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FTC drops Rambus 'patent ambush' claims

Seven year legal battle is over

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US regulators have finally thrown in the towel after seven years of battling memory chip designer Rambus in court.

The Federal Trade Commission today said it's officially dropped claims Rambus violated antitrust laws by hoodwinking the JEDEC (Joint Electron Device Engineering Council) industry standards group into approving memory technologies for which the company had been quietly obtaining patents.

"We are pleased to have finally put this matter behind us," said Rambus general counsel Thomas Lavelle in a statement.

The FTC originally filed antitrust charges against Rambus in 2002, claiming the company deceived the JEDEC by its failure to disclose intentions of patenting technology that would eventually become part of the DDR SDRAM specification. They argued the industry would have used different technologies or immediately required a cap on royalties had they known about the patents.

It wasn't until after the standards were adopted and locked in that Rambus revealed the patents through demanding royalties and filing lawsuits against JEDEC members who adopted the standard, the FTC's filing alleged.

Rambus claims it never purposefully hid the patents while it was a member of the JEDEC. It's just that nobody asked.

The case has dragged on and on over the years, with Rambus and the FTC winning various rounds of the legal battle as it slowly wound itself up the legal chain. The FTC's biggest hurtle in the case was showing adequate evidence that Rambus' high royalty rates have resulted in a less competitive market.

Eventually, the legal fracas landed on the steps of the US Supreme Court. But the top court turned its nose up at the idea of reversing a decision the District of Columbia Circuit of appeals had tossed out in April.

"While we remain disappointed by the decision of the Court of Appeals, we of course respect the Court's opinion and will move forward," said Richard Feinstein, Director of the Bureau of Competition in a statement. "The standards-setting issues that were at the heart of this case remain important, both as a matter of antitrust policy, and in order to protect consumers, and we will remain vigilant in this area."

Rambus is still involved in legal battles with several memory chip makers such as Hynix and Samsung over collecting royalties. Hynix is currently appealing a proposed judgment to pay Rambus $379m in addition to future memory chip royalties. ®

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