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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)
 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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