Rambus Memory Lawsuits Enter Court

Memory systems designer Rambus is about to enter court for the first of several lawsuits that could eventually lead to higher prices for RAM memory.

On Monday, Rambus and Infineon Technologies are scheduled to make opening remarks in a Virginia courtroom in the first of several patent infringement lawsuits filed by Rambus against computer memory manufacturers.

The lawsuits against Infineon and several other chip makers were sparked when the companies refused to pay licensing revenues to Rambus for patents the company holds relating to SDRAM--the most common type of computer memory used in desktop and notebook computers today. Rambus started demanding payment for the patents in early 2000, when chips based on its own competing memory technology, Rambus DRAM, were not yet in production.

Paying for Standards

It initially faced strong resistance from many major semiconductor manufacturers that resented being asked to pay--not because they disputed the patents held by Rambus but because the SDRAM specification was developed under the auspices of the Joint Electron Device Engineering Council, a group established in 1960 to create industrywide technical standards for components to ensure that products from different manufacturers work together.

Until it began demanding licensing revenues, Rambus's patents were included in the DRAM patent pool and available royalty-free to any company wanting to produce DRAMs.

Despite the initial resistance, companies began signing licensing deals with Rambus, led by Toshiba, which signed the first deal in June 2000.

Among the major chip makers, there are now three holdouts, all on Rambus's hit-list: Infineon, Micron Technology, and Hynix Semiconductor, formerly Hyundai Electronics Industries.

Delays Upon Delays

Rambus originally anticipated that many of its lawsuits would be over by now, but as one gets postponed, the others get knocked back as well. And the ongoing legal challenges are having an adverse effect on the company's bottom line.

The company is currently suing Infineon, Micron, and Hynix in Germany, and Micron in Italy; the latter suit is expected to go to trial in a few weeks following expert testimony next month.

In the United States, Rambus expects the Virginia trial against Infineon to finish around the middle of next month, while its patent infringement case against Micron in Delaware is scheduled to begin in October. There is currently no date set for the company's lawsuit against Hynix in California, but Rambus expects the trial to take place during the first half of next year.

At stake in the cases is not just Rambus's future, but the pricing policy of a whole memory sector, according to market watchers.

"If Rambus loses, it will be much more of a free market," says Dean McCarron, principal analyst at Mercury Research. "And if [Infineon] loses, it will mean higher prices for components," which could eventually mean higher prices for consumers.