SAN FRANCISCO—South Korea's Samsung Electronics Co. Ltd. will pay abut $900 million over five years to license technology from Rambus Inc. under the terms an agreement announced Tuesday (Jan. 19) that settles all litigation between the two companies.
Samsung (Seoul, South Korea) will pay Rambus (Los Altos, Calif.) an initial payment of $200 million plus about $25 million per quarter over the next five years to license Rambus' patent portfolio, including a perpetual fully paid-up license to certain current DRAM products, the companies said. As part of the agreement, Samsung will also invest $200 million in Rambus, the companies said.
The quarterly payment is fixed at $25 million per quarter through 2010, said Sharon Holt, senior vice president of licensing and marketing at Rambus. Starting in 2011 the quarterly payment becomes variable and could go up or down based on Samsung's sales, Holt said.
Samsung admitted no wrongdoing as part of the agreement, Rambus said.
The companies also announced that they will work together on a new generation of memory technologies, initially focusing on graphics and mobile memory solutions. They said they would also review a potential collaboration on server and high-speed NAND flash memories.
Harold Hughes, Rambus president and CEO, said Rambus employees are very excited about the prospect of working together with Samsung, which he called the world's premier memory technology company.
Rambus and Samsung currently have litigation in progress on two fronts. A lawsuit brought by Rambus in 2004 against Samsung as well as Hynix Semiconductor Inc. and Micron Technology Inc. was supposed to go to trial this month, but the judge in the case is currently considering a motion filed by Micron to push back the start date by two months. The trial has already been delayed once.
Rambus also has patent infringement litigation against Samsung and other defendants pending trail in U.S. District Court in San Jose, Calif. Thomas Lavelle, Rambus' general counsel, said Rambus and Samsung would ask the courts to dismiss all complaints the companies have pending against each other. Rambus will proceed with the litigation against Micron and Hynix in San Francisco, Lavelle said.
"This agreement does not change our claims against Hynix and Micron in the price-fixing case," Lavelle said. "With Samsung being dropped from the case, the case becomes less complicated."
Lavelle said the agreement does not compel Samsung to cooperate with Rambus in litigation against other companies.