Rambus Shares Soar After Jury Verdict

Updated from 3/26/08

SAN FRANCISCO -- Shares of RambusRMBS surged to a new 52-week high Wednesday, after the technology company achieved a major legal victory that could open the spigot for new royalty payments.

Jurors in a San Jose, Calif., federal court rejected claims that certain Rambus patents were based on information obtained illegally from industry meetings in the 1990s.

The verdict, which was reportedly reached in less than four hours, is a blow to memory chip companies Hynix Semiconductor, Micron TechnologyMU and Nanya, all of which had sued Rambus for antitrust violations and could now be on the hook for patent infringement.

Shares of Rambus finished regular trading Wednesday up a whopping 39%, or $7.25, at $25.86.

Micron said it plans to appeal the verdict, citing decisions by the U.S. Federal Trade Commission and the European Union, which determined that Rambus had used deceptive tactics to monopolize the memory chip market.

"Micron believes that Rambus has engaged in a pattern of deception, destruction of evidence, false testimony and other improper activities designed to mislead and to extract unjust patent licensing fees and damages," said Micron General Counsel Rod Lewis in a statement.

Rambus, based in Los Altos, Calif., designs and licenses technology related to computer memory. The company is embroiled in multiple suits with memory chip manufacturers, and its stock tends to make big moves up and down as its various cases wend their way through the docket.

Pacific American Securities analyst Michael Cohen described the verdict as a "great win" for Rambus, according to a Bloomberg report.

While Wednesday's verdict applies only to U.S. sales, Cohen said it could encourage settlements covering global sales, which he said could help Rambus collect royalties ranging from $700 million to $11.7 billion over the next 13 years.

Know What You Own: RMBS operates in the semiconductor/memory chip industry, and some of the other stocks in its field include QimondaQI. This stock was recently trading at ($3.96, -2.70%) respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.