RICHMOND, Va. - A federal court jury here Wednesday afternoon found Rambus Inc. had committed fraud by failing to disclose its synchronous patent applications to the industry JEDEC standards body.
The jury ordered Rambus to pay $3.5 million in punitive damages to Infineon Technologies AG, which Rambus had sued for alleged patent infringement.
The damage amount, however, will likely be reduced to as low as $350,000 due to a Virginia state law capping the level of punitive awards.
In a separate count, the jury Wednesday determined that Rambus had not violated RICO anti-racketing law as a result of its patent application silence at JEDEC.
Infineon attorneys told Federal Judge Robert Payne Wednesday that they will file a motion, based on the jury's verdict of fraud, to have the Rambus patents declared unenforceable against the German chip maker.
If the judge made such a ruling, it could be cited as a precedent in the two other pending Rambus synchronous patent cases involving Micron Technology and Hynix Semiconductor (formerly Hyundai Electronics).
Infineon attorneys told EBN they are seeking the ruling as a safeguard in the event an appellate court overrules Judge Payne's decision that Infineon didn't infringe Rambus' patents.
Last week, Infineon was cleared of infringing Rambus' synchronous patent infringement, when Judge Payne ruled that the chip maker's SDRAM and DDR chips didn't have a multiplexed memory bus that the Rambus patents require.
Avo Kanadjian, Rambus vice president of worldwide marketing, declined to comment immediately after the jury verdict, asking to have further time to consider the decision.
Rambus issued a statement that it plans to immediately appeal today's verdict. In addition, Rambus said it will file post-trial briefs with the U.S. District Court for the Eastern District of Virginia to set aside today's verdict.
"We are obviously disappointed in today's verdict and will immediately appeal," said Geoff Tate, CEO of Rambus, in the released statement. "The innovations at issue are Rambus inventions, and the evidence presented at trial made it clear that Infineon knew all along that they were Rambus inventions."
"I attended the whole trial and continue to believe that Infineon's JEDEC charges are completely baseless. Rambus abided by JEDEC's rules despite the fact that these rules have been shown to be confusing, conflicting, poorly communicated and generally not complied with by other JEDEC members.
"Today's verdict, if allowed to stand, poses a serious threat to all technology companies that try to protect their inventions through our intellectual property laws. It puts innovators at risk of forfeiting their intellectual property rights by simply attending meetings of a standard setting committee."
Rambus has already appealed Judge Payne's earlier summary judgment throwing out infringment claims.
The fraud verdict is the first public judgment against Rambus' silence on its synchronous patent applications during four years of participation in the industry JEDEC panel drafting an SDRAM open standard.
Sherry Garber, vice president of Semico Research, Phoenix, said the jury verdict of fraud "has to be a great embarrassment for Rambus as well as having a negative financial impact." She said the finding of fraud is a serious matter for any company, especially for Rambus as it seeks to push its core Direct RDRAM and collect royalties of SDRAMs and DDR.
Micron and Hynix separately have also charged Rambus with fraud in its JEDEC behavior.
Rambus had argued that it disclosed its basic Rambus DRAM patent which included features that later were added to its synchronous DRAM applications.
In addition to the legal setbacks to Rambus, the Richmond trial for the first time disclosed formerly confidential synchronous licensing details with eight chip makers that impact Rambus' royalty revenue stream.
This week Infineon attorneys revealed that Samsung Electronics Co. can stop paying SDRAM and DDR royalties to Rambus if a court in any geographic region of the world determines that any company does not infringe the synchronous patents.
It was also disclosed for the first time that Rambus was charging each of its eight licensees, including Samsung, a 3.5% royalty of DDR sales, as well as 0.75% royalty on singel data rate SDRAMs.
Judge Payne told the jury Tuesday that if it determined that Rambus committed an actual fraud, it had the option of awarding punitive damages against the firm.