Appeals Court Dismisses Fraud Verdict Against RambusAppeals Court Dismisses Fraud Verdict Against Rambus

SAN JOSE, Calif. (AP)--A federal appeals court dismissed a fraud verdict against memory-chip designer Rambus Inc. on Tuesday, saying a lower court had made mistakes and a jury's decision was not supported by evidence.

The appeals court in Washington vacated a jury's verdict that Rambus had committed fraud while working with a standards-setting board. Rival chip company Infineon AG alleged Rambus pushed for standards while holding or pursuing patents on the same technology.

The decision also revived Rambus' claim alleging Infineon infringed on Rambus' patents on technology used in computer memory chips, called SDRAM.

Los Altos, Calif.-based Rambus' stock surged on the news.

Early in the case, a judge dismissed Rambus' complaints, leaving jurors to decide Infineon's claims. In May 2001, jurors determined Rambus engaged in fraud and awarded $3.5 million in punitive damages.

In August 2001, the judge set aside much of the award, but Rambus was ordered to pay $350,000 in punitive damages to Infineon as well as $7.1 million in legal fees. Rambus also was blocked from filing more patent lawsuits against Infineon related to the memory chips.

On Tuesday, a Rambus spokesman said the company would not comment until it reviewed the decision.

Matthew Schmidt, a spokesman for Infineon, said the company is studying the decision.

"We're disappointed in that ruling and are studying it now," he said. "The company does expect to request a rehearing by the court."