Rambus a Big Winner in Chip Patent Case
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SAN FRANCISCO -- Memory chip technology developer Rambus Inc (NASDAQ:RMBS) said on
Wednesday a U.S. jury ruled it was not anti-competitive and did not not violate antitrust laws or commit fraud in its attempt to protect memory chip patents, sending Rambus shares higher 39 percent.
The verdict in the long-running case was that there was no anti-competitive behavior by Rambus in its activities with a memory chip industry standards body, Rambus General Counsel Tom Lavelle said by telephone.
"This was an important one for us," Lavelle said, adding that it marks a first step toward Los Altos, California-based Rambus collecting royalties from other memory chip makers.
Micron said it planned to appeal the verdict.
Rambus shares jumped $7.25, or 39 percent, to close at $25.86 in Nasdaq trading. Options of the company were also actively traded throughout the day as investors speculated that Rambus would prevail.
At issue is whether the developer of a speedy new memory technology deserved to be paid for its inventions or whether the company misled memory chip makers.
Opposing Rambus in the suit are three large memory-chip makers, Hynix Semiconductor, Micron Technology (NYSE:MU) and Nanya Technology. They claimed Rambus deliberately misled the memory chip industry in the 1990s when new standards were being hammered out.
They claim Rambus failed to disclose it was seeking patents on the technology that was then being worked into standards for chip production.
"I think they (the jurors) misapprehended what the standards-setting organizations are about and the absolute need for good faith," said Jared Bobrow, an outside attorney for Micron.
Damages had yet to be determined. Wednesday's verdict comes after a judgment against Hynix in 2006 that resulted in a $133 million award to Rambus, Lavelle said.
"At this point, that figure will go up," Lavelle said, because he said Hynix has continued to ship products that infringe Rambus patents.
Rambus has said that memory chip makers on the Joint Electron Device Engineering Council standards body knew about Rambus' technology and designed them into their chips.
"Their attempts to invalidate our patents and find us violative of fraud laws and monopoly laws of the United States have failed," Lavelle said on Wednesday.
Analysts have estimated that Rambus could eventually collect royalties of hundreds of millions to billions of dollars over the next decade.
Wednesday's verdict is but one phase in a number of pending cases between Rambus, Micron and others, Micron said.