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Rambus Wins Pretrial Patent Ruling Against Chipmakers (Update3)

By Joel Rosenblatt

Nov. 25 (Bloomberg) -- Rambus Inc., a designer and licensor of memory chips, won a pretrial ruling that chipmakers infringed one claim, or element, of a patent in a case scheduled for trial in January.

U.S. District Judge Ronald Whyte in San Jose, California, ruled yesterday that chipmakers including Suwon, South Korea- based Samsung Electronics Co., the largest memory-chip manufacturer, infringed an element of a Rambus patent covering computer memory. The other companies are Ichon, South Korea- based Hynix Semiconductor Inc., the world’s second-largest maker of memory chips, Micron Technology Inc. of Boise, Idaho, and Taiwan-based Nanya Technology Corp.

The ruling means Whyte “already found one claim for Rambus that they won’t have to argue,” Jeff Schreiner, an analyst at San Diego-based Capstone Investments who doesn’t own Rambus shares, said today in a phone interview. “It starts to narrow the focus of the trial. You don’t get jurors lost in the complicated nature of the patents.”

Whyte denied Rambus’s request for similar pretrial rulings covering 10 other elements of its patents. Those claims will be argued at the trial covering infringement claims over DDR2, or double rate 2 memory chips, and a newer generation, DDR3, as well as graphics memory. Samsung, Hynix and Micron last year accounted for more than 50 percent of revenue in the dynamic random access memory market, according to Schreiner.

Whyte’s ruling is “one order along with many other orders that will frame the issues for the January trial,” Ken Nissly, a lawyer representing Hynix, said in a phone interview.

DRAM Sales

The trial against the manufacturers, set for Jan. 19, follows Rambus’s victory in a patent-infringement lawsuit this year against Hynix over earlier generations of memory. Rambus is waiting for a ruling from Whyte on its request to block Hynix from selling its dynamic random access memory, or DRAM, chips in the U.S.

Besides banning Hynix sales, the judge can order the company to buy a license from Rambus at a rate he sets or force the parties to agree to one.

Arguments over the injunction were made in June, and Schreiner said Whyte may now wait until after a verdict in the January trial to rule on it to avoid hobbling Hynix with a competitive disadvantage against the other chipmakers.

“It’s just another step in the upcoming trial,” Rambus General Counsel Tom Lavelle, referring to yesterday’s ruling, said in a phone interview. “It doesn’t resolve the case. We still expect to be in front of a jury and we look forward to the opportunity.”

Judge’s Leave

Schreiner said Rambus investors were encouraged by yesterday’s ruling, which came before Nov. 28 when the judge was scheduled to return from a medical leave. “We have no issues with Judge Whyte finishing this trial” scheduled in January, he said.

Matt Powers, a lawyer representing Samsung, didn’t immediately return a call seeking comment.

Rambus rose $1.06, or 18 percent, to $6.95 in Nasdaq Stock Market trading. Rambus rose as high as $7.30 after the close of regular trading. The stock has fallen 67 percent this year.

The case is Rambus Inc. v. Hynix, 05-00334, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

Last Updated: November 25, 2008 20:00 EST

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