Supreme Court won't hear Rambus-Infineon case

The U.S. Supreme Court on Monday boosted Rambus Inc.'s almost four-year battle to collect royalties from makers of memory chips that the company says use patented Rambus high-speed memory interface technology in their products.

The nation's highest court denied a request to review an appeal's court decision that favored Rambus over Infineon Technologies AG, a Supreme Court spokeswoman said. Infineon is a Munich-based semiconductor maker that disputes Rambus' claims that it is entitled to collect the royalties in question.

The Supreme Court's denial thus upholds the U.S. Court of Appeals for the Federal Circuit's ruling, issued in January 2003, and sends the case back to the lower court for a new trial, a spokeswoman for Los Altos, California-based Rambus said Monday.

"Today's rulings help substantiate the importance of our past inventions and allow us to continue our focus on technology leadership," said Geoff Tate, Rambus' chief executive officer, in a statement.

Infineon said it will be ready for the new trial. "It is regrettable that the Court will not hear arguments in these matters, despite the evidence presented in the appeal and the separate briefs filed with the Court by representatives of commercial organizations and 15 states. The case now will be decided, again, by jury trial in the Federal Court for Virginia and we intend to vigorously pursue a full and fair resolution," Infineon said in a statement e-mailed to IDG News Service.

In May 2001, the lower court -- the U.S. District Court for the Eastern District of Virginia, in Richmond -- threw out all Rambus claims of patent infringement against Infineon related to SDRAM (synchronous dynamic random access memory) and DDR SDRAM (double data-rate SDRAM). This decision was a response to the lawsuit Rambus had filed against Infineon.

That court also found Rambus guilty of fraud for obtaining patents on chip designs standards which were being developed at the time by the memory standards group JEDEC (Joint Electron Device Engineering Council), of which Rambus was a member, and fined the company US$3.5 million. This decision was in response to an Infineon countersuit.

In Oct. 2001, the lower court later refined its decisions on the Infineon countersuit, reducing the fraud fine to $350,000 and determining that Rambus had committed fraud with regards to SDRAM but not with regards to DDR SDRAM. The lower court also forbid Rambus from pursuing litigation in the U.S. against Infineon's JEDEC-compliant SDRAM memory products.

The lower court's actions were a blow to the crusade Rambus had launched in early 2000 to collect royalties from its SDRAM and DDR SDRAM patents.

However, the appeals court's decision in January 2003 deflated Infineon's victory by confirming the breadth of Rambus' patent claims, which the lower court had narrowed, and determining Rambus had committed no fraud.

Infineon's attempt to have the lower court's decision restated died Monday when the Supreme Court refused to review the appeals court's decision. Now Rambus' patent infringement claims will be retried at the lower court, the spokeswoman for Rambus said. Infineon's fraud allegations will not be retried, because the fraud verdict was reversed by the appeals court, she said.

However, Rambus is still not out of the water on the JEDEC fraud allegations. The U.S. Federal Trade Commission (FTC) has charged the company with deceiving the JEDEC to profit from licensing fees. That case is being heard by an FTC administrative law judge. Oral closing arguments on that case are scheduled for Wednesday, the Rambus spokeswoman said. FTC administrative law judges are independent, but work for the commission. Decisions by the administrative law judge may be appealed by either side to the full Commission and the Commission's decision can then be appealed at the federal court level.

Rambus began its crusade in January 2000 when it sued Hitachi Ltd. in the U.S. District Court of Delaware. Rambus alleged that Hitachi had infringed on Rambus' high-speed memory interface technology in Hitachi semiconductor products featuring SDRAM and DDR SDRAM. Rambus wanted the court to forbid Hitachi from manufacturing, selling or importing chips featuring the patented technologies. The technologies in question had, until then, been made available to all manufacturers free of royalties.

Rambus scored a huge victory six months later when Toshiba Corp. agreed to sign a licensing deal with it and to pay royalties to Rambus regarding this issue. About a week later Hitachi also relented and, like Toshiba, agreed to a licensing deal. In August 2000, Rambus confirmed it was having talks related to this issue with all major makers of SDRAM, seeking licensing agreements. The following month it signed a licensing agreement with NEC Corp., and in Nov. 2000 with Samsung Electronics Co. Ltd.

However, not everybody agreed to Rambus' demands, including Infineon, Hynix Semiconductor Inc. and Micron Technologies Inc., the three of which opted separately to fight Rambus in court to try to invalidate its patent claims. A variety of legal actions have been taken since then by Rambus and its counterparts both in U.S. and European courts. But the Infineon tussle is widely seen as the one that will make or break Rambus' claims. For example, in Nov. 2001 a U.S. District Court postponed a lawsuit by Hynix pending the resolution of the Rambus appeal against Infineon, which was ongoing at the time.

Rambus also develops a memory interface called Direct RDRAM (Rambus dynamic random access memory) for whose licensing Rambus hasn't filed any legal claims.