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ITC Judge Rules Against nVidia in Rambus Suit

An Administrative Law Judge (ALJ) with the U.S. International Trade Commission (ITC) has issued a preliminary ruling in favor of Rambus against graphics vendor nVidia in three of five patent infringement allegations. Two allegations were declared invalid and unenforceable.

In the end, nVidia (NASDAQ: NVDA) seemed happier with the outcome than Rambus (NASDAQ: RMBS). "We are pleased with the initial determination from the ITC finding two patents invalid but disappointed about its ruling on the other three patents," said David Shannon, nVidia's executive vice president and general counsel in a statement.

"All five of the patents continue to be subject to reexamination proceedings in the Patent and Trademark Office, in which the Office has consistently found the asserted claims of all of these patents to be invalid. We will now take the patents before the full commission for a full review of the initial determination announced today," Shannon added.

As for Rambus: "Following an extensive hearing process, we are pleased with the ALJ's determination that three of our patents are valid and infringed," said Tom Lavelle, senior vice president and general counsel at Rambus in a statement.

"We are obviously disappointed with the result for the other asserted patents and intend to request the Commission's review of the corresponding portions of the Initial Determination. We will continue to vigorously protect our patented inventions for the benefit of our shareholders and in fairness to our paying licensees."

Rambus accused nVidia and its partners of infringement of seventeen patents in November 2008. Six of these patents are set to expire early this year. The USPTO initially rejected 41 claims in seven patents by Rambus in June 2009 and another eight claims and two patents in July. Another 17 claims and three patents were rejected in November, but that leaves eight claims from two more patents that are being considered by the USPTO.

Investigations continue

Under the initial determination, nVidia and other respondents are found in violation of Section 337 of the Tariff Act of 1930. The ALJ determined that three of Rambus's patents are valid, enforceable, and infringed by the respondents. Either party can request a full panel review of the initial determination, which nVidia is doing.

A spokesperson for nVidia said the issue is "far from over." This is the initial determination, while a final determination is due around the end of May. Then there is a full commission review later in the year. Also, the USPTO is running a separate investigation of its own to address the validity of the patents.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.