Aug. 10, 2001 – New York, NY – A class action lawsuit has been filed against Rambus Inc. on behalf of all shareholders who purchased common stock between February 11, 2000 and May 9, 2001.
The complaint, filed in the US District Court for the Northern District of California, alleges that Rambus and some of its officers and directors violated the federal securities laws by disseminating false and misleading information about the company. Specifically, the suit alleges that Rambus falsely promoted its patents and technologies relating to SDRAM chips and collected millions of dollars in royalties from the licensing of the SDRAM technology to other companies.
The suit states that as a result of the income generated from these licensing arrangements and the enormous amount of royalties Rambus was telling investors it would collect in the future from licensing its SDRAM patents, the common stock of Rambus surged to as high as $450 per share prior before splitting four for one during the class period.
In the course of its self-promotion, however, Rambus failed to disclose to investors that its SDRAM patents were illegally obtained during meetings at the Joint Electronic Devices Engineering Council, an association of semiconductor manufacturers and designers that jointly develop industry-wide, open technical standards for semiconductor products, including SDRAM technology, the suit alleges.
The complaint alleges that Rambus attended at least fifteen JEDEC committee meetings in which the development of an industry standard for SDRAM technology was discussed.
On August 8, 2000, Rambus sued Infineon Technologies AG for patent violations, claiming that Infineon used SDRAM technology without paying a licensing fee to Rambus. Infineon counterclaimed, alleging (1) that the patents were invalid and (2) fraud based on Rambus’ improper conduct during the JEDEC committee meetings. On May 9, 2001, a jury found that the SDRAM patents had in fact been fraudulently obtained. On August 9, 2001, the Court in the Infineon case confirmed the jury’s finding with regard to the SDRAM patents, ordered that Rambus pay Infineon $7.1 million in legal fees, and prohibited Rambus from pursuing patent-infringement litigation against Infineon for its SDRAM products.