Hynix told to pay damages to Rambus

A long-running legal saga that has turned into one of the computing industry?s most controversial intellectual property disputes reached a potential turning point on Monday when a US jury ordered Hynix of South Korea to pay California-based Rambus damages of $307m.

The jury award sent shares of Rambus up by more than 13 per cent as Wall Street looked forward to the prospects of a broader victory in the company?s campaign to extract damages and future royalties from some of the world?s biggest makers of memory chips.

Hynix shares dropped 2.7 per cent to Won33,000 by early Tuesday, while its larger rival Samsung, which is also sued by Rambus, also fell 2.7 per cent to Won655,000.

A lawyer for Hynix said after the ruling that the South Korean company would continue to push a separate claim that the patents on which Rambus based its case were anti-competitive, and so should be ruled unenforceable.

Rambus rose to become one of the chip industry?s hottest stocks in the late 1990s on hopes for its technology, which speeds the rate at which DRAM memory chips can retrieve data. However, the big manufacturers that dominate the industry balked at paying its high royalty rates, eventually devising a different technology between them to achieve the same ends.

The Californian company filed patent infringement claims against Hynix, Infineon and Micron Technologies, and last year added Samsung to the list after the world?s biggest maker of memory chips failed to agree terms to renew an existing royalty agreement.

Infineon last year settled its case with Rambus, agreeing at the time to license the company?s technology and pay up to $100m if the other companies resolved their disputes. Rambus also filed private antitrust claims against the manufacturers.

The small chip company has drawn fire, however, over the way it patented some of its ideas, as well as its handling of the legal cases.

The chipmakers accused it of acting unfairly to embed its ideas in industry-standard technology, then later trying to claim royalties ? an accusation that prompted an investigation by the Federal Trade Commission.

The company?s handling of the case has made it one of the most prominent targets of critics who claim that abuse of the US patent system exposes tech companies to unfair claims, said Mark Lemley, a law professor at Stanford University.

Last year a judge rejected Rambus? cases against Infineon after ruling that the company destroyed documents and created false records to help its case, but Hynix failed to press a similar claim in its own defence.