Rambus shares leap on trial news

New developments in the patent lawsuit against Infineon reverse last week's dumping of shares

Shares in Rambus, the microchip intellectual-property company, surged more than 32 percent on Thursday as speculation mounted that it has a stronger case than previously thought in its patent-infringement lawsuit against chip manufacturer Infineon.

Investors are buying Rambus in the hope, fanned by the new evidence and analysts' comments, that Infineon could settle the case out of court. Last week shares dropped with similar speed on speculation that the company's chances for success were more limited than previously thought.

Rambus' lawsuit concerns common types of memory used in PCs, synchronous DRAM and DDR (double data rate) DRAM. Rambus claims to have the right to receive royalties from makers of both kinds of DRAM, based on several patents.

On the morning of 16 March, the judge in the case allowed the trial date to be delayed until 10 April, as Rambus had requested, based on the revelation that new Infineon documents had only recently been provided to Rambus. The transcript of that session was entered into the public record on Wednesday.

Then, on Thursday morning, Morgan Stanley Dean Witter analyst Mark Edelstone wrote in a note to clients that the new evidence could persuade Infineon to settle out of court -- a boost for Rambus' plans. The new developments, he wrote, were "quite positive" for Rambus.

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