SAN JOSE, Calif. (AP) - Rambus Inc. scored a key victory Wednesday in its
nearly decade-old fight with memory chip makers when a jury found the company
did not engage in monopolistic behavior by patenting technologies that
eventually became standard in memory chips.
Shares of the Los Altos-based company shot up $7.25, or nearly 39 percent,
to $25.86 during regular-session trading on the news. They gained another $1.02
to $26.88 after hours.
The jury's decision could help Rambus as it tries to collect millions of
dollars in royalties on patents some of the biggest memory chip makers claim
were fraudulently obtained.
Rambus makes most of its money by licensing patented chip designs that were
created by its engineers and used widely by other companies in their DRAM chips,
or dynamic random access memory, the most common type of memory chip used in
personal computers.
Rambus had about $180 million in revenue in 2007.
However, Rambus still faces major court battles over its patents, including
its attempt to overturn a 2006 Federal Trade Commission ruling that the company
deceived a standards-setting committee and created a monopoly in the memory chip
industry. Rambus is hoping for a decision by this summer on its appeal.
After a seven-week trial, a jury in U.S. District Court in San Jose decided
Wednesday in Rambus' favor on all three counts it was deliberating, according to
Thomas Lavelle, Rambus' general counsel. The jury deliberated for just one day.
In the lawsuit, originally filed in 2000, chip makers Micron Technology
Inc., Hynix Semiconductor Inc. and Nanya Technology Corp. argued that patents
held by Rambus for key technologies now included in their chips should be
considered invalid. And they said they shouldn't have to pay royalties to
Rambus.
The companies say Rambus engaged in illicit behavior in filing the patents
for technologies used in DRAM chips.
The FTC found Rambus deliberately withheld information from the Joint
Electron Device Engineering Council (JEDEC) -- an important engineering council
which counted Rambus as a member -- when the council was developing technical
standards for all companies in the computer memory industry.
The FTC found Rambus concealed information about which patents it had
secured or knew it would be able to secure.
The council adopted standards that meant other companies hoping to use the
technology in question would either have to infringe on Rambus' patents or buy
expensive licenses to use the technology.
Rambus officials were pleased with Wednesday's decision but acknowledged
other sizable hurdles remain before the company can collect royalties.
"The issue of the behavior of Rambus at JEDEC has really been a problem for
Rambus, because the manufacturers have turned it into a cause celebre, saying we
behaved improperly and illegally," Lavelle said in an interview. "This jury
found that's not the case. We believe it vindicates what we've done."
Micron said it plans to appeal the jury's finding.
"Micron believes that Rambus has engaged in a pattern of deception,
destruction of evidence, false testimony and other improper activities designed
to mislead and to extract unjust patent licensing fees and damages," Rod Lewis,
Micron's general counsel, said in a statement. "We will continue to vigorously
advance our claims that Rambus has engaged in a variety of illegal activities
designed to injure Micron."
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