Rambus loses FTC antitrust appeal on chip patents
This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Rambus Inc. engaged in ''deceptive conduct'' in its bid to control patents for high-speed computer-memory chips, the Federal Trade Commission said in a ruling that may limit the company's ability to collect royalties.

The full commission said Wednesday that Rambus unlawfully monopolized four aspects of the industry standard for memory chips. The 5-0 ruling overturned an agency judge's previous decision to dismiss the case. Rambus said it will appeal.

Rambus, a chip designer, was accused of attending industry standard-setting meetings in the early 1990s and then secretly amending patent applications to ensure they would meet the standard. The agency rejected Rambus' arguments that it was the victim of an industry that colluded to steal Rambus technology and put it out of business.

Rambus, which designs the technology that computers use to store data in active memory, has emphasized for several years that it disclosed the patents to rivals Micron Technology Inc. and Hitachi Ltd. before the standards-setting discussions began.

''Rambus was able to distort the standard-setting process and engage in anti-competitive 'hold up' of the computer-memory industry,'' the FTC said in its decision. ''Conduct of this sort has grave implications for competition.''

The FTC staff contends that Rambus shouldn't be allowed to collect royalties on the patents, issued in 1999. Rambus earned $34.7 million, or 83 percent of its revenue, from royalties in the fourth quarter.

Rambus accuses the chip industry of conspiring to use the company's patented inventions without paying royalty fees. Rambus points to price-fixing convictions against executives of the world's biggest chipmakers, and in some cases the companies, as proof of its claim that the industry used pricing to exclude Rambus designs from wider use.

Intel Corp., the world's biggest maker of microprocessors, tried to make Rambus designs the industry standard in an initiative that was opposed by the memory chip companies.

The commission's decision ''confirms Micron's position that Rambus illegally obtained monopoly power by deceiving members of JEDEC,'' said Rod Lewis, general counsel for Micron, which has operations in Lehi.

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