Mannerisms

If a court decides that certain Rambus patents on SDRAM and DDR are enforceable, then it could claim damages of $10 billion – six times the company’s current market value – pushing its shares to $100.

If the court decides the patents are unenforceable, then Rambus shares could drop to $5.

The court is the US District Court of the Northern District of California. The case is Hynix Semiconductor vs Rambus Inc. Judge Ronald M. Whyte is presiding.

The case turns on whether Rambus failed to disclose its patents to a JEDEC committee engaged in setting standards for the DRAM industry. The patents relate to SDRAM and DDR DRAM, but not to subsequent products like DDR2 and DDR3.

Hynix argues that Rambus violated antitrust and fraud laws by failing to disclose its technology at meetings from 1992 to 1996, then changed patent applications to cover JEDEC specifications.

In 2006, the US Federal Trade Commission |(FTC) ruled that Rambus wrongfully obtained patents, then used them to impose undeserved license fees.

Judge Whyte may, or may not, decide to follow the FTC ruling, but he is not bound by it.

Rambus alleges that, before the JEDEC meetings, it privately told DRAM manufacturers about its SDRAM and DDR technologies, and informed them it intended to seek patents and royalties from licensing the technologies.

Those betting on Rambus shares ahead of Judge Whyte’s ruling, will probably reflect that there’s more to be made on the upside, than can be lost on the downside.