Rambus stock falls 13% on appeal failure

Court of Appeal backs lower court verdict

By Tony Smith • Get more from this author

Posted in Financial News, 23rd August 2004 09:16 GMT

Rambus must provide Infineon with certain documents it had held close to its corporate chest, the US Court of Appeals ruled last week.

The ruling confirms an earlier US District Court of Virginia judgement made in Infineon's favour. Rambus appealed against the initial ruling on the grounds that it believes the documents in question were protected by lawyer-client privilege.

Rambus' stock fell $1.87 to $13.32 during Thursday's trading and then down to $13.20 on Friday - $2 below its Wednesday close of $15.20. Trading volumes sky-rocketed on the news of the appeal ruling.

Rambus is said to be considering its next move. The case has been rolling on since 2001, when the two companies came to blows over SDRAM royalty payments. Infineon maintains that Rambus committed fraud by hiding intellectual property from Jedec, the standards body that defined SDRAM, and for the use of which Rambus continues to demand royalties.

In January 2003, the appeal court overturned a lower court verdict that went Infineon's way. The current action is essentially the latest stage of the retrial.

Earlier this year, Rambus won an appeal against a Federal Trade Commission ruling that the memory designer had committed fraud and engaged in anti-trust activity, as Infineon, Micron and others had alleged. The FTC originally sued Rambus in June 2002.

Separately, Rambus is suing Infineon, Hynix, Micron and Siemens (as Infineon's former owner) for allegedly colluding to deprive "our RDRAM products of the opportunity to compete fairly in the marketplace". ®