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* Rambus says relevant documents were all produced

* Appeals judge says Rambus doesn’t know what was shredded

* Other judge: ITC may use wrong standard to take cases

By Diane Bartz

WASHINGTON, Oct 6 (Reuters) – Chip technology company
Rambus Inc (RMBS.O) was quizzed in court about destroyed
documents and its own use of its patents as graphics chip maker
Nvidia Corp (NVDA.O) sought relief from expensive licensing
fees.

The two sides squared off on Thursday before the U.S. Court
of Appeals for the Federal Circuit over whether Nvidia
infringed Rambus patents for controlling and managing the flow
of computer data to and from a chip’s memory.

The U.S. International Trade Commission, which hears patent
cases involving imports, had previously found Nvidia infringed
Rambus chip patents and issued an order barring the importation
of any chip made with the infringing technology.

Nvidia licensed the Rambus technology at royalty rates of
between 1 percent and 2 percent depending on the type of memory
controller involved, to allow its chips to enter the country,
but the legal battle has continued.

The ITC had found that Nvidia infringed three patents but
did not infringe two others. Both sides appealed to the circuit
court and the arguments were consolidated.

Part of the battle has centered on whether Rambus destroyed
documents to avoid having them used against it in litigation.

Rambus has acknowledged document destruction but said it
was part of ordinary business practices.

Judge Kathleen O’Malley, part of a three-judge panel that
heard the case, took issue with an attorney for Rambus who said
the company produced the documents that were requested and that
all relevant documents were preserved.

“You admit you have no idea what was destroyed! You have no
record of what was destroyed!” she said.

“Remember, you saved the ones that helped you and destroyed
the ones that hurt you,” O’Malley said at another point.

The appeals court previously ruled in cases between Rambus
and Micron Technology (MU.O) and Hynix Semiconductor
(000660.KS) that Rambus destroyed documents inappropriately.
The cases have been remanded back to lower courts for further
consideration.

The battle is a key one for Nvidia, whose core business
relies on the sale of specialized graphics cards.

Judge Raymond Clevenger on Thursday repeatedly asked
whether Rambus had proved that it used the patents that it was
seeking to defend.

Companies may not sue at the International Trade Commission
unless they show that they are using the patent domestically.
Rambus licensed the patents, and used that to proceed with the
lawsuit.

Clevenger said district courts cannot order production or
importation of infringing products to cease since the Supreme
Court said in a 2006 decision that an injunction should not
necessarily follow a finding of infringement. “It’s a factor we
should think about,” he said.

Rambus and others go to the ITC to file patent complaints
because the trade commission, unlike U.S. district courts, can
bar the importation of devices made with infringing
technology.

The case against Nvidia and others that was before the
International Trade Commission is number 337-661. The U.S.
Court of Appeals for the Federal Circuit case numbers are
2010-1483 and 2010-1556.
(Reporting by Diane Bartz; Editing by Tim Dobbyn)

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