Jury finds Rambus committed fraud

— 3:52 PM on May 9, 2001

TR reader and avid Rambus trial follower Steven C. Den Beste sends word of a major ruling against Rambus. He writes:

The jury in the Infineon/Rambus trial has found for Infineon on two counts of fraud, and has awarded punitive damages. Because of Virginia law, damages cap at $350,000. The jury did not find RICO violation.

The money is negligible, of course. However, because of this fraud finding, Infineon now can (and will) make a motion next week for the judge to grant "equitable estoppell", which in essence means that Rambus will be enjoined against attempting to collect royalties on SDRAM or DDR-SDRAM in the US. It amounts to a partial nullification of the patents, which would henceforth only apply to RDRAM.

Such a ruling, if granted by the judge, would apply not just to Infineon but to every chip maker on all chips sold in the US. This would include not just RAM chips, but also companies like nVidia (which Rambus has been trying to hit). This would deprive Rambus of enormous amounts of income, and might conceivably lay them open for suits from existing licensees to recover royalties already paid. In other words, legal expenses are going to rise steeply and income is going to fall.

This would also have no direct effect on royalties for sales outside the US covered by patents in other nations, but should be extremely influential in courts in other countries, where lawsuits are now pending.

This could be the beginning of the end for Rambus. But do we get to see them go to jail?
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