Computer chip designer Rambus Inc. has lost a crucial round in its legal fight to enforce patent claims that could generate $1 billion in royalties.
A federal judge in Virginia on Friday dismissed Rambus' allegations that German chip maker Infineon Technologies infringed on patents for chip designs that help accelerate the speed of video game consoles and personal computers.
The ruling represented a significant setback for Los Altos-based Rambus, which is pursuing a dozen patent infringement claims against Infineon, Hyundai and Micron. The chip makers are suing Rambus for breach of contract and seeking to invalidate Rambus patents.
Investors reacted swiftly to the news, released shortly before the stock market closed for the week. The Nasdaq Stock Market temporarily halted trading in the stock. When trading resumed, Rambus' shares plunged $3.55, or 19.6 percent, to close at $14.60.
The outcome of the patent battles will have a huge impact on Rambus' fortunes.
If Rambus prevails, analysts estimate the company could collect $1 billion in royalties from chip sales during the past decade.<
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