Rambus CEO gung ho on memory lawsuits
By Matt Berger, IDG News Service\San Francisco Bureau
May 11, 2001, 16:30
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The chief executive for memory chip design company Rambus Inc. said Friday in a mid-quarter conference call that the company was undeterred in its efforts to pursue further legal battles to protect its intellectual property and would maintain its core business efforts to collect licensing revenue for its patents.
Geoff Tate, Rambus' CEO, said in the call that most of the efforts by competitors to derail its licensing revenue model are the result of "a great deal of envy." He also reiterated that the company would fight last week's legal setbacks in its case against Infineon Technologies AG, and said the setbacks won't deter similar cases against other industry rivals from moving forward.
"We are totally committed to our appeal to over turn (last week's ruling)," Tate said.
Rambus is scheduled to take on Infineon again next week in a German courtroom for allegedly violating of some of Rambus' European patents. "We expect a decision from the judge in the German case sometime in June," Tate said.
Rambus also is trudging through a legal fight with Micron Technologies Inc. both in Italy and in the U.S. A decision in the Italy trial should come this month, Tate said, timed closely with the start of a case in a Delaware court scheduled to begin May 31.
The Los Altos, California-based memory chip firm held its regularly-scheduled mid-quarter conference call Friday amid a week of unsettling activity. The company lost a major legal decision that puts one of its strongest sources of revenue -- royalty fees -- at risk, and casts a shadow over much of its continuing efforts to build a business through licenses agreements.
Also late Thursday, Rambus' Chief Financial Officer Gary Harmon said he would retire from the company at the end of the quarter and be replaced by Bob Eulau
Eulau was introduced by his predecessor during the call, during which he shared Tate's optimism for Rambus' future. "I came here based on the future strengths of the business, I certainly did not come here to speculate on the outcome of litigation," he said.
Tate said during the call that the recent court battles have flooded the media, while the real attention should be paid to its proprietary business based on licensing its RDRAM (Rambus Dynamic Random Access Memory) technology to memory chip makers. Still, the growing market for SDRAM (Synchronous Dynamic Random Access Memory) and DDR SDRAM (double data-rate SDRAM) technologies is being closely watched.
Rambus set off on its latest legal maneuvering when it filed suit against German chip maker Infineon Technologies AG, for alleged patent infringement on its SDRAM and DDR SDRAM technologies. After a quick pass through a in U.S. District Court in Richmond, a judge threw out all of Rambus' 57 claims against Infineon.
Following that failed legal push against Infineon, the German chip giant counter-sued Rambus, seeking $105 million in punitive damages for defrauding the industry by failing to disclose it was seeking patents for its SDRAM and DDR SDRAM.
Rambus was ordered to pay Infineon $3.5 million this week based on a ruling that it improperly obtained patents on its chip designs while they were simultaneously being developed at meetings of the Joint Electron Device Engineering Council (JEDEC), an industry standards group with members including Sun Microsystems Inc. and Motorola Inc.
Rambus said it will appeal the fraud verdict and pursue further action against Infineon, which some analysts argue could drag on for a further six to 18 months. Tate said Friday the company expected a resolution to the appeal next year.
Rambus may have also set a complicated precedent for a number of upcoming court cases against other chip makers holding out against Rambus' licensing push. In addition to Infineon and Micron, Rambus is scheduled to take on rival Hynix Semiconductor Inc., formerly Hyundai Electronics Industries, in a California court sometime in 2002.
"It is not clear how the decision for fraud impacts the upcoming Micron case," Mark Edelstone, an analyst with Morgan Stanley Dean Witter & Co., wrote in a research report Thursday.
Other analysts agreed. "It's not all that clear where they'll be going from here," said Dean McCarron, a chip industry analyst with Mercury Research Inc. "One thing that is clear -- because of the nature of the legal rulings against them -- it basically went as badly as it could have."
Edelstone also questioned what effect the court's recent ruling could have on Rambus' existing licensing agreements. Eight companies around the world pay royalties to Rambus for its controversial patents. "Based on the decision in the Infineon case, we believe there is a strong possibility that Rambus' existing SDRAM and DDR licensees may renege on their contracts," he wrote.
But Tate said the company would not back down in its efforts to create new markets through its designs and innovations. "We owe it to our shareholders" to ensure that any company that uses Rambus technology pays royalties," he said Friday.
Rambus, in Los Altos, California, can be reached at rambus.com. |
