Rambus Says FTC Has the Wrong Man

Answering charges by
the Federal Trade Commission (FTC)
that it engaged in anti-competitive
practices, memory chipmaker Rambus Inc. responded today
that the Commission got the wrong man.

“We think the FTC is legitimately concerned with a legitimate issue,” said
John Danforth, Rambus’ general counsel, on a late afternoon conference call.
“But Rambus was mindful of the rules and the only way you can charge Rambus
with a violation of those rules is to stretch the rules beyond recognition.”

Yesterday, the FTC filed a case against Los Altos, Calif.-based Rambus,
accusing it of deceiving the Joint Electron Device Engineering Council
(JEDEC), a standards body, by not revealing its work on several pending
patents that would allow it to effectively control standards JEDEC put in
place. The FTC voted 5-0 to bring the charges, saying Rambus stood to gain
$1 billion from the technology over its lifetime.

But Danforth claimed those rules were not in effect at the time, since
Rambus was not a “first presenter,” or chief sponsor, of the technology
standards under question. He said many JEDEC members shared Rambus’ view of
the rules.

“No DRAM manufacturer made the kind of disclosure of their patent
applications that are now being demanded after the fact,” he said.

The FTC said its case is meant as a shot across the bow for Rambus and
others in the industry over deceptive practices in the standards process.

“The message is this: If you are going to take part in a standards process,
be mindful to abide by the ground rules and to participate in good faith,”
said Joseph Simmons, the director of the FTC’s bureau of competition.

Danforth agreed with the principle, but said Rambus did nothing wrong. “We
are not the correct focus for the FTC’s legitimate concerns,” he said.

The Justice Department has opened an investigation of the DRAM chip sector,
putting big-name semiconductor companies, such as Micron Technology and
Samsung, in the hot seat. Both companies have received grand jury subpoenas
for information in the investigation.

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