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Hot-button Rambus-Infineon trial delayed

The trial--expected to have substantial repercussions in the memory industry--is delayed a week by a federal district court to allow for further discovery.

A federal district court has delayed the start of the patent-infringement trial pitting memory designer Rambus against German chipmaker Infineon for a week to allow further discovery.

The case, which is being heard in the U.S. District Court for the Eastern District of Virginia, will now start April 17 rather than April 10, a Rambus representative confirmed.

The intensely scrutinized trial--which has generated "insane" public reaction, according to one of the trial attorneys--is expected to have substantial repercussions in the memory industry. Rambus claims patents it owns allow it to collect royalties from memory manufacturers that produce SDRAM, the most common form of memory in computers today, and DDR DRAM, a high-speed successor now coming to the market in volume.

The claim, if upheld, could be worth billions, analysts estimate.

Infineon disputes the claim. If the German chipmaker wins, it could lead to court victories for Micron and Hyundai, two other memory makers legally wrangling with Rambus. A number of memory companies have settled with Rambus, but the payments secured by those agreements could plummet if Rambus loses, Rambus executives have said.

As a result, Rambus' stock has been ricocheting madly since the trial began. It dropped more than 30 percent one day and then recovered a lot of lost ground the next. Some news sites and Internet postings have followed minute developments in the trial.

"The Internet has been crazy with the trial," John Desmarais, the lead trial attorney for Infineon, said in a recent pretrial hearing. "Some days it's really insane stuff for Rambus. Other days it's for Infineon. And the comments that get on there are so off the wall sometimes."

District Court Judge Robert Payne said his secretary finally unplugged the office phone on one occasion to stop incoming calls from Rambus-watchers trying to find out a ruling on a motion.

Some of the comments, Payne said, "were really somewhat horrible, accusing the court staff of leaking things and causing people to lose money, and all that kind of thing."

One of the major issues in the case revolves around Rambus' conduct while it was a member of the Joint Electronic Devices Engineering Council (JEDEC).

Secret Squirrel, Mix Master and Deep Throat
Rambus was a member of JEDEC's memory committee, which eventually approved SDRAM and DDR DRAM as standard memory architectures. Rambus did not disclose the existence of its potential patent claims, as required by the group's bylines, and later left the group.

To Infineon, that constitutes fraud. In a recent pretrial hearing, Infineon's attorneys said that after Rambus left the JEDEC memory committee, an informant--alternately called "Secret Squirrel" and "Mix Master"--on the committee fed Rambus information on JEDEC hearings. The company then used the information to tailor its patent applications for maximum value.

"Mix Master and Secret Squirrel, it will be our contention, are Mr. Crisp's (former Rambus employee Richard Crisp) source, one of Mr. Crisp's sources of monitoring JEDEC after Rambus left," asserted John Desmarais, attorney for Infineon.

A source called Deep Throat also allegedly forwarded information.

David Pendaris, an attorney for Rambus, said, "Mr. Crisp testified that one of the most bizarre experiences of his life was receiving these e-mails."

Secret Squirrel was the name of a Hanna-Barbera cartoon character. He wore a trench coat and flew around in a spaceship with a sidekick called Morocco Mole.

In its defense, Rambus denies that its silence while in the JEDEC constitutes fraud. Infineon and many other memory manufacturers, the company asserts, knew about Rambus' potential intellectual-property claims.

"Before we even filed our first patent application, we signed (a nondisclosure agreement) with them. Then we met with them. And we gave them our technical descriptions," said David Monahan, another Rambus attorney.

The company also has pointed out that JEDEC bylaws don't prevent companies from collecting royalties.