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Top Court Rejects Infineon Appeal Versus Rambus
 10/06/2003 WASHINGTON (Reuters) - The U.S. Supreme Court rejected on Monday Infineon Technologies AG's appeal of a ruling that threw out its fraud charges against Rambus Inc. and reinstated Rambus' claim that Infineon infringed its computer chip patents. Without any comment, the justices declined to review a U.S. appeals court ruling that the evidence did not support the jury's finding that Rambus committed fraud while pursuing patents for high-speed chips that became an industry standard. The appeals court also revived Rambus's patent-infringement claim against Infineon, sending the case back to a federal district court in Virginia for reconsideration because it failed to properly define certain technical terms. Rambus, based in Los Altos, California, makes memory chip acceleration technology that virtually all of the world's big computer chip makers license. The news sent Rambus stock up 37.75 percent to $25.80, making it the biggest percentage gainer on the Nasdaq market. It was trading at $26.20 in after-hours. "The Court's ruling today clears the way for our infringement case against Infineon," Rambus General Counsel John Danforth said in a statement. Officials of Germany's Infineon were not immediately available for comment. Mike Crawford, an analyst at B.Riley & Co., said the appeals court ruling in Rambus' favor will now be applied to the Infineon infringement case and pending cases involving Micron Technology Inc., Hynix Semiconductor Inc. and an anti-trust claim from the Federal Trade Commission. "In our opinion ... Rambus will be successful in proving infringement," he said. The litigation is key to Rambus, whose double data rate technology represents about 80 percent of the $16 billion dynamic random access memory market, said Crawford. "The annualized royalty rate, assuming it can be enforced and collected, is almost $450 million." Infineon and some other technology companies have accused Rambus of tricking computer-chip makers into adopting technologies for which it held or was seeking patents. After Rambus sued Infineon for patent infringement, Infineon filed a counter-suit claiming Rambus fraudulently obtained patented ideas in the course of an industry standards setting process in the early 1990s. The district court rejected the patent-infringement claims, and a jury found Rambus had committed fraud. But the appeals court in January reversed the decision, ruling for Rambus. Infineon, represented by lawyer Kenneth Starr, the independent counsel who investigated then-President Bill Clinton, appealed to the Supreme Court, saying, "This case involves the future of the industry that makes all the memory chips found in virtually all the world's personal computers." The appeals court "violated basic principles of procedure" and the Constitution by reversing the jury on a factual question and ordering entry of judgment for Rambus on the fraud claims, he said. On the patent-infringement part of the case, Starr argued the appeals court was wrong to hold that an extrinsic dictionary definition, rather than the intrinsic specification, provides the presumptive meaning of a disputed term. Supporting Infineon's appeal were 15 states, various trade groups, including the Consumer Electronics Association, and several companies in the electronics, semiconductor and telecommunications industries, such as Micron. Infineon asked the Supreme Court to summarily reverse the appeals court ruling or set the case for full review. Closing arguments are scheduled for Wednesday in the FTC case against Rambus before an FTC administrative judge, he said. (Additional reporting by Elinor Mills Abreu in San Francisco) News Archive | |
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