Hyundai Sues Rambus Over Patent Royalties

SEOUL â€”  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.