Bloomberg News

Rambus Gets Review of Patent Case Over LSI, STMicro Chips

May 03, 2012

Rambus Inc. (RMBS:US)’s loss in a patent- infringement case against LSI Corp. and STMicroelectronics NV (STM) over high-speed memory chips will be reviewed, a U.S. trade agency said.

The U.S. International Trade Commission said today it will review “in its entirety” a finding by one of its judges that the companies didn’t violate Rambus’s patent rights. The six- member commission in Washington is scheduled to announce its decision July 2 and has the power to block imports of products that infringe U.S. patent rights.

Rambus, the recipient (RMBS:US) of royalties from patents it says cover the fundamentals of computer-memory chips, seeks to extend its intellectual-property enforcement to communication devices and electronics. The Sunnyvale, California-based company has been fighting in court for a decade over chips used in personal computers.

The dispute in this case centers on a type of dynamic random access memory called SDRAM that acts as the main memory in computers. Rambus said its inventions speed the transfer of data. The memory controllers are used in networking gear, televisions, set-top decoders and other devices.

LSI, based in Milpitas, California, and Geneva-based STMicro denied infringing the patents and challenged their validity. The complaint also names customers of the three chipmakers, including Asustek Computer Inc. (2357), Cisco Systems Inc. (CSCO:US), Garmin Ltd. (GRMN:US), Hewlett-Packard Co. (HPQ:US) and Seagate Technology Plc. (STX:US)

Patents Found Invalid

Broadcom Corp. (BRCM:US) and Nvidia Corp. (NVDA:US) were part of the original case before they settled all pending litigation. Rambus had also won an earlier case at the ITC against Nvidia, which makes graphics processors, that was on appeal before the settlement.

ITC Judge Theodore Essex found all five Rambus patents invalid in March, saying they sought to cover inventions already protected by other patents and publications. Rambus argued that the findings were the result of the judge “ignoring or misunderstanding key legal and factual issues” concerning what others in the chip industry knew in the mid-1990s when Rambus began its research.

Essex had found that the companies infringed the patents. “While the respondents in this matter challenged several aspects of Judge Essex’s findings, they did not challenge the findings that their products infringe” the patents, Rambus said in a statement.

‘Shred Days’

The judge said separately that three patents, known for lead inventor Richard Barth, are unenforceable because Rambus purposefully destroyed evidence needed by companies to defend themselves against Rambus’s infringement claims.

Rambus, in its statement, said it was encouraged by the commission’s decision to review that issue, since Essex’s determination “contradicts an earlier decision, involving the same patents, that Rambus’s document-retention practices did not prevent Rambus from enforcing those patents.”

The company’s document policy, which evidence showed included “shred days” in 1998, has been an issue in the civil cases through the company’s legal fights. Nvidia lost its argument on that issue.

Destroyed-Documents Ruling

A U.S. appeals court ruled last year that Rambus destroyed documents relevant to patent-infringement trials with Micron Technology Inc. (MU:US) and Hynix Semiconductor Inc. Federal judges are considering what the appropriate punishment should be in those cases, including whether Rambus should be barred from enforcing the patents against Hynix and Micron.

In the ITC case, Rambus argued that the appeals court decision shouldn’t apply because different patents were involved. The Barth patents, it said, hadn’t even been issued when the company’s document-destruction policy was in place. Essex disagreed, saying that the 1998 “shred days” weren’t targeting just information on issued patents.

“Their action in destroying documents was intended to frustrate the fact-finding efforts of parties adverse to Rambus,” the administrative law judge said in his report. “While the Barth patents may not have been mature, they were part of a long-term strategic litigation plan.”

Rambus argued that, even if some documents were destroyed, there was no harm to the companies because “the allegedly destroyed documents are irrelevant, still exist, or were redundant of retained documents.”

The case is In the Matter of Certain Semiconductor Chips and Products Containing Same, 337-753, U.S. International Trade Commission (Washington).

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net;

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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Companies Mentioned

  • RMBS
    (Rambus Inc)
    • $12.07 USD
    • -0.02
    • -0.17%
  • CSCO
    (Cisco Systems Inc)
    • $25.65 USD
    • -0.06
    • -0.23%
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