Judge throws out FTC case against Rambus

Role reversal

Rambus has won its appeal against an anti-trust ruling by the Federal Trade Commission (FTC).

Judge Stephen J. McGuire, the FTC's chief administrative law judge presiding over the case, yesterday dismissed the FTC ruling against the memory chip designer in its entirety.

Rambus says it expects the publication of a 330-page initial decision explaining the ruling on Monday, February 23, 2004. The company is not entirely out of the FTC woods yet: Judge McGuire's ruling is subject to potential further review by the full commission and review by a US court of appeals. The company also has to contend with last week's overturning of a key patent in Europe, and a forthcoming legal tussle with Micron.

Now for a quote from John Danforth, general counsel for Rambus: "Today's ruling dismissing the FTC case is a fundamentally important step for Rambus as we seek to be fairly compensated for the use of our intellectual property. The ruling adds to the powerful reasoning favoring Rambus that the Federal Circuit issued in January 2003. It is now time, we believe, for these issues to be set aside, and for Rambus patent claims to be resolved on their merits."

A trip down Memory Lane

The FTC filed suit against Rambus in June 2002, accusing the firm of deception of JEDEC, the DRAM standards-setting organisation. It ruled that Rambus
had covertly modified memory patents to incorporate technology which it knew JEDEC was to build into the SDRAM.

In a no holds-barred statement, the FTC accused the company of "violating federal antitrust laws by deliberately engaging in a pattern of anticompetitive acts and practices that served to deceive an industry-wide standard-setting organization, resulting in adverse effects on competition and consumers".

Rambus claimed it held key patents in DDR SDRAM, a competing fast memory standard to its own undisputed design, RDRAM. It demanded royalties from memory makers, some of which coughed up, and some, most notably Infineon and Micron, fought back through the courts.

Rambus suffered a stunning reverse in its case against Infineon in 2001 when it was found guilty of committing fraud in seeking royalties from Infineon for patents relating to DDR SDRAM. In January 2003, a Federal appeal court overturned this verdict, ruling that the trials court was mistaken in its verdict that Rambus did not have a valid patent infringement claims against Infineon.

Most crucially, the appeals court ruled "substantial evidence does not support the implicit jury finding that Rambus breached the relevant disclosure duty during its participation in the (JEDEC) standards committee." ®

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