Patent aggression: High risk intellectual property strategies in the semiconductors industry

This article identifies “aggressive patent litigation” as a key strategy in innovative high technology industries. For the purposes of discussion, the analysis focuses upon Rambus, a leading semiconductor (SIP) firm, which has famously pursued aggressive patent litigation since it was founded in 1990, up until the most recent US Supreme Court ruling on Rambus vs. Infineon 2003. The examination of Rambus’ strategy over this period demonstrates that aggressive patent litigation in high-technology industries is often associated with extremely high levels of risk – levels of risk that are either tolerated or unrecognized by the executives of such companies. In terms of corporate ethics such bullishness or ignorance is problematic when one considers that the levels of risk and potential liability are rarely disclosed to stakeholders, particularly shareholders. When it goes wrong, aggressive patent litigation can threaten companies’ finances, their brand and indeed their very existence. It is argued that such risks should be recognized and addressed by corporate lawyers and executives in the formulation of intellectual property strategy, and disclosed to stakeholders in corporate communications and forecasting.