Rambus Loses Key Ruling in Patent Battle

Shares of Rambus Inc. fell 20% on news the computer chip designer lost a crucial round in its legal fight to enforce patent claims that could generate $1 billion in royalties. A federal judge in Virginia dismissed Rambus’ allegations that German chip maker Infineon Technologies infringed patents for chip designs that help accelerate the speed of video game consoles and personal computers. The ruling represented a significant setback for Los Altos, Calif.-based Rambus, which is pursuing a dozen patent infringement claims against Infineon, Hyundai and Micron. The chip makers are suing Rambus for breach of contract and seek to invalidate Rambus patents. Investors reacted swiftly to the news, released shortly before the stock market closed for the week. Nasdaq temporarily halted trading in the stock. When trading resumed, shares plunged $3.55, or 19.6%, to close at $14.60. Rambus intends to appeal.