Time for sharp competitive intelligence

Rambus Inc. scored a key victory Wednesday in its nearly decade-old fight with memory chip makers when a jury found the company did not engage in monopolistic behavior by patenting technologies that eventually became standard in memory chips.

Shares of the Los Altos-based company shot up $7.25, or nearly 39 percent, to $25.86 during regular-session trading on the news. They gained another $1.02 to $26.88 after hours.

The jury’s decision could help Rambus as it tries to collect millions of dollars in royalties on patents some of the biggest memory chip makers claim were fraudulently obtained.

However, Rambus still faces major court battles over those patents, including its attempt to overturn a 2006 Federal Trade Commission ruling that the company deceived a standards-setting committee and created a monopoly in the memory chip industry. Rambus is hoping for a decision by this summer on its appeal.

After a seven-week trial, a jury in U.S. District Court in San Jose decided Wednesday in Rambus’ favor on all three counts it was deliberating, according to Thomas Lavelle, Rambus’ general counsel. The jury deliberated for just one day.

In the lawsuit, originally filed in 2000, chip makers Micron Technology Inc., Hynix Semiconductor Inc. and Nanya Technology Corp. argued that patents held by Rambus for key technologies now included in their chips should be considered invalid. And they said they shouldn’t have to pay royalties to Rambus.

The companies say Rambus engaged in illicit behavior in filing the patents for technologies used in DRAM, or dynamic random access memory, the most common type of memory chip, the part in a personal computer that stores data.

The FTC found Rambus deliberately withheld information from the Joint Electron Device Engineering Council (JEDEC) — an important engineering council which counted Rambus as a member — when the council was developing technical standards for all companies in the computer memory industry.

The FTC found Rambus concealed information about which patents it had secured or knew it would be able to secure.

The council adopted standards that meant other companies hoping to use the technology in question would either have to infringe on Rambus’ patents or buy expensive licenses to use the technology.

Rambus officials were pleased with Wednesday’s decision but acknowledged other sizable hurdles remain before the company can collect royalties.

“The issue of the behavior of Rambus at JEDEC has really been a problem for Rambus, because the manufacturers have turned it into a cause celebre, saying we behaved improperly and illegally,” Lavelle said in an interview. “This jury found that’s not the case. We believe it vindicates what we’ve done.”

Micron said in a statement that it would appeal the jury’s finding.

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