RealTime IT News

Judge Dismisses Rambus Antitrust Suit

A federal administrative judge Tuesday dismissed an antitrust lawsuit filed by the Federal Trade Commission against memory chipmaker Rambus over its use of patents.

The ruling comes after a two-year investigation and a recent three month hearing over whether the company deceived the technology industry by not disclosing that it sought patents on chip-making standards, as the FTC claimed. Rambus said the full Commission and/or a United States Court of Appeal could still review the case.

The dismissal means Rambus will not have to forfeit more than a billion dollars in royalty claims for its chip designs. The company doesn't make or sell chips but collects patent royalties for its designs from chipmakers such as Intel . The company's primary chip designs are used to improve the speed of programs used for databases, digital photography and games.

In June 2002, the FTC claimed that the Los Altos, Calif.-based company violated federal antitrust laws by "deliberately engaging in a pattern of anti-competitive acts and practices that served to deceive an industry-wide standard-setting organization, specifically, not disclosing that it was in the process of seeking patents related to the proposed standards."

FTC Chief Administrative Law Judge Stephen McGuire did not immediately issue a traditional court brief. A 330-page initial decision explaining the ruling is expected to be issued to the public on Monday, February 23rd.

"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," John Danforth, senior vice president and general counsel for Rambus said in a statement. "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."

In its case, the FTC attempted to invalidate Rambus' synchronous memory patents obtained during its membership on the Joint Electron Devices Engineering Council (JEDEC), a non-profit organization that promotes technological standards. Rambus participated in the standard setting process between 1991-95.

During Rambus' membership, JEDEC developed and adopted a standard for synchronous dynamic random access memory (SDRAM) . When Rambus joined the group, it had applied for a patent on RDRAM, a competing technology. The FTC produced documents in May that showed before, during, and after Rambus dropped its JEDEC membership, the company made repeated filings to ensure intellectual property rights to the SDRAM standard.

In addition, FTC attorneys produced confidential notes from Rambus' outside legal counsel advising the company to resign from JEDEC and cease applying for patents on SDRAM. Once the SDRAM standard was adopted, Rambus made moves to either collect on royalties or sue those companies that refused to comply, which included Infineon, Samsung, Hitachi, Hyundai, and Micron Technology.

The settlement comes less than a week after the Technical Board of Appeals of the European Patent Office (EPO) revoked one of Rambus' patents on chip technology. The ruling does not affect its U.S. patents, which have been the subject of intense legal wrangling. Rambus has been cleared of fraud charges leveled by German-based semiconductor maker Infineon, which, along with chipmakers Micron and Hynix, is battling to avoid paying royalties to Rambus.

In October, the U.S Supreme Court upheld a lower court ruling that Rambus did not mislead the JEDEC Solid State Technology Association, a standards board, about patents it held relating to DDR SDRAM memory technology, which became the industry standard.

Last April, A federal court of appeals denied a request by German-based semiconductor maker Infineon Technologies to revive its patent infringement case against rival Rambus.