FTC Rules Rambus Monopolized DRAM

In a unanimous decision, the Federal Trade Commission found memory chip maker Rambus liable for monopolizing the market through its conduct concerning four memory technologies that were used in dynamic random access memory (DRAM) chips.

The FTC found Rambus withheld information from the Joint Electron Device Engineering Council, a standards group.

According to the agency's opinion, Rambus waited until its technology was included in the JEDEC DRAM standard before attempting to solicit royalty payments from companies who used the standard. When companies balked at licensing, Rambus then sued the companies for patent infringement.

"Rambus's conduct significantly contributed to JEDEC's choice of Rambus's technologies for incorporation in the JEDEC DRAM standards and to JEDEC's failure to secure assurances regarding future royalty rates - which, in turn, significantly contributed to Rambus's acquisition of monopoly power," the FTC said in its decision.

The FTC rejected claims by the chipmaker that JEDEC selected Rambus technologies for their superiority, and that competitors weren't locked into the DRAM standard once it was approved. "These claims fail, both as a matter of fact and as a matter of law," it argued.

To allow Rambus to continue its patent enforcement would mean the regulator would have to look past the company's exclusionary conduct, which it refused to do. Rambus attorney's disputed the claims of the FTC, saying the company complies with JEDEC disclosure policies.

Rambus said the decision will be appealed to the U.S. Appellate Court at a later date.

Under the FTC ruling, Rambus is prevented from enforcing any patent involving JEDEC-compliant products before its withdrawal from the standards body. Additionally, any licensing agreement as a result of this dispute would no longer be valid.

The decision is the latest move in a four-year battle between the FTC and Rambus. In 2002, the regulator first charged the chipmaker with violation of antitrust laws for its failure to disclose information to JEDEC. However, Rambus won on appeal from a FTC administrative judge. The agency appealed, and the topic was brought before the full commission.

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