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Rambus busy with lawsuits, deal

The international saga that is Rambus continued this week as the company filed lawsuits in Europe against Hyundai and Micron and signed a licensing deal with NEC.

The international saga that is Rambus continued this week as the company filed lawsuits in Europe against Hyundai and Micron and signed a licensing deal with NEC.

Rambus filed four lawsuits this week: two separate suits in Germany against Hyundai and Micron in Germany and two similar actions in France. Along with the four lawsuits, Rambus has also filed a complaint with the U.S. International Trade Commission to bar the importation of certain Hyundai memory chips into the United States. Both Micron and Hyundai filed lawsuits against Rambus in U.S. courts late last month.

By contrast, Rambus has come to an amicable agreement with NEC. Under the terms of the licensing deal between the two companies, NEC will effectively pay the type of royalties being sought in the lawsuits. The two companies will also work together to develop faster versions of Rambus memory.

The lawsuits, like other recent suits involving Mountain View, Calif.-based Rambus, revolve around patents filed by the company starting in April 1990. Those patents eventually formed the basis for RDRAM, the high-speed memory based on designs from Rambus. Micron, among other memory manufacturers, has taken out a license to manufacture RDRAM.

Rambus, however, says that the patents also give it a legitimate claim to royalty payments for the production of SDRAM, the standard form of memory found in computers today, and of DDR DRAM, a high-speed form of memory that competes against memory based on designs from Rambus. In many instances, the memory manufacturers likely were unaware that any royalty claim existed until after the fact, Rambus executives have acknowledged.

Because of the vast amount of memory produced in the past decade, the claim for royalties, if upheld by the courts, could exceed $1 billion, some analysts have estimated.

Rambus is clearly trying to squelch the popularity of DDR DRAM. Like other memory makers that have settled with Rambus, NEC will pay Rambus a higher royalty rate when it manufactures DDR DRAM chips than when it makes RDRAM chips. Again, as in the other licensing deals, the royalty attached to SDRAM will be lower than the RDRAM royalty.

Along with NEC, Toshiba, Hitachi and Oki Electric have agreed to out-of-court settlements with Rambus. All of the companies will make undisclosed royalty payments to Rambus. The company also has filed an action against Infineon, a memory spinoff of Siemens.

Micron filed its suit last month in U.S. District Court in Delaware, accusing Rambus of enforcing patents that are invalid. Micron further asserted that it has not infringed any Rambus patents, declaring them unenforceable.

Although analysts have offered varying opinions on the validity of Rambus' claim, Micron's behavior could become a bellwether, Peter Glaskowsky, an analyst with MicroDesign Resources, said last month.

"Micron has always been one of the more litigious memory vendors," he said. "If Micron ends up capitulating eventually, there would be very few companies left that would attempt to fight Rambus on this subject."

Rambus' new suits against Hyundai and Micron in Germany are slated to go to trial in February 2001, according to Rambus. No estimated trial date was given for the French lawsuits.