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Mon, May 07, 2001 - Page 21 News List

Rambus loses major chip patent suit

LEGAL BLOW The company's claim that memory maker Infineon violated its patents was thrown out of US district court on Friday, causing shares in Rambus to nosedive

BLOOMBERG , RICHMOND, VIRGINIA

Rambus' designs enable memory chips, microprocessors and other semiconductors to speed data in computers and other devices such as Sony Corp's PlayStation game consoles. The RDRAM chips used in PlayStation consoles aren't at issue in the patent battles.

The chip designer gets most of its revenue, US$72.3 million in fiscal 2000 sales, by charging royalties and license fees to chipmakers on more than 100 patents. Its percentage of revenue from each chip is pegged to the chip's price.

Rambus sued Munich-based Infineon -- 71 percent owned by German electronics giant Siemens AG -- last August, contending Europe's top semiconductor maker infringed four US patents for the microchips.

In addition to Infineon, Rambus is suing Micron Technology Inc and Hyundai Electronics Industries Co, now called Hynix Semiconductor Inc, for alleged patent infringement. The companies have denied the allegations.

Costs associated with Rambus' legal battle against the three companies jumped to US$7.3 million in the second quarter from US$4.3 million in the previous quarter and US$660,000 a year earlier.

Eight other chip companies signed licensing agreements instead of taking on Rambus in court: Samsung Electronics Co, the world's No. 1 memory-chipmaker; Mitsubishi Electric Corp; NEC Corp; Hitachi Ltd; Oki Electric Industry Co; Toshiba Corp; Elpida Memory Inc; and Matsushita Electric Industrial Co.

These companies account for more than 45 percent of the worldwide memory-chip market, Rambus has said.

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