July 18, 2006, 12:52 PM — A U.S. judge has ruled that a $306.9 million damage award to Rambus Inc. is unjustifiably high and said that Rambus can either accept a reduced $133.5 million award or go to trial again.
In an order filed Friday, Judge Ronald Whyte agreed with Hynix Semiconductor Inc. that damages awarded by a jury were excessive in a patent infringement suit Rambus filed against Hynix. The calculation of damages was not properly adjusted to take into account various factors, Whyte ruled, and should not be allowed to exceed licensing agreement royalty rates.
Hynix filed a motion for a new trial in the case after a jury found the South Korean semiconductor company guilty of violating Rambus computer memory patents. The case is being heard in the U.S. District Court for the Northern District of California.
In the damages phase of the trial, Rambus expert David J. Teece, a professor at the Haas School of Business at the University of California, Berkeley, testified regarding appropriate royalty rates and said that the rates he proposed were conservative. He further testified regarding royalty rates for "revolutionary technologies."
However, Judge Whyte found that evidence was not introduced in that phase of the trial that offered guidelines or a basis for adjusting for the nature of Rambus' inventions and that it was speculation that the patents involved in the lawsuit represent "revolutionary technology." The jury could have "reasonably concluded," based on testimony, that royalty rates could have been adjusted upwards, Whyte said in the ruling.
Whyte ruled that, while Teece's rates were conservative, the record of the case supports an award of about $133.5 million.
If Rambus accepts that reduced jury award it can avoid the new trial Hynix seeks because of the jury's damage award. Rambus, based in Santa Clara, California, has 30 days from July 14 to accept the reduced award or there will be a new trial.
Representatives of Hynix and Rambus could not immediately be reached for comment.
