All imports of NVIDIA graphics chips have been banned, after NVIDIA lost a intellectual property dispute with Rambus.  (Source: NVIDIA)

The suit claims that NVIDIA illegally used technology owned by Rambus in its memory controller.  (Source: NVIDIA via Guru3D)
Graphics maker is appealing the decision, though

If there's one patent monger more famous than NTP, it's Los Alamos, California-based Rambus.  With a market cap of $2.24B USD, one would think Rambus made a hit product, but it in fact doesn't make anything -- it merely files and buys patents and then pursues license agreements on those patents.  In total, Rambus made 96 percent of its $113M in revenue last year through licensing.  When deals fall through, it's more than happy to sue.

Graphics chipmaker NVIDIA has found itself in an awkward position after losing a major case against Rambus.  The U.S. International Trade Commission (ITC) in Washington ruled yesterday that NVIDIA infringed on three patents owned by Rambus.  The ITC then ordered all imports of NVIDIA chips banned.

Among the company's highest profile clients that may be effected by the ban include Hewlett Packard, ASUSTek, and Biostar -- which use NVIDIA chips in their computers and/or motherboards.

Jeff Schreiner, an analyst for Capstone Investments Inc. in San Diego warns, "It puts Rambus in the dominant bargaining position.  A whole bunch of other companies that were watching this will now likely sign licensing deals."

NVIDIA's current plan is to license the patents temporarily in Europe, where Rambus in an antitrust case agreed to license its memory controller technology at a rate that wouldn’t exceed 40 cents per unit.  

The good news about that is that NVIDIA should be able to avoid mass disruption to its OEM partners.  The bad news is that some products may still be banned from sale, though, and NVIDIA will likely lose its right to sell its current stock held in the U.S.
The ruling will now be subject to review by President Obama, who has the power to make changes to the ruling.

NVIDIA is currently appealing the ruling.  It is also seeking review of the three patents involved, which it claims are invalid.  It already succeeded in invalidating two of the five patents that Rambus originally used in the suit.

Rambus currently has a pending civil suit against NVIDIA as well.  Rambus recently settled a similar suit with Samsung for $900M USD.  It currently has pending suits over dynamic-random access memory (DRAM) technology going against South Korea’s Hynix Semiconductor Inc. and Boise, Idaho-based Micron Technology Inc.

The current ruling deeply impacts both NVIDIA and its production partner Taiwan Semiconductor Manufacturing Co.  At the very least it cuts into their bottom lines, possibly forcing them to raise prices.  That's pretty much the last thing that NVIDIA -- who came late to the most recent round in the graphics war -- needs.

"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein

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