Chip patent holder wins monopoly suit

Rambus Inc. scored a key victory Wednesday in its nearly decade-old fight with memory chip makers when a jury found that the company did not engage in monopolistic behavior by patenting technologies that eventually became standard in memory chips.

Shares of the Los Altos, Calif.-based company shot up $7.25, or nearly 39%, to $25.86 during regular-session trading on the news. They gained an additional $1.02 after hours.

The jury’s decision could help Rambus as it tries to collect millions of dollars in royalties on patents some of the biggest memory chip makers claim were fraudulently obtained.

However, Rambus still faces major court battles over those patents, including its attempt to overturn a 2006 Federal Trade Commission ruling that the company deceived a standards-setting committee and created a monopoly in the memory chip industry.

After a seven-week trial, a jury in U.S. District Court in San Jose decided Wednesday in Rambus’ favor on all three counts it was deliberating, according to Thomas Lavelle, Rambus’ general counsel.

In the lawsuit, originally filed in 2000, chip makers Micron Technology Inc., Hynix Semiconductor Inc. and Nanya Technology Corp. argued that patents held by Rambus for key technologies now included in their chips should be considered invalid. And they said they shouldn’t have to pay royalties to Rambus.

The companies say Rambus engaged in illicit behavior in filing the patents for technologies used in DRAM, or dynamic random access memory, the most common memory chips used in personal computers.

The FTC found Rambus deliberately withheld information from the Joint Electron Device Engineering Council (JEDEC) when the council was developing technical standards for the computer memory industry.

The FTC found that Rambus concealed information about which patents it had secured or knew it would be able to secure.

Under standards adopted by the council, other companies hoping to use the technology would either have to buy expensive licenses from Rambus or infringe its patents.

Rambus officials acknowledged hurdles remained before it could collect royalties.

Lavelle said manufacturers had turned the issue of Rambus’ dealings with JEDEC “into a cause celebre, saying we behaved improperly and illegally. This jury found that’s not the case.”

Micron said it would appeal.