Either way its going to be interesting to see how it plays out.
Rambus Inc. sued one of its best-known customers, Samsung Electronics Co., in a move that sent Rambus shares down nearly 6%.
Rambus, of Los Altos, Calif., develops technology used in memory chips, and also gets royalties from licensing its patents. The company has sued several big makers of memory chips, alleging that their products infringe its patents on that technology, and has also scrapped with the Federal Trade Commission over related issues.
Samsung, the big South Korean electronics company, has long sold chips called RDRAM that are based on Rambus technology. It also sells chips based on a newer Rambus technology called XDR, which is expected to be used in applications that include Sony Corp.'s next PlayStation videogame console.
But Rambus said late Monday that it added Samsung to an existing patent-infringement suit, filed in January in federal court in San Francisco against South Korea's Hynix Semiconductor Inc., and Nanya Technology Corp. and Inotera Memories Inc., both based in Taiwan. That case involves chips that are known by the acronyms DDR2, GDDR2 and GDDR3.
Rambus also filed a separate suit against Samsung in San Jose, Calif., which cites products known by the acronyms SDRAM and DDRM, and controller technology that works with those chips. In that complaint, Rambus said Samsung had breached an auditing provision of a 2000 licensing agreement with the companies since last summer.
"They've been in breach of it for many, many months," said John Danforth, Rambus general counsel. "They haven't fixed the breach."
Besides filing suit, Rambus terminated the licensing agreement with Samsung, which was due to expire June 30. But Harold Hughes, Rambus chief executive officer, said in prepared remarks that his company hoped to "normalize" relations with Samsung in the near future.
A Samsung spokesman said it had no comment on the allegations.
Rambus shares, which have swung back and forth on litigation news, traded at 4 p.m. at $14.75, off 92 cents, on Nasdaq.
Hamed Khorsand, an analyst at BWS Financial, wrote in a research note that the litigation expenses and uncertainties, and a possible reduction in revenue from Samsung, would cause the stock to come under selling pressure.
Mr. Danforth estimated that revenue from Samsung to Rambus amounted to less than $3 million per quarter.
