Rambus Lawsuit Under Attack
Shares of Rambus Inc. sank 15% on Tuesday after memory-chip maker Infineon Technologies -- repeating allegations that the chip design company had destroyed evidence -- sought to dismiss a patent-infringement lawsuit.
Infineon said Rambus had improperly destroyed documents related to the company’s strategy to win more royalties. The dismissal motion was made Dec. 13 and made public Tuesday.
U.S. District Judge Robert Payne in Richmond, Va., has supported Infineon on other points in the case and threw out the patent claims once already, only to have them revived on appeal. Los Altos, Calif.-based Rambus claims its patents cover key aspects of all memory chips made in the $16.7-billion industry. Infineon is among the memory-chip makers contesting the patents.
“That judge has consistently ruled against Rambus and for Infineon,” said Erach Desai, an analyst at American Technology Research in Greenwich, Conn.
Payne in March sided with Germany’s Infineon, saying Rambus’ document destruction was improper. He ordered Rambus to give information it contends was protected by the attorney-client privilege as punishment.
An appeals court upheld that finding in August. Rambus continues to evade that order, Infineon said.
Rambus spokeswoman Linda Ashmore declined to comment.
Shares of Rambus dropped $3.85 to $21.50 on Nasdaq. The stock had lost 17% of its value this year before Tuesday.
“Time and again, Rambus destroyed or concealed critical documents and then capitalized on its misdeeds by testifying falsely about the subjects addressed in the missing evidence,” Infineon said in the motion. “Rambus has not only hindered Infineon’s defense of Rambus’ patent infringement claims, but also jeopardized the very integrity of the judicial process.”
The Federal Trade Commission, which has accused Rambus of seeking to control the patent rights to the industry standard for high-speed computer memory chips, also says Rambus illegally destroyed documents.
In that case, a judge found there was no evidence that any of the documents that were destroyed were relevant, Rambus General Counsel John Danforth said at a meeting with analysts in New York on Nov. 17.
About 10,000 pounds of documents were destroyed, according to the FTC. That amount was “not a lot” and represented about two trash cans per employee per month, Rambus lawyer Gregory Stone said during arguments on Dec. 9.
If the Infineon case is dismissed, Rambus can take it to the U.S. Court of Appeals for the Federal Circuit in Washington.
The court, which specializes in U.S. patent law, revived Rambus’ suit against Infineon in January 2003 after Payne dismissed it the first time.
