Tuesday, Rambus Inc. (RMBS) said it agreed in principle to the terms for a compulsory license with memory semiconductor supplier Hynix Semiconductor Inc. for SDR SDRAM and DDR SDRAM memory products. Last month, the U.S. District Court for the Northern District of California granted Rambus' request for supplemental damages, following an earlier jury verdict finding nine Rambus patents valid and infringed by SDRAM products of Hynix. At that time, the court had ordered Los Altos, California-based Rambus and Hynix to negotiate the terms of a compulsory license to allow Hynix to continue to make, use, and sell these products.
Rambus said Tuesday that the parties have agreed to royalty rates of 1% for SDR SDRAM and 4.25% for DDR SDRAM memory devices for net sales after January 31, 2009 and before April 18, 2010 with the second rate applying to DDR, DDR2, DDR3, GDDR, GDDR2 and GDDR3 SDRAM devices, as well as DDR SGRAM devices.
In addition, a proposed final judgment of $349 million in damages, plus pre-judgment interest of about $48 million has been submitted to the District Court. The final amount of pre-judgment interest depends on the date the final judgment is entered. Damages and royalty rates are limited to U.S. infringements.
As per the court's order issued last month, Icheon, South Korea-based Hynix was to pay Rambus royalties of 1% for SDR SDRAM products and 4.25% for DDR SDRAM products made, used, or sold in the U.S. after December 31, 2005. Hynix's DDR SDRAM products include DDR SDRAM, DDR2 SDRAM, DDR3 SDRAM, GDDR SDRAM, GDDR2 SDRAM, GDDR3 SDRAM, and DDR SGRAM.
The supplemental damages announced last month were in addition to the $133 million previously awarded for Hynix's infringement through December 31, 2005. Hynix at that time said it was disappointed by the District Court's damages ruling and would file an appeal when the final judgment is entered. The court, however, denied Rambus' request for injunctive relief.
According to Thomas Lavelle, senior vice president and general counsel at Rambus, "While the Court still needs to resolve some outstanding issues, we are pleased to have reached agreement with Hynix on a number of terms. Our goal as always is to seek fair compensation for the use of our patented inventions, and this agreement will be a significant milestone in pursuit of that goal."
The case was originally filed by Hynix against Rambus in August 2000. Judge Whyte of the District Court split the case into three separate phases with Rambus subsequently prevailing in all three phases. Judge Whyte and a separate jury also found that Rambus acted properly while a member of the standard-setting organization JEDEC during its participation in the early 1990s.
Rambus also said last month that the U.S. Supreme Court denied a request by the Federal Trade Commission or 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. (NVDA), Micron Technology Inc. (MU), Hynix and Nanya Technology Corp., had joined the FTC in seeking the antitrust penalties.
RMBS closed Monday's regular trade at $7.89, up $0.05 or 0.64%, on 2.24 million shares.
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