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Rambus wins $306 million from Hynix

In its patent infringement case, a jury backs Rambus. More legal action to follow.

Rambus has beaten Hynix Semiconductor in its patent infringement case, with a court ordering its rival to pay $306.5 million in damages.

A jury found that Hynix had infringed 10 of Rambus' patents in a verdict announced on Monday in U.S. district court in San Jose, Calif. The award covers compensation for Hynix sales in the United States between June 2000 and the end of 2005, according to a Rambus statement. Hynix may also have to pay interest on the amount awarded in the verdict.

The verdict will likely send shivers through a PC industry already skittish about patent lawsuits. It will also likely prompt the settlement of similar suits.

Memory designer Rambus had alleged that Hynix and other large memory manufacturers infringed its 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.

"I'm sure it is going to prompt more settlements and more suits," said Richard Belgard, a patent expert in Silicon Valley.

In the next phase of the trial, starting this summer, Rambus will seek an injunction barring Hynix from selling DDR, DDR2 and SDRAM. Rather than face an injunction, defendants often agree to pay additional amounts to the plaintiffs through a license.

Rambus specializes in designing interfaces and components such as memory for rapid data transfer. The jury upheld all of Rambus' patent claims from its technology.

Some memory makers have claimed that Rambus obtained its patents through fraud. That argument, so far, has not been greatly successful in court. Infineon emerged victorious in a case against Rambus at the trial level, but the decision was largely reversed on appeal. Infineon eventually settled by paying Rambus about over a two-year period.

Rambus currently has suits pending against Samsung Electronics, Nanya Technology and Micron Technology.

The verdict, though, could prompt Rambus to file even more lawsuits. PC makers and others who incorporated DDR into their products are potentially liable. Graphics chipmakers, which insert a type of memory called GDDR into their products, could also get a call from the Rambus legal department. Some have estimated that the royalties and damages from the patents could total to about $1 billion or more.

Others have estimated that Rambus, if ultimately successful on all fronts, will get $1 or slightly more for every PC sold in a 10- to 15-year span.

The lawsuits and the status of the patents have been a hot-button issue in Silicon Valley for years. The company, which has a staff of about 230, was founded by back in the 1990s. It concentrated on products that would solve the problem of memory latency, or the time it takes data to go from the memory to the processor, and vice versa.

Sony and some other Japanese electronics manufacturers adopted Rambus memory for their products, but the chip designer's big breakthrough came when Intel announced that it would standardize its chipsets and processors to work with Rambus. Memory makers grumbled at the decision because it would mean that they would have to pay royalties on all of their chips. Memory makers also didn't like the idea of having a small company dictate the industry road map.

Memory based on Rambus' designs proved more difficult to make than expected, and PC makers and memory makers veered toward DDR memory, which didn't require a royalty.

The lawsuits started in 2000. The memory makers filed suits, but Rambus counterclaimed.

"We are very pleased with today's result--and very thankful for the considered attention of the jury and the court in this lengthy trial," John Danforth, a general counsel for Rambus, said in a prepared statement.