WASHINGTON — In a final legal blow to Rambus Inc., a federal jury Wednesday (May 9) awarded Germany's Infineon Technologies AG $3.5 million in punitive damages on fraud charges arising from a patent-infringement suit filed by Rambus.
A spokeswoman for the U.S. District Court in Richmond, Va., confirmed that the seven-member jury found Rambus (Los Altos, Calif.) guilty on fraud charges brought as counterclaims by Infineon. The claims followed rulings by Judge Robert Payne dismissing all Rambus patent-infringement claims against Munich, Germany-based Infineon, which operates manufacturing facilities in the Richmond area.
The jury took less than a day to consider Infineon's claims that Rambus committed "actual" and "constructive" fraud in its dealings with Infineon through the Joint Electron Device Engineering Council (Jedec) committee that was developing an industry standard for SDRAMs.
The jury found Rambus not guilty on a third count alleging that Rambus violated civil racketeering statutes.
Rambus immediately issued a statement saying it would appeal the jury verdict, adding that it would also file post-trial briefs to set aside the jury verdict.
"We are obviously disappointed in today's verdict and will immediately appeal," said Geoff Tate, Rambus chief executive. "The innovations at issue are Rambus inventions, and the evidence presented at trial made it clear that Infineon knew all along that they were Rambus inventions."
Rambus predicted that the jury's award could be reduced based on a Virginia law that caps damage awards.
Infineon executives declined to comment on the jury verdict.
The Richmond jury rejected the Rambus argument that it was merely trying to protect its intellectual property during the Jedec standards proceedings by failing to disclose its SDRAM patent applications.
Infineon attorney John Desmarais responded during closing arguments on Tuesday (May 8) that Rambus failed to play by Jedec rules on disclosing patents during standards deliberations. Hence, Desmarais urged the jury to award punitive damages as a way to send a signal to the rest of the industry. "The conduct of Rambus must be stopped," Desmarais told the jury.
Judge Payne told jurors they were not obligated to award Infineon punitive damages.
After hovering in the low $13 range through most of the day, shares in Rambus spiked up to about $14.50 in the late afternoon Wednesday before plunging to the $12.75 neighborhood. The stock closed at $12.80, down $0.90, or 6.57 percent, from the previous day's closing price.
