Wednesday, May 27, 2009
U.S. District Court Orders Hynix to Post Security
for Infringing Rambus Patents
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The U.S. District Court for the Northern District of
California has ordered Hynix Semiconductor to secure
the judgment amount of approximately $397 million
through a combination of a bond and a lien on a
Hynix property in South Korea for infringing Rambus
The bonded amount of $250M is required to be posted
within 45 days of the order. The lien will only
serve as security if a new appraisal of the Hynix
property shows a fair market value of at least
double the amount of the judgment not secured by the
bond. If the appraisal is inadequate, Rambus may ask
the Court to substitute other security.
Final judgment in this matter was entered against
Hynix on March 10, 2009 in the amount of
approximately $134M for infringement through
December 31, 2005 and approximately $215M for its
infringement from January 1, 2006 through January
31, 2009. In addition, the Court awarded about $48M
in pre-judgment interest to Rambus.
"We fully expect the judgment against Hynix to be
upheld on appeal, and that we will be entitled to
collect the entire amount of the judgment," said
Thomas Lavelle, senior vice president and general
counsel at Rambus. "We appreciate the Court's
thoughtful consideration in this case, however, we
believe Hynix should have been required to post a
bond for the entire amount of the judgment. If
Hynix's proposed lien fails to show value of roughly
$300 million, we will ask the Court for other
security in order to protect Rambus' interests."
In addition, the Court ordered Hynix to pay
compulsory license fees into escrow pending the
outcome of the appeal Hynix filed in this matter.
The Court ordered Hynix to pay Rambus royalties on
net sales after January 31, 2009 and before April
18, 2010 of 1% for SDR SDRAM and 4.25% for DDR SDRAM
memory devices. The latter rate applies to DDR,
DDR2, DDR3, GDDR, gDDR2 and GDDR3 SDRAM devices, as
well as DDR SGRAM devices. Damages and the
compulsory license apply to U.S. infringements of
the patent claims in suit.
"Hynix is pleased that Judge Whyte accepted our
proposal regarding the bond and other security for
the judgment in the Rambus case," Hynix said in a
"Hynix will post the required security in accordance
with the Court?s order while we pursue our appeal to
the United States Court of Appeals for the Federal
Circuit. This ruling prevents Rambus from seeking to
collect on its judgment while our appeal is pending.
Our appeal raises the conflicting rulings from the
Delaware and California courts on Rambus?s
destruction of evidence, and other key rulings on
patent and antitrust issues," the company added.
This case was originally filed by Hynix against
Rambus in August 2000. The Honorable Ronald M. Whyte
of the U.S. District Court for the Northern District
of California split the case into three separate
phases with Rambus subsequently prevailing in all
three phases. During the first phase, Hynix alleged
that Rambus' patents were invalid based on the
doctrine of unclean hands. The Court issued its
Findings of Fact and Conclusions of Law in Rambus'
favor in January 2006. The Court reaffirmed its
finding of no spoliation when it denied Hynix's
motion for reconsideration in February 2009.
The second phase dealt with Rambus' allegations that
Hynix memory products infringed its patents. In
April 2006, a jury unanimously found that all ten
Rambus patent claims at issue in that trial are
valid and infringed by Hynix memory products. The
jury award of approximately $307M in damages for
U.S. sales of infringing Hynix products through
December 31, 2005, was subsequently reduced by the
Court to approximately $134M.
In the third and final phase of the case, Hynix
(together with Micron and Nanya) tried its remaining
claims and defenses against Rambus including
antitrust and fraud claims based on Rambus'
participation in a standard-setting organization
called JEDEC. In March 2008, a jury found Rambus had
acted properly during its participation in JEDEC in
the early 1990s. The Court similarly found in
Rambus' favor in a decision issued on March 3, 2009.