By Town Crier Staff Report
Los Altos-based Rambus Inc. suffered a major setback last week when a Virginia court ruled the intellectual property company, known for speedy computer chips, committed fraud by not disclosing patents while participating in an open standards process.
Federal judge Robert E. Payne dismissed all Rambus patent infringement claims against Infineon, a German semiconductor company, who was sued by Rambus last August. Infineon then countersued Rambus for fraud. Payne awarded Infineon $3.5 million in punitive damages.
The May 10 ruling is a severe blow to 170-person company, which recently moved into a posh new office building on El Camino Real, the site of the former Tree Farm. Rambus earns revenue by patent royalties. The company has no manufacturing and essentially sells its ideas to clients. Rambus officials immediately announced plans to appeal.
In a statement, Infineon claimed Rambus “subverted the open standards process rules governing the Memory Standards Committee of the Joint Electronic Device Engineering Council (JEDEC) by not disclosing relevant patents and patent applications.” The JEDEC sets standards for some 300 member companies, including Rambus.
“The innovations at issue are Rambus inventions and the evidence presented at trial made it clear that Infineon knew all along that they were Rambus inventions,” said Rambus CEO Geoff Tate in a statement. “I attended the whole trial and continue to believe that Infineon’s JEDEC charges are completely baseless. Rambus abided by JEDEC’s rules despite the fact that these rules have been shown to be confusing, conflicting, poorly communicated and generally not complied with by other JEDEC members.”
“Rambus made the same allegations at trial,” said John Kelly, president of the JEDEC. “After hearing all the evidence, a federal jury reached a different conclusion.”
Ulrich Schumacher, Infineon president and CEO, said, “The jury’s decision reinforces the importance of industry leaders working together in high-tech standards consortia such as JEDEC to develop next-generation DRAM (Dynamic Random Access Memory) technology.”
“Rambus will continue to fight to protect its intellectual property,” Tate said. “As we have long maintained, it’s our right, as well as our obligation to Rambus stockholders, to take all appropriate measures to protect our patented innovations.”
Rambus has sued two other companies, Micron Technology and Hyundai, for patent infringement.
The Virginia verdict could loom large in the memory-chip industry, with billions of dollars in patents earnings at stake. Last Friday, Rambus stock closed at $11.79 a share. Last June, the stock soared to a split-adjusted, 52-week high of $135 a share. Three weeks before that, a 4-for-1 stock split was completed.
The stock has been downgraded by numerous brokerage firms this past week.
