Judge Throws Out Rambus Fraud Judgment

A U.S. district court Thursday set aside the May jury verdict in the Rambus vs. Infineon patent infringement trial, overturning two judgments of fraud against Rambus and ordering a new trial.

The original verdict found Rambus guilty of seeking patents on DDR (double data rate) SDRAM while participating in a technical-components standards-making body. It is just part of the post-trial legal wrangling that has marked Rambus' case against Germany's Infineon Technologies.

If Rambus prevails in its appeals and retains its patents, consumers might pay higher prices for chips, because DDR SDRAM manufacturers would owe royalties to the developer.

Rambus sued Infineon last year, claiming the company infringed on patent designs in manufacturing SDRAM and DDR SDRAM chips. Rambus had secured licensing deals with other chip makers, but Infineon, along with Micron Technology and South Korea's Hynix Semiconductor, refused to pay royalties.

Rambus lost its case against Infineon and received a double blow in the form of a $3.5 million fine in punitive damages for fraud. At that time, U.S. District Judge Robert E. Payne ruled that Rambus improperly obtained patents on chips that were being developed by the Joint Electron Device Engineering Council (JEDEC) while the company was participating in the group. The fine was later reduced to $350,000.

In its defense, Rambus claims the JEDEC's guidelines on participation are confusing and that other members flout the rules.

Rambus Plans More Appeals

As for Rambus' small victory Thursday, company Chief Executive Officer Geoff Tate says in a statement that the company is "pleased" that the U.S. District Court for the Eastern District of Virginia has set aside the jury's decision on the two counts of fraud. The company still plans to appeal the patent infringement case as well as the jury verdict on Rambus' behavior at JEDEC regarding 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," Tate says.

The court also rejected Thursday an Infineon motion to stop Rambus from pursuing litigation pertaining to Infineon's DDR SDRAM products. In a parallel ruling, the court prohibited Rambus from pursuing litigation in the U.S. regarding Infineon's JEDEC compliant SDRAM memory products. Rambus has suits currently pending against Infineon in Europe.

As long as Infineon's DDR SDRAM products comply with JEDEC standards, Rambus can't sue Infineon for selling the products, according to John Desmarais, an attorney for Infineon.

"The court found that Rambus defrauded JEDEC, and did it intentionally," Desmarais says. "Rambus is enjoined from ever suing Infineon again over the patents involved where Rambus defrauded JEDEC."

Rambus was also ordered by the court to pay $7.1 million in legal fees to Infineon, Desmarais notes.

The two companies are set to face off again at a later date on Infineon's turf in Germany. Rambus is suing Infineon in a German court, accusing it of infringing Rambus' European patents. Infineon hopes the verdict in the U.S. will help its case overseas.

"In the rulings that came out yesterday, the court in Virginia actually said that the German case was part of Rambus' fraudulent scheme," Desmarais says. "Hopefully the German court will recognize that and take it into account."