Chipmakers Rambus and Hynix reach preliminary agreement on patent infringement case

Memory chip designer Rambus Inc and chip maker Hynix Semiconductor Inc agreed on terms for a compulsory license in a long, costly patent fight, but other issues remain. A proposed final judgement of $397 million in damages and interest has been submitted to a US court by Rambus, after the two sides agreed to royalty rates for some memory chip sales, Rambus said in a statement on Monday.

Korean chipmaker Hynix agreed to pay California-based Rambus a 4.25-per cent royalty rate on sales of the most recent types of memory chips. Hynix will pay that level of royalties for sales after 31 January 2009, and before 18 April 2010, of newer types of dynamic random access memory, including double-data rate 2 and 3, and 1 per cent for earlier versions of the chips, Rambus said today. Park Seong Ae, a Hynix spokeswoman, confirmed the agreement.

Today's pact, made under court-ordered negotiations, moves the companies closer to a resolution after more than eight years of patent infringement litigation in US District Court in San Jose, California. Judge Ronald Whyte last month ordered Hynix, the world's second-largest maker of computer-memory chips, and Los Altos, California-based Rambus to arrive at such a pact.

Rambus is involved in legal disputes around the world over its contention that Hynix and other chipmakers have violated its patents on the dynamic random access memory (DRAM) that is used in virtually all personal computers.

In the proposed final judgement, Hynix would be asked to pay $349 million for the patent violations and roughly another $48 million in interest, Rambus said. The official document filed with the court left the amount of interest blank, depending on what date the order becomes official.

In a court filing today, Hynix said the companies are in disagreement about whether it should ''accrue'' the ongoing royalties, pay them to Rambus, or place them in escrow until the Korean chipmaker gets a final ruling from a federal appeals court. Rambus and Hynix are scheduled to appear before Whyte on 17 March to present arguments over unresolved issues.

"While the Court still needs to resolve some outstanding issues, we are pleased to have reached agreement with Hynix on a number of terms," Thomas Lavelle, senior vice president and general counsel at Rambus, said in a statement.

Rambus also said last month that the US Supreme Court denied a request by the Federal Trade Commission (FTC) to review an antitrust lawsuit against the company. The Supreme Court announced that it would not hear the FTC's case that Rambus violated antitrust law, instead ruling that the federal ruling in favor of Rambus would remain intact. Competitors for Rambus, including NVIDIA Corp., Micron Technology Inc., Hynix and Nanya Technology Corp., had joined the FTC in seeking the antitrust penalties.

Hynix, based in Ichon, South Korea, fell 1.1 per cent to close at 8,130 won in Seoul trading, while the benchmark Kospi index rose 1.9 per cent. Rambus gained 0.6 percent to $7.89 in NASDAQ trading yesterday.