By Elizabeth Cloutman
Stockholders have also filed suits
While Los Altos-based Rambus Inc. gained a partial victory Aug. 10, when a federal judge threw out part of the fraud case against it, its legal woes continue.
Three lawsuits for patent infringement against Rambus are now on court dockets, and last week stockholders filed two suits against the company.
Rambus has claimed the patents for Rambus DRAM, or RDRAM, also cover aspects of competing memory types - synchronous DRAM (SDRAM) and double-data-rate synchronous DRAM (DDR) - and the company is thus entitled to receive royalties from their manufacturers. Both Infineon Technologies and the stockholders’ suits allege Rambus’ patents were obtained fraudulently after the company patented technologies that were discussed in an industry consortium for inclusion in the SDRAM standard.
The company, located on El Camino Real at the former site of the Tree Farm, does not manufacture anything, but sells its ideas to clients. “We’re an IP (intellectual property) company, and we want to protect our property,” said Kristine Wiseman, Rambus public relations director, explaining the company’s suits against Infineon, Micron Technology and Hynix Semiconductor (formerly Hyundai Electronics Industries). “When somebody decides they’re not going to compensate you for your intellectual property, you have to resort to litigation.”
Eight companies - Hitachi, NEC, Samsung Electronics, Mitsubishi Electric, Oki Electric Industry, Elpida Memory, Matsushita Electric Industrial and Toshiba - bought licenses from Rambus. Micron and Hynix Semiconductor contended Rambus was interpreting their patents too broadly.
Rambus had sued Infineon, a German semiconductor company, for patent infringement, and Infineon countersued Rambus for patent fraud. On May 10, U.S. District Judge Robert E. Payne dismissed all patent infringement claims against Infineon. He awarded Infineon $3.5 million in punitive fees.
In Richmond, Va., Aug. 10, Payne threw out part of Infineon’s patent fraud countersuit. However, he let stand another part, in which a jury found Rambus did commit fraud related to its patents. The court found “Rambus acted deliberately (pursuant to its Business Plan) and with callous disregard of its disclosure obligations and the rights of Infineon and other JEDEC members,” according to court documents. Payne also ordered Rambus to pay Infineon $7.12 million in legal fees.
“We are pleased that the record has been set on DDR SDRAM,” said Geoff Tate, CEO of Rambus. “However, Rambus still intends to appeal the patent infringement case and the jury verdict on Rambus’ behavior at JEDEC (Joint Electronic Device Engineering Council) with regard to SDRAM. We aim to prove conclusively that Infineon is violating Rambus’ patent rights and that Rambus must be justly compensated … for the use of our patents.”
A press release from Infineon stated, “The court’s decision to uphold the jury’s verdict confirms the importance of intellectual property disclosure during the industry-wide, open standard-setting process.”
Rambus has suits against Micron pending in both Germany and Delaware, as well as one against Hynix in Germany, Wiseman said.
Rambus has also incurred the wrath of some of its stockholders. On Aug. 14, Milberg Weiss Bershad Hynes and Lerach LLP, a 170-lawyer firm, announced it had filed a class action suit in the Northern California federal district court on behalf of people who purchased Rambus common stock between Jan. 18, 2000, and May 9 - the day prior to Payne’s dismissing Rambus’ patent infringement case against Infineon. Then on Thursday, stockholder Peter Boyadjian filed a suit against Rambus in a Delaware court. Both the Milberg Weiss and Boyadjian’s suits allege Rambus directors intentionally misled JEDEC at the time the consortium met to establish SDRAM industry standards.
During the course of the course of Rambus’ patent infringement trial against Infineon, Rambus’ stock plunged from $450 to below $10 per share. At the close of the trading day Friday, Rambus stock was selling for $7.21 per share.
