consortium. These authorities seek to avoid or to at least minimize the incorporation of materials into standards where someone has essential rights. Corporations frequently donated intellectual property, money and technical resources to organizations that develop and promulgate standards. They often form alliance even with competitors to promote adoption of one technology over another. These efforts are not entirely altruistic. Firms stand to gain if they are able to influence the direction, content or timing of a standard which is more aligned with their own products and technologies. Founded in 1916 the American National Standards Institute (ANSI) is a private, non-profit organization that administers and coordinates the U.S. voluntary standardization and conformity assessment system. ANSI facilitates the development of American National Standards (ANS) by accrediting the procedures of standards developing organizations (SDOs). These groups work cooperatively to develop voluntary national consensus standards while meeting the Institute's essential requirements for openness, balance, consensus and due process. At year-end 2003, about 200 of these standards developers were accredited by ANSI; there were more than 10,000 American National Standards (ANS). Among the SDOs are IEEE and EIA (Electronic Industries Alliance). Back to the Rambus Case The Rambus case involved as an SDO JEDEC, the semiconductor engineering standardization body of the Electronic Industries Alliance (EIA), a trade association that represents all areas of the electronics industry. Like other SDOs JEDEC has published policy and practice guidelines related to patent. "JEDEC standards and nonproduct registrations (e.g., package outline drawings) that require the use of patented items should be considered with great care. (For the purpose of this policy, the term "patented items" includes items and processes for which a patent has been applied.) While there is no restriction against drafting a proposed standard in terms that include the use of a patented item if technical reasons justify the inclusion, committees should avoid standardization that refers to a product on which there is a known patent unless all the relevant technical information covered by the patent is known to the formulating committee, subcommittee, or task group. If the committee member indicates that the standard requires the use of patented items, then the committee chairperson must receive a written assurance from the organization holding rights to such patents that a license will be made available to applicants desiring to implement the standard either without compensation or under reasonable terms and conditions that are demonstrably free of any unfair discrimination. Additionally, when a known patent item is referred to in a JEDEC standard, a cautionary note, as outlined in this document, shall appear in the JEDEC standard." The judge's 348 page ruling was divided into three sections: Introduction, Findings of Fact, and Analysis and Conclusions of Law. The facts in the cases included the history of Rambus, history of JADEC, Rambus involvement with JEDEC, Rambus patent related activities and so forth. These facts had a significant bearing on the decision but may not be relevant in future cases. The area of controversy is the JEDEC guidelines related to patents. The judge found that there was confusion among the members on the meaning of the policies and that there were inconsistencies in enforcement. In particular there were questions whether the duty to disclose was voluntary or mandatory, whether the duty included pending patents, intention to file patents and patents filed after the standard was approved as well as existing patents, whether the disclosure duty was limited to the knowledge of the representative and so forth. The IBM representative (Chairman of the committee) and the HP representative clearly stated that they would not disclose company information related to patents. Among the reasons given was the burden of the search every time a new topic came up and the possibility that any list would be construed as complete. SDOs will likely want to study the decision to see if it makes sense to modify their guidelines related to patents. SDOs do not have the power to invalidate a patent but they can rescind and modify a standard. If an SDO were to make it a condition of participation that firms would give up their patent rights, then firms with large patent portfolios might choose not to participate. JEDEC has no comment on the matter, while ANSI only said that they periodically review their patent policy. There are two other infringement cases in the news recently that involve standards or open source organizations. In January a judge upheld a $520 million verdict for Eolas Technologies against Microsoft related to its browser. In March the SCO Group sued IBM for misappropriating some of its UNIX code and putting it into Linux . This week SCO sued end users AutoZone and DaimlerChrysler. Both cases could have a significant impact on third party developers and end users. Depending on the final outcome, this could have a chilling effect on future open source endeavors. A Quick Visit to DVCon 2004 By David Heller This year's DVCon in San Jose facilitated by Accellera was a small compact show filled with lots of valuable