Rambus cleared of standards setting charge

A U.S. district court Thursday set aside a jury verdict from the May trial of Rambus Inc., clearing the memory chip designer of allegations that it set standards relating to a technology used to accelerate memory chips, the company said Friday.

The U.S. District Court for the Eastern District of Virginia's decision to throw out the verdict accusing Rambus of seeking patents on DDR (double data rate) SDRAM (synchronous dynamic RAM) while participating in a technical-components standards-making body, is just part of the post-trial legal wrangling that has marked Rambus' case against Germany's Infineon Technologies AG.

Rambus sued Infineon last year, claiming that it infringed on patent designs in manufacturing SDRAM and DDR SDRAM chips. Rambus had secured licensing deals with other chip makers, but Infineon, along with Micron Technology Inc. of Boise, Idaho and South Korea's Hynix Semiconductor Inc. refused to pay royalties.

Rambus lost its case against Infineon and received a double blow in the form of a US$3.5 million fine in punitive damages for fraud. At that time, U.S. District Judge Robert E. Payne ruled that Rambus improperly obtained patents on chips that were being developed by the JEDEC (Joint Electron Device Engineering Council) while the company was participating in the group. The fine was later reduced to $350,000.

In its defense, Rambus claimed that the JEDEC's guidelines on participation are confusing and that other members flout the rules.

As for Rambus' small victory Thursday, company Chief Executive Officer (CEO) Geoff Tate said in a statement Friday that the company was "pleased" with the decision to throw out the jury's standard-setting allegation, but that the company still plans to appeal the patent infringement case as well as the jury verdict on Rambus' behavior at JEDEC regarding SDRAM.

"We aim to conclusively prove that Infineon is violating Rambus' patent rights and that Rambus must be justly compensated by Infineon for the use of our patents," Tate said in the statement.

The court also rejected Thursday a motion by Infineon to enjoin Rambus from pursuing litigation pertaining to Infineon's DDR SDRAM products. In a parallel ruling, the court prohibited Rambus from pursuing litigation in the U.S. regarding Infineon's JEDEC compliant SDRAM memory products.

As long as Infineon's DDR SDRAM products comply with JEDEC standards, Rambus can't sue Infineon for selling the products, according to John Desmarais, an attorney for Infineon with the New York law firm Kirkland & Ellis. "The court found that Rambus defrauded JEDEC, and did it intentionally," he said. "Rambus is adjoined from ever suing Infineon again over the patents involved where Rambus defrauded JEDEC."

Rambus was also ordered by the court to pay $7.1 million in legal fees to Infineon, Desmarais said.

The two companies are set to face off again at a later date on Infineon's turf in Germany. Rambus is suing Infineon in a German court, accusing it of infringing on Rambus' European patents. Last month, the judge overseeing in the case decided to appoint a technical expert to provide him with advice in the lawsuit. Infineon hopes the verdict in the U.S. will help its case overseas. "In the rulings that came out yesterday, the court in Virginia actually said that the German case was part of Rambus' fraudulent scheme," Desmarais said. "Hopefully the German court will recognize that and take it into account."

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