Rambus Loses Antitrust Case, Stock Plummets

The suit, filed in May of 2004 in the California Superior Court, had accused Hynix and Micron of illegally fixing the price of Rambus’ RDRAM memory technology at "unnaturally" high levels in an effort to eliminate competition in the marketplace.

Rambus was seeking $3.95 billion in antitrust damages from the defendants, who walked away unscathed after the three-month long trial concluded with jurors voting 9-3 in their favor. Had Rambus won the case, the $3.95 billion would be automatically tripled under California state law to a whopping $11.9 billion.

According to the Wall Street Journal, Micron and Hynix argued that any decline Rambus faces in the marketplace can be attributed, simply, to “issues” with their technology.

The Journal also reported that Rambus’ stock plummeted nearly 61 percent after the delivery of Wednesday’s verdict. In light of its loss, the chip licensor has announced it will be reviewing options for appeal.

"We are disappointed with this verdict as we believe strongly in our case. We thank our legal team and everyone who has supported Rambus in this case over the past seven years. We do not agree with several rulings that affected how this case was presented to the jury and we are reviewing our options for appeal," said Harold Hughes, president and chief executive officer of Rambus, in a statement. "Regardless of this outcome, we remain steadfastly committed to innovation as Rambus engineers and scientists continue to advance the frontiers of technology for the benefit of our customers and consumers worldwide."

Wednesday’s verdict doesn’t put all legal turmoil to rest for Rambus, a firm who is also involved in a string of patent infringement suits including separate cases with Hynix and Micron. According to Tom Lavelle, Rambus senior vice president and general counsel, the verdict will in no way impact the firm’s other legal dealings. "It [the verdict] really doesn’t have any implication at all," Lavelle said during a post-trial conference call. "This was, as you know, a price-fixing antitrust case. The other cases that we are really involved in are patent infringement cases. So there is no direct correlation here whatsoever."

Samsung, who had originally faced the same antitrust allegations as Hynix and Micron, agreed to settle last year by offering Rambus a $900 million licensing agreement. Wednesday’s verdict will not affect this licensing agreement with Samsung, or any other existing licensing agreements held by Rambus, said Lavelle during the call.

When asked whether Samsung may attempt to breach the licensing contract, Lavelle said that "there are no legal grounds for them to do that."