Hynix Wins Limits On Rambus Patent Royalties, Ends Another Patent Suit

By Joseph Mandour on September 25, 2012

SK_Hynix_e-150x150 San Diego – SK Hynix Inc. on Monday settled Intellectual Ventures Inc.’s litigation against it over semiconductor patents, after winning a court ruling Friday in the Northern District of California that will cap the royalties it owes Rambus Inc. for infringing other patents for memory devices.

Hynix and Elpida Memory Inc., which also settled with IV Monday, were named as defendants in IV’s patent infringement action filed in December 2010 in the District of Delaware.

Both companies and some of their customers were also named as respondents in an investigation by the United States International Trade Commission of certain memory device manufacturers based upon an IV complaint filed in July 2011, and in a related action in the Western District of Washington filed the same month.

“IV has built a world-class portfolio of semiconductor patents, and our preference is to sign license agreements and form productive, long-standing relationships with innovative companies rather than to litigate,” IV vice president and chief litigation counsel Melissa Finocchio said Monday.

The Friday ruling in the Rambus case, meanwhile, came in large part due to the district court’s finding that Rambus spoiled evidence in bad faith or at least willfully.

The court concluded that the sanction most commensurate with Rambus’s conduct is to strike from the record evidence supporting a royalty in excess of a “reasonable, non-discriminatory” royalty.

“Such a remedy recognizes that Rambus’s patents have been determined to be valid while at the same time recognizing that Rambus’s spoliation of evidence should preclude it from entitlement to a royalty that places Hynix at a competitive disadvantage,” Judge Ronald M. Whyte said.

The evidence does not support a conclusion that Rambus deliberately shredded documents it knew to be damaging, but Rambus did willfully destroy records when litigation was reasonably foreseeable, the judge said.

“That destruction was part of a litigation plan,” he said. “The destruction involved the shredding of large volumes of documents on multiple occasions. And finally, Rambus made no effort to log or record what was destroyed.”

Rambus itself welcomed the decision, despite the limit on the royalty rate, for confirming that it does indeed deserve royalty payments for the use of its patented technology

“This is a positive result as it is consistent with what we’ve been seeking all along — reasonable compensation for the use of our patented inventions,” Rambus senior vice president and general counsel Thomas Lavelle said Sunday. “We appreciate the court’s extensive efforts in working through years of complex arguments. While this decision does not provide SK Hynix with a going-forward license, we are hopeful it will lead to putting this matter behind us completely and allow us to reach reasonable agreements.”

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Posted in: Patent Infringement