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Rambus patent infringement trials put on hold

Shares of the memory chipmaker plunge after a federal judge postpones indefinitely the long-running cases filed against a slew of memory makers.

A U.S. federal judge on Tuesday postponed indefinitely the coordinated patent infringement cases filed by Rambus against a collection of rival memory chipmakers.

The cases were scheduled to go to trial later this month.

Judge Ronald M. Whyte of the U.S. District Court for the Northern District of California issued an order indefinitely postponing the long-running cases against Hynix Semiconductor, Micron Technology, Nanya Technology, and Samsung Electronics, pending appeals of earlier court decisions.

Shares of Los Altos, Calif.-based Rambus, which licenses technology for high-speed memory architectures, plunged 22 percent in after-hours trading, or $2, to $6.95.

The defendants had argued for the delay after Judge Sue L. Robinson, in the U.S. District Court in Delaware, ruled on January 9 that evidence "spoilation" occurred when Rambus allegedly destroyed important information related to the case that could be used against it. Robinson's decision rendered Rambus' patents unenforceable.

The lawsuits, which were filed in 2000 and scheduled to go to trial on February 17, allege that the defendants infringed Rambus patents in producing DDR DRAM--the most common type of memory in PCs today--as well as in making SDRAM and DDR2 DRAM. The vast majority of PCs and servers produced in the past several years use one of these types of memory, and variants of DDR are expected to be incorporated into PCs for the next several years.

The defendants had previously argued that Rambus' patents were invalid because the company failed to disclose that it held patents on memory technology while it was a member of a standards-setting organization that was developing SDRAM standards in the 1990s. Rambus claimed that the rules of that group didn't specifically require the company to disclose its patents and that it never proposed that the standard incorporate its technology.

In a statement, Micron general counsel Rod Lewis applauded the ruling. "We are pleased that Judge Whyte recognized that the Delaware Court's unenforceability ruling impacts the patents asserted by Rambus in the California matter, and that he stayed Rambus' patent case against Micron," Lewis said. "We believe that Judge Robinson's thorough decision will be upheld on appeal."

Rambus, which has argued that Robinson's ruling conflicted with an earlier ruling by Whyte that found Rambus had not destroyed evidence, expressed optimism that its case would be well received on appeal.

"While we are disappointed with the stay of the coordinated cases, it is our expectation that the conflicting opinions of the district courts regarding document spoilation will go up together on appeal," Tom Lavelle, Rambus general counsel, said in a statement.