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Appeal court overturns FTC Rambus ruling

James Nurton, London

Rambus has won its appeal against a Federal Trade Commission (FTC) ruling that found it guilty of uncompetitive behaviour – the company’s second court victory in less than a month

In a decision yesterday, the US Court of Appeals for the District of Columbia Circuit ruled that the FTC had "failed to sustain its allegation of monopolization" in its 2006 ruling.

The FTC had found that the computer technology developer had unlawfully monopolized computer memory markets through deceptive conduct, in particular by not disclosing its patents to standards-settings organization the Joint Electron Device Engineering Council (JEDEC).

By way of remedy, the FTC capped the royalty rate Rambus can collect from licensing its patents.

But the appeal court said: "The Commission failed to demonstrate that Rambus’s conduct was exclusionary under settled principles of antitrust law."

Having reached that conclusion, the court also expressed its "serious concerns about the breadth the Commission ascribed to JEDEC’s disclosure policies and their relation to what Rambus did or did not disclose".

The FTC’s action against Rambus dates back to June 2002, when it accused the company of failing to disclose that it was actively working to develop, and possessed, a patent and several pending patent applications that involved specific technologies ultimately adopted in JEDEC standards.

In February 2004, the charges were dismissed in an initial decision by an administrative law judge. The FTC’s complaint counsel appealed the decision to the Commission, which overturned the administrative ruling in July 2006, and issued its remedy in February 2007.

The FTC voted to issue the opinion and order three-to-two, with two commissioners arguing that Rambus should have faced stiffer sanctions.

The DC court remanded the matter to the FTC for further consideration.

In a statement, Tom Lavelle, senior vice-president and general counsel at Rambus, said the company was "very pleased" with the decision.

Last month, a San Francisco jury also found that Rambus had not breached antitrust law in a case brought by Hynix Semiconductor, Micron Technology and Nanya Technology. That case dealt with similar claims that the company had deceived JEDEC by failing to disclose its patenting activities.