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Patent lawsuits mount against Rambus

Hyundai joins Micron Technology in going to court to challenge the chipmaker's patents on memory chip technology.

Hyundai has joined Micron Technology in going to court to challenge Rambus patents on memory chip technology.

The Korean chipmaker, like Micron, filed suit yesterday, pre-empting any legal action from Rambus. Rambus, which developed a high-speed memory interface and has a variety of patents on memory chip technology, has been seeking to force memory chipmakers to pay a license fee, not only for the Rambus memory standard but also for standard memory.

"We believe (Rambus' patents) are invalid," said Jerry Olson, Hyundai's director of corporate affairs. "They were making demands for royalty payments."

Rambus has already gotten memory makers Hitachi, Oki and Toshiba to agree to pay license fees for standard SDRAM memory and Double-Data Rate (DDR) memory. Rambus also has sued Siemens spinoff Infineon.

Unlike Micron, which also filed suit yesterday, Hyundai is only seeking to invalidate Rambus' patents. Micron also is alleging that Rambus has violated federal antitrust laws.

Rambus said in a statement that it had initiated negotiations with Hyundai to license the use of Rambus' intellectual property for use in standard and DDR memory.

"In contrast to Rambus' preference to negotiate and settle amicably, Hyundai abruptly cut off further discussion with the commencement of litigation," Rambus said. "Rambus is preparing a response to Hyundai's allegations."

As with the Micron case, Rambus said it expects to prevail and "to be fairly compensated" for its intellectual property.

"I think it's a question of sue or be sued," said Morgan Stanley Dean Witter analyst Mark Edelstone, a longtime Rambus supporter.

"The real issue is, are these patents valid? That's going to be settled in the courts, and the onus is going to be on" the memory chipmakers, he said.

Rambus' primary business has been licensing its own technology for its next-generation PC memory, so-called RDRAM. But adoption of the high-speed memory design has been limited by technical hurdles and high costs.

The company has made it clear in recent months that it also will seek license fees on non-Rambus memory.

"It's a game of high-stakes poker," Edelstone said. "But that's nothing new for Rambus."

MicroDesign Resources analyst Peter Glaskowsky said he thinks that in the long term, the memory makers will settle. "It may be part of a negotiating tactic: 'We don't have to pay you what you ask; we could prevail in court.'"

Glaskowsky has said that Rambus has fundamental patents on technology used in existing SDRAM, such as having a "control register on a memory chip that controls how the memory chip connects to the system. That's found in every SDRAM that's ever been made for the PC industry."

The company also has patents covering aspects of future memory technologies such as DDR, Glaskowsky said.