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Court decision favors Rambus

A federal judge overturns two counts of fraud against the chip designer and grants a new trial in its patent case against German chipmaker Infineon.

A federal judge overturned two counts of fraud against chip designer Rambus and granted a new trial in the company's patent violation case against German chipmaker Infineon.

Judge Robert E. Payne of the U.S. District Court of the Eastern District of Virginia late Thursday overturned two counts in a jury decision that found Rambus guilty of fraud in its conduct relating to an industry group that sets memory standards.

But the court granted Infineon's request to prohibit Rambus from pursuing further litigation regarding Infineon's SDRAM memory and ordered Rambus to pay $7.1 million in Infineon's legal fees.

Rambus said Friday that it will appeal that ruling.

The latest decisions come as the result of a patent infringement lawsuit filed by Rambus against Infineon last year. Rambus sued Infineon, claiming that the DRAM manufacturer's synchronous dynamic RAM and double data rate SDRAM technologies violate Rambus patents. Rambus also sued, but later settled with Hitachi, Toshiba and other companies in similar cases of patent violation.

Infineon argued in a countersuit that Rambus secretly incorporated certain ideas put forth in meetings of the Joint Electronic Devices Engineering Council for technologies used in SDRAM and DDR SDRAM into its patents. The JEDEC is an industry standards body charged with creating, among other things, standards and specifications for memory technology.

Infineon accused Rambus of pilfering technology used in SDRAM and DDR SDRAM from JEDEC and writing that technology into its patents.

Rambus argued that it's the other way around and that JEDEC-compliant SDRAM and DDR SDRAM technologies contain two elements covered by patents it filed in 1990.

Last May, a jury in the Virginia trial found Rambus guilty of fraud and regarding DDR SDRAM ordered the company to pay punitive damages of $3.5 million. Rambus had said it would appeal the decisions.

"We are pleased that the record has been set straight on DDR SDRAM," Geoff Tate, Rambus' CEO, said in a statement released on Friday. "However, Rambus still intends to appeal the patent infringement case and the jury verdict on Rambus' behavior at JEDEC with regards to SDRAM."

"We aim to conclusively prove that Infineon is violating Rambus' patent rights and that Rambus must be justly compensated by Infineon for the use of our patents," he said.

Rambus does not accuse Infineon of intentionally infringing on its patents. Instead, it argues that the open design specifications for SDRAM and DDR SDRAM necessarily impinge on the Rambus patents. Therefore, it argues that any chipmaker that has produced or will produce either type of memory should pay Rambus royalties.

Several other companies, including DRAM makers Hitachi and Toshiba, agreed to pay Rambus royalties, settling suits brought against them by the company. Toshiba, for example, agreed to pay royalties for both SDRAM and DDR SDRAM.

Analysts say that even establishing claims to just DDR SDRAM could be very lucrative. Rambus revealed during the Infineon trial that it charges royalties of 3.5 percent on DDR SDRAM and 0.75 percent on SDRAM.

"While today DDR is a very small percentage of the market...it is very likely, almost inevitable, that over the next two years those two technologies are going to flip-flop and DDR is going to become a very large percent (of the market) and SDRAM will start to fade," said Nathan Brookwood, principal at market research firm Insight64.