By Susan Decker and Ian King
July 26 (Bloomberg) -- Rambus Inc., a seller of technology used in computer memory, won its patent-infringement fight against Nvidia Corp. over imports of computer-graphics chips.
Nvidia violated Rambuss patent rights, the U.S.
International Trade Commission in Washington said in a decision on its website today. The ITC said an order should be issued to ban imports of some products containing Nvidia chips, a move that would be subject to review by U.S. President Barack Obama.
Rambus jumped as much as 18 percent to $23.19 in extended trading in New York. Nvidia rose about 1 percent.
Rambus, which got about 96 percent of its $113 million in revenue last year from patent licensing royalties, filed the complaint against Nvidia after the two were unable to reach a licensing agreement. Rambus, based in Los Altos, California, has spent more than a decade suing computer-memory chipmakers who refused licensing deals, including Samsung Electronics Co.
"It puts Rambus in the dominant bargaining position,"
Jeff Schreiner, an analyst for Capstone Investments Inc. in San Diego, said in an interview. "A whole bunch of other companies that were watching this will now likely sign licensing deals."
Schreiner has a "strong buy" rating on Rambus stock, which he said he doesnt own.
Samsung Agreement
The ITC case also named products that use Nvidia chips, including some Hewlett-Packard Co. computers, motherboards made by Asustek Computer Inc. and products from Biostar Microtech International Corp. Most of the chips were made in Taiwan and sold to computer-parts makers. Santa Clara, California-based Nvidia was handling the defense on behalf of its customers.
A judge with the ITC said in January that Nvidia was infringing three Rambus patents, while two other patents were ruled invalid. Each company asked the agency to review the part of the determination they lost. In its announcement today, the commission sided with the judge on the three patents.
It ordered the parties to post a bond of 2.65 percent of the value of the imports to continue bringing the products into the U.S. during the presidential review period.
The patents relate to controllers that connect the memory and the graphics chips. The complaint targets Nvidias GeForce, Quadro, nForce, Tesla and Tegra lines.
Samsung in January agreed to pay $900 million to end its legal dispute with Rambus and sign a new licensing deal. The commission said in a May 27 order that it wanted to determine if Nvidia was protected by the Samsung settlement or if Rambus exhausted its rights on the technology.
Graphics Chips
Rambus also has disputes pending with Koreas Hynix Semiconductor Inc. and Micron Technology Inc., based in Boise, Idaho, over patented technology related to dynamic-random access memory, or DRAM, which acts as the main type of memory in personal computers.
The patents in the Nvidia case are newer than those in the DRAM cases. Rambus does license the patents to other companies, and the win may help lure more companies that make memory controllers to its licensing program.
Nvidia is the second-largest maker of graphics chips, behind Intel Corp., and most of its chips are made by Taiwan Semiconductor Manufacturing Co.
Under Chief Executive Officer Jen-Hsun Huang, the company is trying to spread the use of its graphics chips, which are typically the key part in for plug-in cards for personal computers, to mobile devices and server computers.
The ITC case is In The Matter of Semiconductor Chips Having Synchronous Dynamic Random Access Memory Controllers and Products Containing Same, 337-661, U.S. International Trade Commission (Washington).
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