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The U.S. District Court for the Northern District of California has issued a ruling claiming that nine Rambus patents are valid and infringed by Hynix Semiconductor, the world’s second largest memory supplier. But the court denied Rambus’ request for barring import of Hynix’s products into the USA and said that the companies have to negotiate about tech licensing terms.

“We are pleased with the Court’s order of supplemental damages. We believe any compulsory license between the two parties must fairly compensate Rambus for Hynix’s ongoing use of our patented inventions,” said Tom Lavelle, senior vice president and general counsel at Rambus.

According to the order, Hynix is to pay Rambus royalties of 1% for SDR SDRAM products and 4.25% for DDR SDRAM products made, used, or sold in the United States after December 31, 2005. DDR SDRAM products include DDR SDRAM, DDR2 SDRAM, DDR3 SDRAM, GDDR SDRAM, GDDR2 SDRAM, GDDR3 SDRAM, and DDR SGRAM. These supplemental damages are in addition to those previously awarded in the amount of $133 million for Hynix’s infringement through December 31, 2005.

Hynix said it was gratified that the court rejected Rambus’s request for an injunction, but is disappointed by the district court’s damages ruling and will file an appeal when the final judgment is entered. While Hynix’s appeal is pending Hynix is not required to pay the judgment; if, as it expects, Hynix prevails on the appeal, the judgment will be reversed. The appeal will take one to two years under the normal U.S legal procedure.

Hynix believes that Rambus’s patents, as has been recently confirmed by certain rulings of the US Patent & Trademark Office, are invalid. In addition, Hynix maintains that Rambus’s conduct in destroying evidence relevant to the litigation between Hynix and Rambus, and Rambus and the rest of the DRAM industry, bars Rambus from enforcing its patents. The United States District Courts for Delaware and Virginia have already ruled that Rambus is guilty of destroying evidence; the decision of the California court conflicts with these other court decisions. However, judged from Delaware and Virginia said that their ruling will not affect anyhow the ruling in Hynix vs. Rambus case.

Hynix’s US sales of DRAMs will continue uninterrupted.

Tags: Rambus, Hynix

Discussion

Comments currently: 2
Discussion started: 02/24/09 08:25:51 PM
Latest comment: 02/24/09 08:46:15 PM

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1. 
The comments from the Hynix atty are a bit disingenuous.

Some things not stated in the article:

Relative to the $133 million judgment from 12/31/05 ... that amount has been collecting interest (since 12/31/05) and is now substantially higher.

The damages on infringement since 12/31/05 (1% for SDRAM, 4.25% for DDR) will also be subject to interest from the date of infringement (probably this will be calculated quarterly).

Hynix and Rambus are under a court order to negotiate a compulsory license agreement applicable to infringement subsequent to 2/1/09. They are going to meet in Seoul, Korea, on March 4th for this purpose (a court appointed mediator is accompanying the Rambus negotiating team to Seoul). The rates negotiated in this meeting will replace the 1%/4.25% rate for infringing product subsequent to 2/28/09. I think most observers familiar with the case expect rates slightly higher than the 1%/4.25% rate to come out of that meeting; as courts have noted (including the court in this case), if rates for an infringer who lost in court were not higher than for a licensee that had never infringed, there would be no incentive to license and indeed there would be an incentive to commit patent infringement. [Rambus is believed to want between 6% and 7% for later forms of DRAM (DDR3 in particular), but may not be able to obtain that high a rate in these negotiations.] If the parties absolutely cannot agree on the terms of a compulsory license rate, the court will set a rate later in March.

The bottom line here is that Hynix very likely owes Rambus between $400 and $500 million for past infringement plus ongoing quarterly royalty payments for future production.

And, contrary to the Hynix statement, it is nearly certain that the court will require a bond of some sort for past infringement and also concurrent quarterly payments for ongoing production, although these funds may be held in escrow until the final disposition of this case (e.g. until appeals, if any, are resolved). Also contrary to the Hynix statements above, it is not a certainty that Hynix will, in fact, appeal the case. For one thing, those who have followed this case closely believe that Hynix's chances of a successful appeal are near zero. For another, in the negotiations over the royalty rate for future production, Rambus may well offer Hynix a lower royalty rate in exchange for a commitment from Hynix not to appeal the outcome of the court case.

Another aspect of this case not touched on in this article is that separate from this court case over patent infringement (a case that was filed by Hynix, NOT by Rambus), Hynix is a defendant in a separate antitrust case brought by Rambus. This case is against Hynix, Samsung and Micron for conspiring to commit illegal antitrust to keep Rambus products from being successful. That case is going to be a "slam dunk" for Rambus and will be heard later this year. Damages from that case could run as high as $12 BILLION dollars. Hynix could be "let out" of that case by Rambus, which would still collect substantially the same total damages (in an anti-trust case, there is "joint and several damages", which means that if some parties are let out or can't pay, the remaining defendants have to pick up that party's share of the total damages). If a pledge by Hynix not to appeal is a huge bargaining chip in Hynix's favor, the ability of Rambus to let Hynix out of the anti-trust case is huge bargaining chip for Rambus.

It is, however, true that "Hynix’s US sales of DRAMs will continue uninterrupted".
0 0 [Posted by: Watzman  | Date: 02/24/09 08:25:51 PM]
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2. 
Something else to add regarding pure "posturing" from Hynix and their law firm.

Re: "Hynix believes that Rambus’s patents, as has been recently confirmed by certain rulings of the US Patent & Trademark Office"

Samsung had requested a Patent Office "Re-exam" of quite a few Rambus patents, a number of which are now complete. This basically backfired on Samsung and Rambus' other challengers. Once there has been a re-exam, and patents have NOT been invalidated, those patents become nearly incontestable in court as to their validity (indeed, the party requesting the re-exam [Samsung] is subsequently PROHIBITED from challenging them at all).

In the case of the Rambus patent re-exams, some Rambus patent claims were invalidated, BUT SUBSTANTIALLY MORE WERE UPHELD. The fact that a few claims were invalidated makes the Hynix comment superficially supportable. However, on analysis of which claims were validated and which claims were invalidated, and which claims are present in which court cases, the results so far are pretty much a total Rambus victory in that not only have more claims been upheld than have been invalidated, but the major and most important claims present in EVERY case now in litigation were UPHELD.

The Rambus patent infringement cases against these firms (Samsung, Hynix, Nanya and Micron) typically involve about 50 claims each (of which, usually, only 8 to 12 actually go to jury trial). Patent infringement is like pregnancy in that you are an infringer or you are not; you cannot be "partially infringing". An infringer is deemed "guilty" [e.g. "fully guilty"] if they infringe any ***ONE*** or more claim(s) of any one or more patent(s) held by the patent holder.

Thus, the action by the patent office of UPHOLDING more of Rambus' patents and claims than they invalidated, including most of the claims in most of the patent cases now in court, worked far more to Rambus' advantage than it did to the advantage of the defendants, because almost every Rambus patent case now has patent claims in it that have been subject to a patent re-exam and that have SURVIVED and been VALIDATED, and that are, therefore, almost incontestable in court as to their validity.

Since the infringement of any one claim, makes the infringer "fully guilty", and since most of these cases involve charges of infringing many tens of claims, the fact that a few of the claims have been invalidated is of far less importance than that fact that many more (and, in fact, many more important) claims have now been validated and made nearly incontestable (thank you Samsung).
0 0 [Posted by: Watzman  | Date: 02/24/09 08:46:15 PM]
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