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Rambus's Final Trial in Hynix Patent Case Is Delayed (Update3)

By Joel Rosenblatt

Aug. 22 (Bloomberg) -- A federal judge delayed the final phase of Rambus Inc.'s six-year patent dispute with Hynix Semiconductor Inc. until the U.S. Federal Trade Commission determines the penalty in an antitrust case against Rambus.

U.S. District Judge Ronald Whyte in San Jose, California, ruled today that the third trial involving the companies, previously set to start next month, will take place no earlier than February. The FTC found on Aug. 2 that Rambus engaged in ``deceptive conduct'' in order to control patents for high-speed computer memory chips.

``The FTC's findings that Rambus violated antitrust laws are going to be part of our antitrust case, which is based on the same conduct,'' Ken Nissly, a lawyer for Hynix, said in an interview.

A settlement between Rambus, a designer of memory chips, and companies it sued for patent infringement will be more likely ``once the parties know what industrywide remedy the Federal Trade Commission will impose,'' Whyte said in his ruling. Time also is needed to determine what FTC findings to admit into the Hynix case, he said.

Hynix says its argument will resemble the FTC's. Both say Rambus attended meetings of the Joint Electron Device Engineering Counsel, a memory-chip standards panel, without disclosing patents it would later enforce. Hynix claims the Rambus patents are unenforceable.

$307 Million Award

A federal jury in April awarded Rambus $307 million in its dispute with Ichon, South Korea-based Hynix, the world's second- largest memory chipmaker. Jurors agreed with Rambus's claim that Hynix infringed patents covering fundamental aspects of dynamic random access memory, or DRAM, the main type of memory used in computers. Whyte later reduced the award to $133.4 million.

Shares of Los Altos, California-based Rambus fell $1.20, or 9.7 percent, to $11.21 in Nasdaq Stock Market trading. They have fallen 31 percent this year, valuing the company at $1.15 billion.

The FTC found that Rambus monopolized four aspects of an industry standard for memory chips. The ruling threatens to reduce Rambus's ability to collect royalties that provide 80 percent of its revenue.

Rambus and the FTC staff have to submit arguments by Sept. 15 on whether the company should be barred from getting royalties on memory chips that comply with the standard.

Rambus spokeswoman Gabriele Collier didn't immediately return a call seeking comment.

The case is Hynix Semiconductor Inc. v. Rambus Inc., 00-cv-20905, U.S. District Court, Northern District of California (San Jose). The FTC case is In the Matter of Rambus Inc., Docket No. 9302, U.S. Federal Trade Commission.

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

Last Updated: August 22, 2006 18:59 EDT

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