Rambus Fined $250 Million in Hynix Patent Lawsuit

Rambus Inc. (RMBS) was ordered by a federal judge in San Jose, California, to pay a $250 million sanction for destroying documents in its litigation with SK Hynix Inc. (000660)

The fine was issued yesterday by U.S. District Judge Ronald Whyte in the memory-chip technology patent-infringement case that Rambus won in California seven years ago. The sanction will be applied against whatever sum Rambus ultimately keeps of the $349 million awarded it after a 2006 verdict finding that SK Hynix infringed Rambus patents, Whyte ruled.

The sanction “applied as a credit against Rambus’s judgment against SK Hynix recognizes that Rambus’s conduct was inexcusable but not so egregious as to justify dismissal of its infringement case,” Whyte wrote in his order yesterday. The judge denied Hynix’s request for a new trial in the case.

The sanction “takes into account the royalty rates negotiated and paid by SK Hynix’s primary competitors” during the period of the alleged infringement, Whyte wrote.

Rambus’s cases against SK Hynix, and another related case against Micron Technology Inc. (MU), are over the companies’ use of interfaces that are part of dynamic random access memory that acts as the main memory in computers. DRAM is built to industry standards and is interchangeable by product. SK Hynix and Micron have argued Rambus destroyed records that would have proved Rambus misled the board that sets that standard.

2006 Verdict

The U.S. Court of Appeals for the Federal Circuit in Washington previously upheld Whyte’s denial of SK Hynix’s bid to throw out the 2006 verdict finding that the company infringed Rambus patents.

SK Hynix said in a statement today that it plans to appeal the decision after the judge issues his final ruling, saying the fine was smaller than it expected.

“We are pleased that the court is recognizing the value in Rambus intellectual property,” Sunnyvale, California-based Rambus said in an e-mailed statement. “We are disappointed in the sanction that reduces the judgment awarded to Rambus, but hope the ruling will help provide impetus to resolve this matter.”

The case is Hynix Semiconductor Inc. v. Rambus Inc., 00-cv-20905, 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

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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