July 26 (Bloomberg) -- Rambus Inc., a computer-memory chip designer that's been fighting patent cases in court for a decade, lost a case against LSI Corp. and STMicroelectronics NV over controllers used in electronics including GPS devices and computers.
The U.S. International Trade Commission said the companies and its customers didn't violate Rambus patent rights, upholding a judge's findings from March. Notice of the decision was posted on the agency's website yesterday, with a full opinion to be made public after both sides have a chance to redact confidential information.
Rambus, which got 96 percent of its $312.4 million in 2011 revenue from royalties, claimed the companies have incorporated into their chips inventions that Rambus scientists developed to speed the transfer of data. The memory controllers are used in networking gear, televisions, set-top decoders and other devices.
The patents were either invalid or not infringed, the commission said, agreeing with the trade judge's findings that some of the patents were unenforceable because Rambus destroyed documents related to the litigation.
Rambus fell as much as 22 cents, or 5 percent, to $4.10 after the close of trading in New York yesterday on the news.
"We are evaluating our next steps in this matter, which may include a possible appeal," said Thomas Lavelle, senior vice president and general counsel at Rambus. "We remain steadfast in our commitment to protecting our patented inventions from unlicensed use."
Representatives of LSI and STMicro didn't immediately respond to requests for comment.
The case is part of an effort by Sunnyvale, California- based Rambus to extend its intellectual-property enforcement beyond personal computers to communication devices and electronics.
The dispute in this case centers on a type of dynamic random access memory called SDRAM that acts as the main memory in computers.
LSI, based in Milpitas, California, and Geneva-based STMicro denied infringing the patents and challenged their validity. The complaint also names customers of the chipmakers, including Asustek Computer Inc., Cisco Systems Inc., Garmin Ltd., Hewlett-Packard Co., Hitachi Global Storage Technologies Inc. and Seagate Technology Plc.
Broadcom Corp. and Nvidia Corp. were part of the original case before they settled all pending litigation. Rambus had won an earlier case at the ITC against Nvidia, which makes graphics processors, that was on appeal before the settlement.
ITC Judge Theodore Essex found in March that all five Rambus patents were infringed, yet invalid because they sought to cover inventions already protected by other patents. The commission agreed on the invalidity of four patents, while saying the fifth wasn't infringed.
The judge said separately that three patents, named after lead inventor Richard Barth, are unenforceable because Rambus purposely destroyed evidence needed by companies to defend themselves against Rambus's infringement claims. The commission upheld that finding.
Both Rambus and the staff of the ITC, which acts as a third party on behalf of the public, asked the commission to overturn that finding because it was inconsistent with a decision the agency made in the Nvidia case.
The ITC has the power to block imports of products that infringe U.S. patents. Rambus was counting on a victory to persuade the companies to accept a licensing agreement.
Hynix Semiconductor Inc., which has been battling Rambus in courts since 1999, urged the commission to uphold the judge's findings on document destruction because it's trying to overturn a $397 million judgment won by Rambus after a 2006 trial.
A federal judge in California is considering whether Rambus should be precluded from enforcing some of its older patents against Hynix because of the document destruction.
A U.S. appeals court ruled last year that Rambus destroyed documents relevant to patent-infringement trials with Micron Technology Inc. and Hynix.
The case is In the Matter of Certain Semiconductor Chips and Products Containing Same, 337-753, U.S. International Trade Commission (Washington).