Rambus claims a victory with Samsung patent deal

In a bitter and closely-watched technology dispute that has pitted Rambus against most of the world's largest memory chip makers, the company already has secured similar licensing deals with four Japanese memory chip makers -- NEC, Hitachi, Toshiba and Oki Electric Industry.

Rambus remains at loggerheads over its patent claims with other leading memory chip makers including South Korea's Hyundai Electronics Industries, Micron Technology of the US, and Germany's Infineon Technologies. Rambus has initiated court proceedings to secure royalties from those firms, which in turn have filed counterclaims against Rambus.

The deal with Samsung calls for the Korean company to pay Rambus an up-front license fee and quarterly royalty payments for technologies used to make SDRAM (synchronous dynamic random access memory) and Double Data Rate (DDR) SDRAM components, as well as related controller chips that interface with these types of memory.

Exact financial terms weren't disclosed. The agreement is effective for products shipped by Samsung after July 1, and Rambus said it expects to recognise the first payments in the current, December quarter.

SDRAM is the most widely used type of memory in PCs today, while DDR SDRAM is emerging this year as a higher-performance alternative. Samsung already pays Rambus for technologies used in the manufacture of a third memory interface developed by the firm, called Direct RDRAM (Rambus dynamic random access memory).

With the blessing of microprocessor behemoth Intel, Direct RDRAM at one time looked set to become the main memory technology used in PCs. Pricing for Direct RDRAM components remained too high for widespread use, however, and Rambus' bright future began to look more uncertain.

Then in 1999, Rambus began asserting that its patents also cover technologies used in the manufacture of the more widely used SDRAM and DDR SDRAM components, and set about enforcing those claims with a lawsuit against Hitachi. Shortly after, Toshiba stunned the industry by agreeing to pay royalties to Rambus covering, among other things, SDRAM and DDR DRAM. Soon after Hitachi followed suit and settled its legal differences with Rambus.

Hyundai and Micron have continued to hold out against Rambus' claims. In August, the companies each filed suit against the company contesting the validity of its patents. Rambus responded the next month by filing patent infringement lawsuits against the two Korean firms in Europe. Rambus positioned the deal with Samsung as a significant victory for the company. The South Korean company is the world's leading supplier of memory components, and commands a 20.7 per cent share of the world's DRAM market, Rambus said in the statement, citing figures from research firm Dataquest.

With the addition of Samsung, Rambus said it now collects royalty payments from chip makers that represented 40 per cent of the world's DRAM market in 1999.

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