UPDATE 2-Rambus wins U.S. ITC decision against Nvidia
* U.S. ITC finds 3 of 5 Rambus patents infringed
* ITC can bar imports of devices with infringing tech
* Rambus shares rally 3 percent, Nvidia slides 3.5 pct (Adds comments from Nvidia and Rambus lawyers, details from U.S. PTO)
By Ian Sherr
SAN FRANCISCO, Jan 22 (Reuters) - Graphics chip designer Nvidia Corp (NVDA.O) violated three of five patents held by Rambus Inc (RMBS.O), the U.S. International Trade Commission ruled on Friday, paving the way for a possible U.S. ban on the import of some Nvidia products.
Shares of Nvidia slid 3.5 percent while Rambus -- which often reacts sharply to news of its ongoing patent disputes -- gained 3 percent on the Nasdaq.
Los Altos, California-based Rambus has filed lawsuits against several technology companies in the past decade, claiming they violated patents held by the memory chip designer.
The ITC decision, which stems from a complaint Rambus filed in 2008, is a blow for Nvidia, whose core business relies upon the sale of specialized graphics cards that may contain the infringing technology. The commission is a popular venue for patent litigation because it can bar the imports of products made with infringing technology into the United States.
Nvidia's general counsel, David Shannon, said the company will continue to contest the initial decision by the commission. If the ITC upholds the ruling, then Nvidia may have to license the technology patents in question from Rambus.
That could be costly. For example, when Samsung settled with Rambus and licensed its technology for five years, the agreement included a quarterly payment of roughly $25 million.[ID:nN1998943]
"We would be interested in having productive settlement discussions with Nvidia," said Rambus General Counsel Tom Lavelle.
However, the U.S. Patent and Trademark Office has initially ruled that Rambus may not have full claim to some of the patents involved in the current dispute with Nvidia. If that is finalized, it could put an end to any ITC actions. [ID:nN24320612]
"We're going to continue to take the necessary steps to move forward with our arguments, not necessarily just with the ITC, but certainly in the Patent and Trademark Office," Shannon said, adding he expects a decision later this year.
Rambus' Lavelle said in a statement that he is pleased with the preliminary ruling, and plans to request a review of findings that did not go his company's way as the case works toward a final decision.
"We will continue to vigorously protect our patented inventions for the benefit of our shareholders and in fairness to our paying licensees," he said.
In addition to Nvidia and Hewlett-Packard Co (HPQ.N), Rambus has also filed suit against ASUSTek Computer, Micro-star International (2377.TW) and Pine Technology Holdings 8013.HK.
Other companies named in that suit were MSI Computer Corp, BFG Technologies, Biostar Microtech Corp, Diablotek Inc, EVGA Corp, G.B.T Inc, Giga-byte Technology Co, Palit Multimedia Inc, Palit Microsystem and Sparkle Computer Corp.
Rambus originally filed suit in federal court in San Francisco charging that Nvidia had infringed 17 patents. No dollar amount was attached to the suit, but Rambus has won millions in similar suits.
The case stands before the International Trade Commission. The case number is 337-661. (Additional reporting by Diane Bartz in Washington, D.C.)
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