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Hyundai Sues Rambus Over Patent Royalties

Electronics: South Korean memory chip maker acts in response to design firm's demand for fees.

August 31, 2000|From Bloomberg News

SEOUL — Hyundai Electronics Industries Co., the world's second-largest computer memory chip maker, said it sued Rambus Inc. alleging some of the semiconductor-design company's patents are illegal.

Hyundai said "certain patents owned by Rambus Inc. are invalid, unenforceable, and not infringed by any Hyundai products," in the suit filed Tuesday at the U.S. District Court in San Jose.

Hyundai's action comes a day after Micron Technology Inc., the No. 3 memory-chip maker, sued Rambus for violation of antitrust laws. The chip makers aim to challenge Rambus' attempt to enforce patents providing wide-ranging royalties from the memory chip industry, estimated to be worth $30 billion in revenues this year.

Hyundai said it filed the lawsuit "in response to an assertion of infringement by Rambus and a demand that Hyundai accept and pay royalties under the Rambus patents."

Rambus denied the allegations in a statement distributed by Business Wire, saying it's preparing a response to the court documents and expects to "prevail in this litigation and to be fairly compensated" for the use of its design. The company declined to say how much it expects to collect in royalties.

"Rambus' patents are a negative for the industry in that they will increase the overall amount of money paid out in patents," said B.J. Koo, a semiconductor analyst at Jardine Fleming in Seoul.

Rambus shares fell $4.44, or 5.5%, to $76.19 on Nasdaq. It dropped 4% Tuesday on news of the Micron Technology suit although it has risen more than fourfold this year. Micron fell $4.56 to $83.69 on the New York Stock Exchange. Hyundai shares fell 2.9% to $19.96 in Korean trading.

Rambus-standard chips account for about 5% of the memory chip market. Oki Electric Industry Co. last month agreed to pay Rambus royalties for patents Rambus claims cover two alternative memory-chip standards, including synchronous dynamic random-access memory, or SDRAM. Micron and Hyundai insist that SDRAM, the mainstream memory chip used in personal computers, is an open standard.

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