TIMES-DISPATCH: Infineon is victor in court
Judge tosses out claims by Rambus
BY MCGREGOR MCCANCE
TIMES-DISPATCH STAFF WRITER May 04, 2001
A Richmond federal court judge yesterday erased claims of patent infringement against computer memory chip maker Infineon Technologies AG.
U.S. District Judge Robert E. Payne ruled that Rambus Inc. failed to show enough evidence to forward the claims to a jury. The final three claims joined 54 others from the original lawsuit that already were dropped or tossed.
The ruling shatters Rambus' hope to collect hundreds of millions of dollars in royalties on certain types of memory sold by Infineon, whose sole chip plant in the United States employs 2,000 in eastern Henrico County.
Court observers say the ruling also could jolt the foundation of Rambus' existing royalty agreements with other memory manufacturers that elected to strike deals instead of risking expensive, drawn-out lawsuits.
Rambus, a California company that designs and licenses technology used in memory products, said it will appeal Payne's ruling.
"Rambus will continue to fight to protect our intellectual property," CEO Geoff Tate said in a statement. "Though Rambus is a relatively small company, we will not be cowed by the aggressive tactics of some industry giants who would take our innovations without any compensation."
Rambus shares plunged on the news. After a temporary halt in trading, the stock closed down 20 percent to $14.60.
Payne also issued other key rulings yesterday.
In one, he said he will allow the jury to decide on an Infineon counterclaim that Rambus engaged in fraudulent behavior under federal laws.
Infineon claims Rambus stole memory specifications from an industry organization while it was a member of the group, based new patent applications on the technology and later used the patents in an attempt to corner the computer memory industry.
The judge tossed out two Infineon claims. One alleged that Rambus attempted to monopolize the memory market, which would have been a violation of antitrust laws; the second alleged a breach of contract.
Lawyers continued last evening to argue a second fraud allegation, as well as whether Rambus would be liable for $562,000 in fees lawyers racked up in connection with the Infineon case.
Though the case can be tied to broad, global business and technology issues, the judge's decision to dismiss the infringement claims relied literally on microscopic evidence.
Essentially, the argument was reduced to the tiny lines or wires that carry information through computer components such as memory chips and other chip features.
Infineon said Rambus didn't come close to proving that the technology used in Infineon's chips matches the Rambus technology, though Rambus said one of Payne's early rulings on technical definitions handcuffed its case throughout.
Rambus has licenses with all of the world's top producers of its primary technology, found in Rambus-dynamic random access memory.
Claims and counterclaims began to fly last year, however, when Rambus said its patents also cover two other memory types that are considered industry standards.
The company has cases pending against other chip manufacturers including Micron Technology Inc. A suit also is pending against Infineon in Europe.
Micron is expected to rely on some of Payne's rulings to bolster its case.
Industry analyst Mark Edelstone, who downgraded Rambus' stock yesterday, suggested widespread ripple effects from Payne's decisions and what the jury might decide.
"If the courts rule these patents are invalid, you have to wonder how long these other companies are going to want to pay royalties," Edelstone told The Associated Press.
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