Rambus Beats NVIDIA 3-2 In Patent Case, NVIDIA Says It's Not Worried

The U.S. International Trade Commission on Monday ruled that NVIDIA and several of its OEM and system builder partners infringed on three Rambus' patents in a case that could impact the capabilities of PCs sold by branded and custom system channels.

NVIDIA, however, brushed aside any concerns by saying that a European Commission license will prevent any impact to its business and its partners.

The United States International Trade Commission issued a final ruling on Monday that NVIDIA and its partners violated Section 337 of the Tariff Act of 1930 by importing products containing semiconductor chips which infringe on three of Rambus' patents.

A Section 337 violation makes it illegal to import products into the U.S. or sell them after importing them if they were produced using unfair methods of competition or other unfair acts, as defined by Findlaw.

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The ruling directly impacts NVIDIA, which builds graphics processors, application processors, media and communications processors, and chip sets that incorporate memory controllers Rambus said infringes on its patents.

It further impacts branded system vendors which use the NVIDIA semiconductors, including Hewlett-Packard and ASUS Computer International. Also impacted are a wide range of U.S., Taiwan, and Hong Kong suppliers of motherboards and other components, including BFG Technologies, Biostar Microtech (USA), Biostar Microtech International, Diablotek, EVGA, G.B.T., Gigabyte Technology, MSI Computer, Micro-star International, Palit Multimedia, Palit Microsystems, Pine Technology Holdings, and Sparkle Computer.

The case started in 2008 after Rambus filed a complaint with the U.S. ITC that alleged that products imported into the U.S. containing semiconductor chips with synchronous dynamic random access memory controllers infringed on nine of its patents.

The ITC in July of 2009 terminated four of those patents and certain claims of a fifth patent. Of the five patents still determined by the ITC to be valid, NVIDIA and its partners in January were initially shown to infringe on three of them, but that no violations were found with the other two.

In its final ruling, the ITC has issued a limited exclusion and cease-and-desist order against NVIDIA, HP, ASUS, Palit Multimedia, Palit Microsystems, MSI Computer, Micro-Star International, EVGA, Diablotek, Biostar Microtech, and BFG Technologies.

Next: What The Ruling Means, And NVIDIA's Response

That order allows those companies' products to be imported and sold during a 60-day presidential review period only if those companies post a bond equaling 2.65 percent of the entered value of those imports, Rambus said.

Thomas Lavelle, senior vice president and general counsel at Rambus, said in a statement that the ITC's decision shows the value of his company's commitment to innovation.

"We are extremely pleased with the ITC's decision to issue a Limited Exclusion Order, signaling the strength of our innovation. . . . The value of our patented inventions has been recognized by our current licensees, and we will continue our efforts to license others," Lavelle said.

NVIDIA released a statement which called the ITC action a mixed ruling which favors Rambus on three patents and NVIDIA on two, and which the company said will result in no impact on its customers business.

"We intend to take advantage of the mandatory European Commission License that is available. This will allow us and our partners to continue our business under the terms of that license and prevent the enforcement of any exclusion order. In the meantime, we intend to appeal the case to the Federal Circuit Court of Appeals and continue to press our arguments on these patents before the USPTO (U.S. Patent and Trade Office)," NVIDIA said.