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Old January 27, 2010, 03:16 PM
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Nvidia Says Patent Settlement With Rambus Unlikely (Update2) - BusinessWeek

Nvidia Corp., whose graphics chips help run video games, said it won’t negotiate with Rambus Inc. after losing a U.S. trade agency decision that it violated three Rambus-owned patents. “Rambus and Nvidia talked for eight years before they sued us,” David Shannon, Nvidia’s general counsel, said in an interview yesterday in Washington. “I don’t think it’s realistic to think that there’s going to be an agreement any time soon between the two companies.”
Judge Theodore Essex with the U.S. International Trade Commission in Washington said Nvidia infringed three Rambus patents, while two others are invalid. His finding is subject to review by the six-member commission and, if upheld, could lead to a ban on imports of Nvidia chips and products that use them, including some computers made by Hewlett-Packard Co. Shannon said it won’t reach that point.
“Our customers will never have their businesses interrupted,” Shannon said. “Our position is there will be no exclusion order.”
Nvidia has several options to prevent any order banning imports, he said. If the commission sides with Rambus, Nvidia can appeal to a court that specializes in patent law. Nvidia is receiving “no pressure” from customers to settle the case, Shannon said.
Nvidia, based in Santa Clara, California, advanced 44 cents, or 2.7 percent, to $16.65 at 4 p.m. New York time on the Nasdaq Stock Market. Los Altos, California-based Rambus rose 26 cents to $24.20.

Patent Review

In a separate proceeding, the U.S. Patent and Trademark Office is taking a second look at the Rambus patents. The three found to be in violation by Essex were rejected by the agency, Shannon said. Rambus is appealing that decision in a process that will take more than a year, and in the meantime the patents remain valid and enforceable.
“We’re not going to pay on patents that are not valid,” he said.
Shannon said that, should Nvidia lose both before the ITC and the patent office, Rambus would have to accept limits on patent royalties because of an agreement reached last year with the European Commission.
Linda Ashmore, a spokeswoman for Rambus, said the company’s position is the same as that expressed last week, when General Counsel Tom Lavelle said the company is “very interested in having productive constructive settlement discussions with Nvidia whenever they’re ready.”
So Nvidia has been in talks for 8 years and is not looking to settle, and has methods to maintain distribution for their products.
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