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Agreement with SK Hynix
6 Months Ended
Jun. 30, 2013
Patent License Agreement [Abstract]  
Agreement with SK Hynix
Agreement with SK Hynix
On June 11, 2013, Rambus, SK Hynix and certain related entities of SK Hynix entered into a settlement agreement, pursuant to which the parties have agreed to release all claims against each other with respect to all outstanding litigation between them. Pursuant to the settlement agreement, Rambus and SK Hynix entered into a semiconductor patent license agreement on June 11, 2013, under which SK Hynix licenses from Rambus non-exclusive rights to certain Rambus patents and has agreed to pay Rambus cash amounts over the next five years as described below. Under the license agreement, Rambus has granted to SK Hynix (i) a paid-up perpetual patent license for certain identified SK Hynix DRAM products and (ii) a five-year term patent license to all other DRAM and other semiconductor products. Each license is a non-exclusive, non-transferable, royalty-bearing, worldwide patent license, without the right to sublicense, solely under the applicable patent claims of Rambus for such licensed products, to make (including have made), use, sell, offer for sale and/or import such licensed products until the expiration or termination of the license pursuant to the terms of the license agreement. The license agreement requires that SK Hynix pay Rambus cash payments over the next five years of a fixed amount of $12 million each quarter, commencing in the quarter ending September 30, 2013. In addition, additional payments or certain adjustments to the payments by SK Hynix to Rambus under the license agreement may be due for certain acquisitions of businesses or assets by SK Hynix involving licensed products. The license agreement and the licenses granted thereunder may be modified under certain conditions and may be terminated upon a material breach by a party of its obligations under the agreement, a bankruptcy event involving a party or a change of control of SK Hynix subject to certain conditions.
The agreement with SK Hynix is a multiple element arrangement for accounting purposes. For a multiple element arrangement, the Company is required to determine the fair value of the elements which include antitrust litigation settlement, settlement of past infringement, and license agreement. The revenue associated with the various elements will be recognized when the first payment is due in July 2013 provided all other revenue recognition criteria are met. The Company is in the process of valuing the multiple elements and expects to complete the valuation by the end of the third quarter of 2013.