Rambus Accuses Chipmakers of Collusion

Rambus is continuing its legal onslaught against computer memory vendors, filing an antitrust lawsuit Wednesday against four firms accusing them of banding together to eliminate competition.

The suit was filed in the Superior Court for the State of California against Hynix Semiconductor, Infineon Technologies, Micron Technology, and Siemens AG. Rambus alleges that executives from those four memory vendors colluded to set cost parameters for Rambus' RDRAM and to restrict output of that product in order to raise its price and kill its chances of becoming a mainstream memory technology.

Ongoing Disputes

"What led to this development was the quantity and quality of the evidence. We couldn't ignore our fiduciary responsibility to our shareholders," says John Danforth, Rambus senior vice president and general counsel.

The allegations stem in part from e-mail and other documents made public during the Federal Trade Commission's trial against Rambus. An FTC judge dismissed a complaint that Rambus had improperly deceived a standards-setting organization into adopting its patented memory technology as part of the SDRAM standard.

Those e-mail messages detailed conversations between DRAM vendors expressing their displeasure over Intel's decision to adopt RDRAM as the future memory technology for its products. Danforth says Rambus contends the e-mail and other documents show the DRAM vendors plotted to undermine Rambus and its products by collectively lowering production goals in order to create a supply glut and raise the price of RDRAM during the late 1990s.

Rambus' critics have said the complexity of RDRAM chipsets and the high prices of the memory chips, as well as Intel's failure to deliver a working RDRAM chipset on time, helped seal RDRAM's fate and make SDRAM and DDR SDRAM the industry standards.

"Rambus' allegations made against Infineon in this complaint are old news and without merit," says Christoph Liedtke, an Infineon spokesperson, in a statement. "The failure of RDRAM in the marketplace was the result of high costs and technical issues with Rambus' products as well as strong competition from superior DRAM products provided by Infineon and other DRAM manufacturers."

Representatives from Micron, Siemens, and Hynix were not immediately available for comment.

Litigation History

Rambus designed RDRAM as an alternative to conventional DRAM technology in the early 1990s. The company does not manufacture memory chips, but licenses its designs to companies such as the defendants in its antitrust case.

The antitrust lawsuit is the latest salvo in a legal saga that has stretched for years. Rambus claims the SDRAM standard infringes on some of its patents, and has filed numerous lawsuits trying to collect royalties from DRAM manufacturers that did not license Rambus technology. The holdout DRAM vendors say Rambus failed to inform a memory standards-setting committee that it held patents on certain technologies being considered for the SDRAM standard, violating that committee's rules.

Rambus has prevailed in two legal challenges so far, winning an appeal of a fraud verdict stemming from a trial in Virginia, and a dismissal of the FTC's complaint against the company. Separate litigation related to the Virginia case is pending against Infineon, and FTC lawyers have filed an appeal to the full Commission in their case.

If Rambus can collect royalties on its patents, the amount could reach $3 billion, lawyers for the FTC says in its appeal.

A separate U.S. Department of Justice antitrust investigation against the DRAM vendors is also under way.

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