Rambus Inc. probably spends more on lawyers than on engineers, and now that disparity seems likely to grow.
Last week, Rambus was hit by at least 10 stockholder class action suits, by my count. The charges range from alleging that the once high-flying firm misrepresented its revenue potential, to citing the fraud judgment against it by the federal court jury in Richmond, Va. last spring.
Now, generally there are at most a couple of stockholder class action suits against any given company at one time. But the legal floodgates seem to have opened against Rambus. Not entirely surprising, given that the company's stock is trading at around $5, compared to $94 at this time last year.
Time will tell if this is "ambulance chasing" by legal piranhas or whether there are justifiable claims. No doubt in the months ahead we will treated to a rehash of many of the charges against Rambus that have surfaced in the nearly dozen patent infringement law suits between the firm and three DRAM antagonists playing out on two continents.
Indeed, the class action trial lawyers have already descended on Richmond to delve into the mountains of legal minutia dredged up by the Rambus suit against Infineon Technologies.
However, Rambus probably won't have to pay legal costs in every single class action suit filed against it, as some courts routinely consolidate suits into a single case. In fact, the battle among the trial lawyers to survive in any suit consolidation could be more brutal than the proceedings against Rambus.
Rambus, which itself started the legal snowball rolling with its original infringement suits, may come to the same conclusion as Shakespeare on what to do with all the lawyers.