Judge dismisses suit against Infineon, Rambus to appeal

Judge dismisses suit against Infineon, Rambus to appeal
SAN MATEO, Calif. — Rambus Inc. plans to appeal a judge's ruling that dismissed the company's patent infringement lawsuit against DRAM vendor Infineon Technologies AG. The company said the decision was a step backwards for the rights of intellectual property holders. However, industry observers said that the case was never about intellectual property, and questioned whether the company has grounds to pursue an appeal.

U.S. District Judge Robert Payne announced on Friday (May 4) that he was granting a motion by Infineon to throw out all three remaining claims in the case. Earlier in the week, he dismissed 54 other claims out of the 57 violations Rambus originally asserted in the case against Infineon that was filed in August of last year.

"Rambus does not look like it's in very good shape on its patent claims," said David Balto, a Washington attorney and former policy director of the Federal Trade Commission's Bureau of Competition. "When it comes to the antitrust counter-claims, [they are going to be] the final straw that breaks the camel's back. The judge's decision dismissing the claims seems pretty sound."

Judge Payne also dismissed a key Rambus claim that Infineon had willfully infringed Rambus' SDRAM patents. Rambus alleged in its original complaint that Infineon had "actively induced" infringement of its SDRAM patents obtained in September 1999.

"We are disappointed with the court's decision and plan to appeal the ruling," said Geoff Tate, chief executive of Rambus. "If today's decision is allowed to stand, all companies that innovate risk having their intellectual property rights unjustly expropriated."

This case is just one of several cases in which Rambus is involved, against Infineon as well as Hyundai Electronics and Micron Technology Inc.. Rambus is best known for developing a proprietary, high-speed interface that is used in Rambus DRAM devices. However, last year the company took a new tactic by asserting that the RDRAM interface contains patented technology that is also used in standard SDRAM. This allowed Rambus to claim that SDRAM designs violated their patents, and the company sued for royalties.

While some companies, notably DRAM giant Samsung Semiconductor, agreed to pay royalties on SDRAM chips, Infineon, Hyundai and Micron have fought these claims. This case is the first that has reached any type of resolution.

Richard Gordon, principal memory analyst for market research house Gartner Dataquest (San Jose, Calif.), said that the case was never about SDRAM patents at all. "Rambus used this case as a club, to try and force the memory industry to adopt RDRAM," he said. The company's main business is garnering royalty payments for vendors that produce RDRAM, but to date the RDRAM technology has not become the dominant flavor of memory.

While Intel Corp. is a major backer of the technology, most PC OEMs have been reluctant to shift their entire product lines over to RDRAM-based designs, primarily because the parts are much more expensive than either SDRAM or its newer, faster cousin, double-date-rate (DDR) SDRAM. Gordon said that Rambus has been trying to push the market to adopt RDRAM faster. "By making it uneconomical to use SDRAM or DDR DRAM, they were hoping that people would be more willing to use RDRAM."

Now it appears that the strategy has backfired. Not only has the market been slow to shift to RDRAM, the company's tactics have angered many of the key players in the industry. Even Intel is developing new chip sets that link its flagship Pentium 4 microprocessor to SDRAM components, while previously it was supposed to work only with RDRAM. While Intel still insists that it is backing Rambus, it is unclear now whether customers will adopt the technology or look for Pentium 4 chips with SDRAM memory.

"The market has been fairly stubborn in its resistance to Rambus, because they didn't like paying them royalties," said Gordon. "Rambus has been fairly arrogant, and at the eleventh hour they shot themselves in the foot with these legal tactics."