Rambus Loses Another Round in Patent Infringement Case

By eweek  |  Posted 2001-11-27

A federal judge has barred Rambus Inc. from staking claim to two types of popular PC memory technologies, handing the company another setback in its efforts to collect potentially hundreds of millions of dollars in royalties from chipmakers worldwide.

Judge Robert Payne issued the ruling late Monday in the patent-infringement case Rambus initiated against German chipmaker Infineon Technologies A.G. in the U.S. District Court in Richmond, Va.

Rambus, which earns most of its revenue in royalties from the makers of Rambus DRAM (RDRAM), has been seeking to extend its patent claims to include the more popular synchronous DRAM (SDRAM) and its high-speed successor, double-data-rate SDRAM (DDR SDRAM).

Although RDRAM was once expected to become the most popular PC memory solution, thanks in large part to the backing of giant chipmaker Intel Corp., the technology has so far failed to garner significant PC industry and customer support. Currently, less-costly SDRAM remains the most widely used PC memory technology.

Efforts by Rambus, of Los Altos, Calif., to draw revenue from SDRAM have resulted in a public, and costly, rebuke of its patent claims and business practices.

In May, a federal jury ruling in a countersuit filed by Infineon found Rambus guilty of fraud. Specifically, Rambus was found to have illegally based its patents on information it obtained from industry-held meetings to develop open standards. An appeals court upheld the ruling in August.

While Rambus was initially ordered to pay Infineon $3.5 million in damages, the award was later reduced to $350,000. But in addition to damages, Rambus was ordered to pay $7.4 million to Infineon to cover the Munich, Germany, companys legal fees, with the judge remanding Rambus for filing a "baseless, unjustified and frivolous" lawsuit.

In Mondays action, the court issued a permanent injunction barring Rambus from asserting its claims to SDRAM and DDR SDRAM products made by Infineon. The ruling should stymie Rambus efforts to collect royalties from other chipmakers, Infineon executives said.

"The fraud committed by Rambus affected an entire segment of the semiconductor industry," said Ulrich Schumacher, president and CEO of Infineon, in a statement released today. "This is a very important decision both for Infineon and for the entire DRAM industry."

Rambus condemned the decision and vowed to appeal.

"With all due respect to the Virginia District Court, todays order builds upon and adds to a series of reversible errors previously made by the same court," said John Danforth, senior vice president and general counsel of Rambus. "We look forward to successfully resolving these issues in the Court of Appeal for the Federal Circuit."

The main focus on the case stemmed from Rambus involvement in meetings held during the early 1990s by the Joint Electronic Devices Engineering Council (JEDEC). The meetings, attended by representatives of various memory chipmakers, were designed to develop open industry standards. Under JEDEC guidelines, participating companies were required to disclose patents or potential proprietary claims to the technologies discussed.

"Infineon contended that Rambus used the information it gathered from those meeting to adjust its patents, thereby laying claim to future technological designs chipmakers had revealed. JEDEC meetings and then drafted the (patent) claims onto the JEDEC standard intentionally, and the jury agreed with us," John Desmarais, a lawyer with the firm Kirkland & Ellis, which represents Infineon, said in an interview with eWEEK in May.

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