January 18, 2000 5:25 PM PST

Rambus sues Hitachi--will others be next?

Memory designer Rambus has filed a lawsuit against Hitachi for patent infringement, a move that could end up spreading across wide segments of the semiconductor industry.

Mountain View, Calif.-based Rambus filed an action in the Federal District Court in Delaware which alleges that Hitachi unlawfully incorporated Rambus' intellectual property into the designs of a large number of Hitachi memory chips and microprocessors, according to company executives. Rambus is seeking an injunction, as well as punitive damages.

Hitachi could not be reached for comment.

The circumstances of the suit indicate that Hitachi isn't likely to be the only company hit by some sort of legal action or request for royalties. Conceivably, Rambus could eventually file similar, although perhaps less bitter, suits against any company that made SDRAM memory (synchronous dynamic random access memory), or products that "interface" with computer memory, during the past 10 years. Such a list could include Samsung, Micron Technologies, Infineon, IBM and Intel.

Rambus, in fact, has already opened negotiations with some companies about licensing deals that would effectively bring about a settlement of any claims.

"We believe we have some fundamental synchronous memory technology intellectual property," said Avo Kanadjian, vice president of worldwide marketing for Rambus. "We are talking to a number of companies," he said.

Kanadjian declined to identify any of the companies. "We are in discussions, and we do prefer settlement."

The legal action springs from the vagaries of Rambus' history and the inner workings of patent law. The four patents involved in the suit were awarded to Rambus in 1999. However, they all date back for legal purposes to April 1990, when Rambus filed for its patents, Kanadjian said.

The industry's effort to promote SDRAM, meanwhile, didn't get kicked off until late 1991, he stated, while SDRAM chips didn't start rolling out until 1993. Rambus claims it showed its technology to Hitachi in the mid-90s and proposed a licensing agreement. Hitachi then incorporated this technology, according to the complaint and Kanadjian, into 100-MHz SDRAM and 133-MHz SDRAM chips as well as its SH family of microprocessors.

"Our business model is to develop intellectual property to license to others. We believe that Hitachi has used our intellectual property to develop non-Rambus products," he said.

Hitachi eventually took out a limited license with Rambus, but one that doesn't cover these products. Hitachi has never made Rambus parts.

Although Hitachi's actions, if true, seem calculated, Rambus does not have to show that to sustain a claim, which is why the suit has broader implications. Under the "prior art" doctrine of patent law, the date of the initial patent determines whether or not liability exists. If a second company develops identical or similar technology without access or knowledge of the original patents, the second company can still be held liable only because its invention came later.

Other technology companies, in effect, could have unwittingly infringed upon the patents. This list could include not only memory makers but also processor manufacturers, "motherboard" makers and chipset makers. Ironically, many companies have license agreements with Rambus, but most are relatively limited in scope.

Lawsuits are dreaded in Silicon Valley, but Kanadjian stated that such suits are a fact of life. Rambus is one of a number of "IP" semiconductor companies that only make money if they can license their technology to larger, established companies, he said.

"I don't think these suits are filed without significant material to back them up," Kanadjian said. "I don't know of any company that doesn't respect intellectual property."

 

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