Rambus Created a Monopoly, Says FTC

The U.S. Federal Trade Commission on Wednesday unanimously decided that Rambus unlawfully created a monopoly for certain technologies used in the DRAM (dynamic RAM) memory chip standard.

The decision is a blow to Rambus, which won an earlier round in the battle when an administrative law judge in 2004 dismissed the FTC's antitrust charges against it. Wednesday's ruling is the result of an appeal by the FTC of that decision.

The commission did not decide how best to penalize Rambus for the conduct. It has asked for involved parties to submit opinions on ways to remedy the situation. Comments can be filed until Sept. 15, said John Danforth, senior legal advisor for Rambus, during a call to discuss the ruling.

Drawn-Out Litigation

The decision comes after the FTC, in 2002, charged Rambus with violating antitrust laws by deceiving a standards-setting organization. The FTC says that while participating in the Joint Electron Device Engineering Council's (JEDEC's) process of setting the SDRAM (synchronous DRAM) and DDR SDRAM (double data rate SDRAM) standards, Rambus deliberately hid its relevant patents and patent applications. JEDEC then set the standards without knowing that Rambus held patents relevant to the standards, the FTC alleges. Rambus later revealed its patents during patent infringement lawsuits against JEDEC members that used the standard.

"Rambus's abuse of JEDEC's standard-setting process was intentional, inappropriate, and injurious to competition and consumers alike," Jon Leibowitz, commissioner for the FTC, wrote in a statement about the decision.

Appeal Likely

Rambus disagreed with the decision. "We are disappointed that any form of liability was found," said Danforth. "It's highly likely that, depending on the remedy, we will take an appeal on the liability ruling."

While Rambus didn't have the opportunity to read the ruling before the conference call, the company said the decision should only affect certain technologies developed by Rambus and that the decision or remedy shouldn't impact its other ongoing litigation, including cases against Hynix Semiconductor and Micron Technology.

Danforth said the ruling appears to be relevant only to DDR and not the DDR2 standard, which was created in 2003, long after Rambus' participation in JEDEC ended.

The ruling also doesn't appear to affect Rambus' patent holdings. The FTC appears to conclude that Rambus legitimately earned patents but that the company amplified its monopoly position based on its lack of disclosure to JEDEC during the standards-setting process, Danforth said.