Rambus Loses Two Fraud Claims, Plans Appeal
By Peter Brown -- 5/9/01 2:31:00 PM
Electronic News
The jury today in the Rambus Inc. and Infineon Technologies Inc. trial awarded Infineon $3.5 million in punitive damages after ruling in favor of Infineon on Count 10 Actual Fraud and Count 11 Constructive Fraud of the lawsuit. The jury rejected Infineon's allegation that Rambus had violated RICO.
U.S. District Judge Robert Payne reduced the jury's award to $350,000, the maximum allowed by Virginia law.
The jury’s judgment does not affect any patents or royalties Rambus receives for its direct Rambus DRAM (RDRAM) memory. The patents and royalties at issue are those involving both SDRAM and DDR DRAM memory.
"I’m surprised this (trial) has happened as quick as it has and it has been so one-sided," said Dan Scovel, analyst with Needham & Co. "I think clearly that Rambus has had momentum and perceived momentum for a number of years and this trial has stopped Rambus clearly dead in its tracks."
Scovel added that this suit is the first in a long series of battles that includes trials in various states and countries against DRAM vendors Hynix Semiconductor Inc. and Micron Technology Inc. "We are far from done here, but this first round, if it holds up, may be a leading indicator and would increase the odds that other Rambus adversaries might have the upper hand," Scovel said.
Rambus, Los Altos, Calif., said in a statement that it plans to "immediately appeal" the verdict of fraud found by the jury. Rambus also plans to file post-trial briefs with the U.S. District Court for the Eastern District of Virginia to set aside the jury’s verdict.
"We are obviously disappointed in today's verdict and will immediately appeal," said Geoff Tate, CEO of Rambus. "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," Tate added. "Today's verdict, if allowed to stand, poses a serious threat to all technology companies that try to protect their inventions through our intellectual property laws. It puts innovators at risk of forfeiting their intellectual property rights by simply attending meetings of a standard-setting committee.
"Rambus will continue to fight to protect its intellectual property. As we have long maintained, it is our right, as well as our obligation to Rambus shareholders, to take all appropriate measures to protect our patented innovations. We will vigorously defend our patent rights against any company that attempts to use our innovations without compensation," Tate said.
Infineon said it is very pleased with the judgment and it believes the judgment will stand regardless of any appeal. The company plans to comment further on the judgment tomorrow.
Needham’s Scovel said that if the judgment stands, it will reduce the risk that all three companies now involved in lawsuits with Rambus might have to pay royalties on SDRAM and DDR DRAM. "Now the question is, if Rambus cannot shore up the dam here, what will be interesting is how the DRAM manufacturers who have signed licensing deals react," he said.
Scovel said he believes that if the judgment holds these companies who have already signed agreements-including Samsung and Elpida-will either renegotiate their deals, cut off the royalty payments or have Rambus return money that has already been paid.
Rambus’ stock was down 6.57 percent today to close at $12.80 losing 90 cents on the day. |
