FTC Likely to Ignore Rambus Court Victory

Wednesday’s decision by a U.S. appellate court clearing Rambus of fraud charges is not likely to a play a role in the recent Federal Trade Commission (FTC) motion to declare a summary judgment against the Los Altos, Calif.-based semiconductor chip designer. The FTC claims Rambus has forfeited its right to a trial because of its actions in allegedly destroying documents germane to an FTC action against the company.

M. Sean Royall, deputy director of the FTC’s Bureau of Competition, and lead trial counsel said, “Our trial team is reviewing the Federal Circuit’s decision to determine what if any bearing it may have on the Commission’s federal antitrust suit against Rambus. However, given the significant differences in the factual and legal issues raised by the FTC’s antitrust claims and Infineon’s fraud claims, we do not expect that this ruling will have a substantial impact on our case going forward.”

In Wednesday’s decision, the appeals court reversed a Virginia lower court ruling. The suit began when Rambus filed patent infringement claims against rival Infineon Technologies . A judge dismissed the patent infringement claims and a jury found Rambus guilty of fraud for failing to disclose it held patents or pending patents for technologies that were ultimately adopted by a memory chips standards group.

Rambus is also involved in ongoing patent infringement claims against Hynix Semiconductor and Micron Technology.

In June of 2002, the FTC charged Rambus with violating federal antitrust laws by deliberately engaging in a pattern of anti-competitive acts and practices that served to deceive the industry-wide standard-setting organization cited in the Infineon case, resulting in alleged adverse effects on competition and consumers. Last month, the FTC further charged Rambus with destroying documents relevant to the case.

The FTC claims Rambus has forfeited its right to a trial. Rambus says it acted properly under its “document retention” policy, and the firm strongly objected to the motion for default judgment, claiming the FTC hasn’t proved its case.

If Rambus is unable to stop the FTC action, the company could be forced to forfeit more than a billion dollars in royalty claims for its chip designs. Rambus doesn’t make or sell chips but collects patent royalties for its designs from chip makers such as Intel. The company’s primary chip designs used to improve the speed of programs used for databases, digital photography and games.

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