Supreme Court won't hear Rambus/Infineon case

Patent case sent back to lower court for a new trial

The U.S. Supreme Court yesterday boosted Rambus Inc.'s almost four-year battle to collect royalties from makers of memory chips that the company says use its patented high-speed memory interface technology in their products.

The nation's highest court denied a request to review an appeals court decision that favored Rambus over Infineon Technologies AG, a Supreme Court spokeswoman said. Infineon is a Munich-based semiconductor maker that disputes Rambus' claims that it's entitled to collect the royalties in question.

The court's denial upholds the ruling of the U.S. Court of Appeals for the Federal Circuit, issued in January, and sends the case back to the lower court for a new trial, a spokeswoman for Los Altos, Calif.-based Rambus said.

"Today's rulings help substantiate the importance of our past inventions and allow us to continue our focus on technology leadership," said Geoff Tate, Rambus' CEO, in a statement.

Infineon responded in a statement e-mailed to IDG News Service. "It is regrettable that the court will not hear arguments in these matters, despite the evidence presented in the appeal and the separate briefs filed with the court by representatives of commercial organizations and 15 states. The case now will be decided, again, by jury trial in the Federal Court for Virginia and we intend to vigorously pursue a full and fair resolution."

In May 2001, the lower court -- the U.S. District Court for the Eastern District of Virginia, in Richmond -- threw out all Rambus claims of patent infringement against Infineon related to synchronous dynamic RAM (SDRAM) and double data rate SDRAM (DDR SDRAM). This decision was a response to the lawsuit Rambus had filed against Infineon.

That court also found Rambus guilty of fraud for obtaining patents on chip design standards that were being developed at the time by the Joint Electron Device Engineering Council (JEDEC) memory standards group, of which Rambus was a member, and fined the company $3.5 million. This decision was in response to an Infineon countersuit.

In October 2001, the lower court later refined its decisions on the Infineon countersuit, reducing the fraud fine to $350,000 and determined that Rambus had committed fraud with regard to SDRAM but not with regard to DDR SDRAM. The lower court also banned Rambus from pursuing litigation in the U.S. against Infineon's JEDEC-compliant SDRAM memory products

The lower court's actions were a blow to the crusade Rambus had launched in early 2000 to collect royalties from its SDRAM and DDR SDRAM patents.

However, the appeals court's decision in January this year deflated Infineon's victory by confirming the breadth of Rambus' patent claims, which the lower court had narrowed, and determining that Rambus had not committed fraud.

Infineon's attempt to have the lower court's decision restated died yesterday when the Supreme Court refused to review the appeals court's decision. While Rambus' patent infringement claims will be retried at the lower court, Infineon's fraud allegations will not be retried, because the fraud verdict was reversed by the appeals court, the Rambus spokeswoman said.

However, Rambus is still not out of the woods on the JEDEC fraud allegations. The U.S. Federal Trade Commission has charged the company with deceiving the JEDEC to profit from licensing fees (see story). That case is being heard by an FTC administrative law judge. Oral closing arguments on that case are scheduled for tomorrow, the Rambus spokeswoman said.

Rambus began its crusade in January 2000 when it sued Hitachi Ltd. in the U.S. District Court of Delaware. Rambus alleged that Hitachi had infringed on its high-speed memory interface technology in Hitachi semiconductor products featuring SDRAM and DDR SDRAM. Rambus wanted the court to forbid Hitachi from manufacturing, selling or importing chips featuring the patented technologies. The technologies in question had, until then, been made available to all manufacturers, free of royalties.

Rambus scored a huge victory six months later when Toshiba Corp. agreed to sign a licensing deal with it and to pay royalties to the company. About a week later, Hitachi also relented and, like Toshiba, agreed to a licensing deal. In August 2000, Rambus confirmed that it was having talks related to this issue with all major makers of SDRAM, seeking licensing agreements. The following month it signed a licensing agreement with NEC Corp., and in November 2000 with Samsung Electronics Co.

However, not everyone agreed to Rambus' demands, including Infineon, Hynix Semiconductor Inc. and Micron Technologies Inc., which opted separately to fight Rambus in court to try to invalidate its patent claims. While a variety of legal actions have taken place by Rambus and its counterparts both in U.S. and European courts, the Infineon dispute is widely seen as the one that will make or break Rambus' claims. For example, in November 2001 a U.S. District Court postponed a lawsuit by Hynix pending the resolution of the Rambus appeal against Infineon, which was ongoing at the time.

Rambus also develops a memory interface called Direct Rambus DRAM. Rambus hasn't filed any legal claims related to that technology's licensing.

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Copyright © 2003 IDG Communications, Inc.

  
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