High Court Denies Infineon Vs. Rambus Appeal

The U.S. Supreme Court Monday denied a final plea by Infineon
Technologies to revive its fraud case against rival Rambus
.

The German-based semiconductor maker originally accused Rambus of
deception while it was working with the JDEEC Solid State Technology
Association — a standards-setting board — to develop DDR
SDRAM memory technology.

The ruling means that Infineon has exhausted all possible avenues of
appeal from the January 29, 2003 ruling of the Court of Appeals for the
Federal Circuit in Virginia. The two sides have now agreed to stipulate to
dismissal without prejudice.

“It is regrettable that the Court will not hear arguments in these
matters, despite the evidence presented in the appeal and the separate
briefs filed with the Court by representatives of commercial organizations
and 15 States. The case now will be decided, again, by jury trial in the
Federal Court for Virginia and we intend to vigorously pursue a full and
fair resolution,” Infineon said in a statement.

In its judgment, the high court issued no commentary but did confirm the
lower court’s ruling that Rambus does have a leg to stand on in its own
patent claims suit against Infineon. The Court also rejected Infineon’s
fraud counterclaims, concluding that Rambus had not been shown to have
violated the rules of an industry standard setting organization called JEDEC
and that those rules showed a “staggering lack of defining details.” The
Federal Circuit also concluded that Rambus did not have applications or
patents that read on any JEDEC standard during the relevant time.

Los Altos, Calif.-based Rambus, which specializes in high-speed
chip-connection technologies, said it is pleased by the ruling and said it
can now proceed with its infringement case against Infineon. That trial will
focus on Rambus patents as defined by the Federal Circuit courts.

“Today’s Supreme Court ruling is another positive step forward for
Rambus,” Rambus senior vice president and general counsel John Danforth said
in a statement. “While we welcome any opportunity to resolve matters
amicably rather than through the courts, we are pleased to have these
JEDEC-related counterclaims behind us and we remain committed to taking the
necessary steps to protect our intellectual property.”

With a Supreme Court decision now rendered, AmTech Research analyst Erach Desai says there is an increased likelihood that the Richmond, Virginia Federal District Court will also provide a summary judgment in Rambus’ favor, clearing the path for royalties on DDR and S-DRAMs.

“While we continued to believe that Rambus’ patent portfolio would be eventually validated, we felt that the case was likely to drag on for years in the off-chance that the U.S. Supreme Court did elect to hear it,” Desai said in a briefing to clients.

As for the Supreme Court’s impact on the pending Federal Trade Commission’s case, final argument documents were due yesterday, and the oral closing arguments are scheduled for October 8th. Desai says the FTC has been decidedly biased in favor of standards bodies, and looking for a linchpin case to prosecute, but the decision could be all for naught.

“In our opinion, the FTC trial has never really mattered much,” he said. Even though the FTC can put up roadblocks for Rambus to collect royalties. In the extreme case, Rambus would appeal and this would eventually make its way to the U.,S. Supreme Court where “rule of law” would prevail.”

The original argument arose from allegations concerning Rambus’ 1991 –
1995 attendance at a standard setting body called JEDEC.

During Rambus’ membership, the JEDEC developed and adopted a standard for
synchronous dynamic random access memory (SDRAM).

According to reports, before, during, and after Rambus dropped its JEDEC
membership, the company made repeated filings with the U.S. Patent and
Trademark Office to ensure intellectual property rights to the SDRAM
standard.

However, Rambus claims that during its membership with the JEDEC, it did
not attempt in any way to influence or speed the progress of its patents
through the committee process.

Once the SDRAM standard was adopted, Rambus made moves, which many say
were legitimate claims, to either collect on royalties or sue those
companies that refused to comply, which included Samsung, Hitachi, Hyundai,
and Micron Technology .

The nagging detail for the plaintiffs in Rambus v. Infineon, is that
Rambus did not disclose its patents until after leaving the JEDEC, by which
time SDRAM was already poised as the next industry standard for memory
chips.

Some say that if Rambus had disclosed its vested interest in the progress
of SDRAM, that the standard would never have been adopted.

Infineon was one of the first SDRAM manufacturers to step forward and
accuse Rambus of fraud by “gaming” the entire JEDEC process. Rambus then
sued Infineon for copyright infringement.

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