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Rambus wins major DRAM court case

-March 27, 2008

Rambus Inc has scored a legal victory in a long-running case involving its memory market competitors Hynix Semiconductor, Micron Technologies, and Nanya Technology that could see it gain new royalty payments.

The case, originally filed by Hynix against Rambus in August 2000 and then split into three separate phases, questioned Rambus’ conduct while JEDEC was setting DRAM standards in the late 1990s. Hynix, Micron, and Nanya argued that Rambus violated antitrust laws by monopolizing, or attempting to monopolize, six technology markets through Rambus patents covering features in JEDEC industry standards for DRAM interface technology.

A jury determined Wednesday that Los Altos, Calif-based Rambus acted properly while a member of JEDEC and found that the memory manufacturers did not meet their burden of proving antitrust and fraud claims.

In doing so, Rambus has now prevailed in all three phases of the trial, with the verdict expected to complete the phase of the case involving Hynix. Hynix was found by a previous jury in April 2006 to infringe a variety of Rambus patents. In that phase of trial, Rambus was awarded $133.6 million in damages.

"This ruling should put to rest a series of ongoing allegations Rambus has endured for many years," said Tom Lavelle, senior VP and general counsel at Rambus, in a statement. "Our business is to license our revolutionary technology to the industry for fair compensation. We are pleased to have this decision behind us as we continue to engage with the industry to deliver compelling products to the market."

Rambus and Lavelle aren’t the only ones happy. Wall Street showed its support of the ruling, sending shares of Rambus up 39% for a new 52-week high of $25.86 by the end of Wednesday’s trading. The stock, RMBS, slipped in today's trading, however, to $24.16 at 2:52pm eastern.

While Hynix and Nanya have not released statements on the ruling and could not be reached by Electronic News for comment, Micron has stated that it “strongly disagrees” with the ruling and will appeal.

Micron said it believes that that the jury’s decision is inconsistent with previous decisions by the US Federal Trade Commission (FTC) and the European Commission (EC). In August 2006, the FTC found that Rambus “unlawfully monopolized" the markets for four computer memory technologies used in DRAM chips. The FTC followed up that ruling in February 2007 when it ordered the company "to remedy the effects of the unlawful monopoly Rambus established in the markets" by licensing its IP and capping royalties. Then in July 2007, the EC issued a statement of objections, saying Rambus had infringed EC treaty rules on "abuse of a dominant position" by claiming "unreasonable royalties" for the use of certain patents for DRAMs, subsequent to a so-called "patent ambush." 

“Micron believes that Rambus has engaged in a pattern of deception, destruction of evidence, false testimony, and other improper activities designed to mislead and to extract unjust patent licensing fees and damages,” said Rod Lewis, Micron’s VP of legal affairs and general counsel, in the company’s statement. “We will continue to vigorously advance our claims that Rambus has engaged in a variety of illegal activities designed to injure Micron.”

Rambus still has cases pending against Hynix, Nanya, Micron, and Samsung in the Northern District of California, and with Micron in the District of Delaware.

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