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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: qwave who wrote (36636)	1/18/2000 9:26:00 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Rambus sues Hitachi--will others be next? By Michael Kanellos Staff Writer, CNET News.com January 18, 2000, 5:25 p.m. PT Memory designer Rambus has filed a lawsuit against Hitachi for patent infringement, a move that could end up spreading across wide segments of the semiconductor industry. Mountain View, Calif.-based Rambus filed an action in the Federal District Court in Delaware which alleges that Hitachi unlawfully incorporated Rambus' intellectual property into the designs of a large number of Hitachi memory chips and microprocessors, according to company executives. Rambus is seeking an injunction, as well as punitive damages. Hitachi could not be reached for comment. The exact circumstances of the suit, however, indicate that Hitachi won't likely be the only company hit by some sort of legal action or request for royalties. Conceivably, Rambus could eventually file similar, although likely less bitter, suits against any company that made memory, or products that "interface" with computer memory, during the past 10 years. Such a list could Samsung, Micron Technologies, Infineon, IBM and Intel. Rambus, in fact, has already opened negotiations with some companies over licensing deals that would effectively bring about a settlement of any claims. "We believe we have some fundamental synchronous memory technology intellectual property," said Avo Kanadjian vice president of worldwide marketing for Rambus. "We are talking to a number of companies." Kanadjian declined to identify any of the companies. "We are in discussions, and we do prefer settlement." The legal action springs from the vagaries of Rambus's history and the inner workings of patent law. The four patents involved in the suit were awarded to Rambus in 1999. However, they all date back for legal purposes to April 1990, when Rambus filed for its patents, Kanadjian said. The SDRAM effort, meanwhile, didn't get kicked off until late 1991, he stated, while SDRAM chips didn't start rolling out until 1993. Rambus claims it showed its technology to Hitachi in the mid-90s and proposed a licensing agreement. Hitachi then incorporated this technology, according to the complaint and Kanadjian, into 100-MHz SDRAM and 133-MHz SDRAM as well as its SH family of microprocessors. "Our business model is to develop intellectual property to license to others. We believe that Hitachi has used our intellectual property to develop non-Rambus products," he said. Hitachi eventually took out a limited license with Rambus, but one that doesn't cover these products. Hitachi has never made Rambus parts. Although Hitachi's actions, if true, seem calculated, Rambus does not have to show that to sustain a claim, which is how the suit broadens. Under the "prior art" doctrine of patent law, the date of the initial patent determines whether or not liability exists. If a second company develops identical or similar technology without access or knowledge of the original patents, the second company can still be held liable only because its invention came later. "In this country, it's first to file," said Rich Belgard, a patent consultant. Other technology companies, in effect, could have unwittingly infringed upon the patents. This list could include memory makers but also processor manufacturers, motherboard makers and chipset makers. Ironically, many companies have license agreements with Rambus but most are relatively limited in scope. Lawsuits are dreaded in Silicon Valley, but Kanadjian stated that such suits are a fact of life. Rambus is one of a number of "IP" semiconductor companies that only make money if they can license their technology to larger, established companies. "I don't know of any company that doesn't respect intellectual property," he said. "I don't think these suits are filed without significant material to back them up."