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Court overturns Rambus DRAM FTC orders

-April 23, 2008

Rambus Inc has scored another legal victory regarding DRAM and standards setting, this week announcing that the US Court of Appeals for the DC Circuit has overturned the Federal Trade Commission's (FTC) decisions regarding the Los Altos, Calif-based company and remanded the matter back to the FTC for further proceedings.

The FTC brought anti-trust charges against Rambus in 2002 and after a 2003 trial had ruled that Rambus monopolized the DRAM market and acted inappropriately during the JEDEC standards setting process. On that, the FTC in February 2007 barred Rambus from making misrepresentations or omissions to standard-setting organizations and required Rambus to license its SDRAM and DDR SDRAM technology and set maximum allowable royalty rates it can collect for the licensing. It also barred Rambus from collecting or attempting to collect more than the maximum allowable royalty rates from companies that may already have incorporated its DRAM technology and required Rambus to employ an FTC-approved compliance officer to ensure that the company’s patents and patent applications were disclosed to industry standard-setting bodies in which it participates. The FTC modified that order in March 2007 to allow the royalties to be collected, but put into escrow. During the now six-year-long process, Rambus was further found liable for violating Section 2 of the Sherman Act., which forbids misconduct to dominate a market.

In its decision released Tuesday, the appellate court determined the FTC failed to demonstrate that Rambus inflicted any harm on competition. “The Commission failed to sustain its allegation of monopolization,” the decision reads. “We also address whether there is substantial evidence that Rambus engaged in deceptive conduct at all, and express our serious concerns about the sufficiency of the evidence.”

The decision follows a March jury ruling that Rambus had not violated antitrust laws by monopolizing, or attempting to monopolize, six technology markets through its patents cover features in JEDEC industry standards for DRAM interface technology. That decision is expected to result in new royalty payments for Rambus.

"As we have contended all along, Rambus did nothing wrong during its participation in the JEDEC standard-setting organization, and now the Court of Appeals has confirmed our point of view,” said Tom Lavelle, senior VP and general counsel at Rambus, in a statement. “Rambus has had to endure years of uncertainty, lost business and enormous legal fees defending this case, and we are thrilled to have this portion behind us. This decision, especially combined with the jury verdict in March reaching the same conclusion, should put the issue to rest and allow us to focus on running our business."

Rambus said it will further discuss the US Court of Appeals’ decision on Thursday during its scheduled quarterly conference.

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