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

To: Don Green who wrote (71949)	5/4/2001 5:58:41 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Judge Dismisses SDRAM Claims In Rambus/Infineon Suit Alex Romanelli and Peter Brown -- 5/4/01 2:21:00 PM Electronic News Rambus Inc. of Los Altos, Calif., has lost its remaining three claims of patent infringement against Infineon Technologies AG. The U.S. District Court for the Eastern District of Virginia today granted a motion to dismiss the remaining three claims. Rambus (nasdaq: RMBS) has already issued a statement, saying that it will appeal the court’s ruling. "We are disappointed with the Court's decision and plan to appeal the ruling," said Geoff Tate, Rambus’ chief executive officer, in a statement. "If today's decision is allowed to stand, all companies that innovate risk having their intellectual property rights unjustly expropriated." Infineon declined to comment on the proceedings. Shares in Rambus fell by as much as 16 percent before trading was halted prior to the announcement of the ruling, according to Bloomberg. Trading had been frozen at $15.50, down 14.6 percent, when the company issued its statement revealing the court’s decision shortly after noon. Its shares then continued to fall, before recovering slightly to end trading today at a 52-week low of $14.60, down 19.6 percent. Infineon’s stock closed trading today at $42.40, up 5.3 percent. Morgan Dean Stanley Witter, one of the underwriters on Rambus’ IPO, today downgraded the stock to neutral. "This seems like a pretty solid win for Infineon and is obviously bad news for Rambus," said Dan Scovel, analyst at Needham & Co. "The impact of all of these DRAM cases is obviously most weighted most on Rambus. If they win, they win the most. If they lose, they lose the most." "The big winners here beyond just the three DRAM makers involved in all these cases are the rest of the DRAM makers who have already agreed to pay royalties on SDRAM to Rambus," Scovel said. "Obviously, if this case holds, they won’t be paying royalties on SDRAM anymore." Analyst agree that if the decision stands this will significantly impact Rambus in the short term-as SDRAM royalties make up a considerable portion of the company’s revenues. Long term, Rambus still has plenty of opportunities to make it into the sweet spot of the DRAM market. "While SDRAM right now is the main memory of choice the jury is still out on whether RDRAM or DDR will be the next sweet spot in the market," Scovel said. "They may have to wait a few years to get into the sweet spot but they could potentially still be there." Scovel also said Rambus has had plans for a while now to move into the communications and consumer markets, which will enable them to stretch its arms into areas outside of the computer markets. The claims were all that was left of a suit filed by Rambus over the use of patents in SDRAMs and DDR SDRAMs manufactured and sold by Infineon in the United States. "Rambus will continue to fight to protect our intellectual property," Tate said. "It is our right, and indeed our obligation to our shareholders, to take all appropriate measures to protect our patented innovations. 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." Earlier in the week, U.S. District Court Judge Robert Payne dismissed all but three of the patent infringement claims filed by Rambus, ruling that the company failed to prove that patents related to SDRAM and DDR SDRAM technology had been violated.