Rambus weighs appeal of antitrust defeat
11/16/2011 3:37 PM EST
SAN FRANCISCO—Memory chip technology licensor Rambus Inc. said Wednesday (Nov. 16) it is reviewing its options for appeal after a California Superior Court jury awarded the company no damages in its antitrust case against Micron Technology Inc. and Hynix Semiconductor Inc.
Rambus (Sunnyvale, Calif.) said in a statement that the 12-member jury found, nine to three, that Rambus did not meet its burden of proving its case against Micron and Hynix. Rambus had argued during a three-month jury trial earlier this year that the two companies and others colluded to fix the price of memory chips and shut Rambus's RDRAM technology out of the market.
"From a tactical standpoint, we are reviewing our options for appeal," said Harold Hughes, president and CEO of Rambus. "We believe very strongly in our case and will explore all of our options as long as we have channels available to us."
In a conference call with analysts Wednesday after the verdict, Tom Lavelle, Rambus senior vice president and general counsel, said the jury's verdict has no legal bearing on existing Rambus licensing deals, including the company's $900 million licensing agreement with Samsung Electronics Co. Ltd. Lavelle said the verdict won't have any bearing on any of the several other trials Rambus is currently involved in, which are patent infringement cases.
Lavelle said Rambus would look at "a lot of things" when considering options for appeal, including a decision by the trial judge—James McBride—not to allow the jury to be shown evidence that Samsung executives pleaded guilty to participating in price-fixing collusion and a ruling that the case be held as a "rule of reason" case, rather than a "per se" case. "I'm not in a position to say what if any grounds we are going to appeal on at this point, but those are certainly two of the things that we are going to be looking at," Lavelle said.
Asked when Rambus might appeal the verdict, Lavelle offered a guess of sometime in mid-2012.
"We are very pleased that the jury considered all the evidence at issue in this case and determined that Rambus' allegations against the company were completely without merit," said Steve Appleton, Micron's chairman and CEO, in a statement issued by Micron.
The jury verdict is a significant blow to Rambus, which was seeking $3.95 billion in damages—an amount that would have been tripled under California law to $11.9 billion. The price of Rambus stock immediately plunged by more than 60 percent following the verdict.
"It'll be interesting to see where the stock price comes to rest," said Lane Mason, a memory chip analyst at Objective Analysis. "The big issue is kind of moved off to the side and now two things are going to happen—probably Rambus's legal expenses will go down and the original model of developing and marketing IP will be what people look at to see what the value of Rambus really is."
In the trial, Rambus argued that Micron and Hynix conspired to constrain availability of Rambus’ RDRAM and keep its prices unnaturally high in an effort to eliminate it from the marketplace. Rambus alleges that Micron and Hynix raised the prices of their double data rate DRAM chips by as much as 500 percent after RDRAM—a proprietary Rambus technology—was eliminated from the market.
Micron said it presented evidence at the trial that RDRAM was prevented from gaining wide acceptance in the market because of design flaws, higher manufacturing costs and other drawbacks associated with the technology.
Rambus said Wednesday that the judge in the case had yet to rule on its claim that Micron and Hynix engaged in unfair competition in violation of the California Business and Professions Code Section 17200.
Rambus initially filed the suit against the defendants in 2004. The jury deliberated for eight weeks before issuing its verdict Wednesday.