technical content, good humor, and some boo's and hisses in an overflowing auditorium during the panel discussion. (& Snapshots from DVCon 2004 Read the Technical Papers If you didn't get a chance to be at the show you can read the technical papers here . The Main Event Masterful Master of Ceremonies, John Cooley facilitated a fun-filled and at times illuminating hour-long panel dialog in front of an overflowing audience of more than 300 people. There was only seating for 200; so another 100 flowed around the sides and back of the small room. With the seven panelists buckled in, John took charge and off we went. The panelists included Brett Cline, VP of Forte Design Systems, Mentor Graphics CEO Wally Rhines, Synplicity CEO Bernie Aronson, Cadence CEO Ray Bingham, Bernie Aronson CEO of Synplicity, Magama Design Automation CEO Rajeev Madhaven, and Gabe Moretti from EDN Magazine. John's offensive began when he 'innocently' asked Brett if there was any reason for SystemC now that SystemVerilog has become the leading system design language. Brett quickly pulled out some slides, rushed to the slide podium and presented his case. Well, not exactly. He presented a slide with a question that a visitor to www.deepchip.com --- John's site - submitted: "Hey Brett, it looks like Ray's water is getting a little low, would you mind refilling it? And why don't you fetch some doughnuts while you're at it." Brett then scurried back to his place next to Ray, filled his glass to the brim, and when asked about the doughnuts by John, produced these from under the table. Once the laughter subsided Brett went on to tell of the many designs now being done using SystemC, and the conversation flowed into a discussion that concluded that most all the EDA tool vendors provide platforms that accept virtually any language that the designer wants to use at the front-end. And, if they don't have it today well, they're working on it. Rajeev said that if customers ask Magma to support SystemVerilog they will, and it won't be a big effort, Ray said that their architecture is open to all languages, and Wally chimed in to say that Mentor is now the only company shipping products in SystemVerilog. Gabe summed it up best when he said that the new revolution is not about the HDLs, but about providing platforms that give engineers choice. Synopsys wasn't represented on the dais, so when John Cooley asked if Synopsys' $430 million MoSys purchase was a smart move, there was no one to explain the Synopsys side of the story. The field was wide open, and Ray said that he wondered about the earn-out plan (ie, how are they going to make this purchase pay off.), and Rejeev felt that with this purchase Synopsys would be competing with their customers. I'm sure we will learn the reasons for this purchase, but I for one felt that it wasn't a fair question since Synopsys wasn't there to rebut. Yes John, it did add drama to the event. The booing and hissing began when John projected a Times magazine cover, 'Off Shore Jobs,' on the screen. Rajeev tried to dispel the 'myth' by saying that the logistics and infrastructure needed to support remote development are costly and it doesn't make shipping jobs off shore an effective thing to do. But, when Ray said that customers are demanding R&D and access capability in their countries to support their local needs, the booing and hissing reached a crescendo. Then, the discussion got sidetracked a bit when John presented a slide showing the number of people who work under H1B visas at the companies represented on the dais. This at first seemed to be a viable attack, but quickly evaporated when Gabe pointed out that the H1B issue is spurious. It was mutually agreed and reinforced by all that it actually costs more to hire a qualified H1B foreign national to work in the States than to hire a U.S. citizen, and the only reason companies do hire H1B employees is because these individuals offer something unique that the company can't get from the local pool. It was a great panel and a great show -- there was electricity in the air charged with energy -- you had to be there to experience it. Make it a point to attend nexxt year's event. The content was exemplary, the panel discussion was exciting, and the contacts you make during the cocktail party can make it truly enjoyable. Some show related links: DVCon 2004 Technical Papers The questions asked at the panel discussion www.DVCon.org www.accellera.org Weekly Industry News Highlights Honeywell and Synopsys will Co-develop Design Flow for Next-Generation Radiation-Hardened Integrated Circuits Magma's Blast Fusion Passes 500 Tape-out Milestone -- Proven Success on Nanometer Design Challenges Novas, Denali Offer First Transaction-Level Verification and Debugging Environment for PCI Express Design Verification Applied Micro Circuits Corporation Announces Agreement to Acquire 3ware, Inc Enhanced Intel Xeon Processor MP Boosts Performance by up to 25 Percent More News ... Industry Semiconductor Sales up 26% Year_Over_Year, January Sales Follow Cyclical Pattern Down 3% from December Upcoming Events... --Contributing Editors can be reached by clicking here . You are registered as: [dolinsky@gsu.by]. CafeNews is a service for EDA professionals. EDACafe respects your online time and Internet privacy. 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