FTC charges Rambus with anticompetitive acts

Memory maker Rambus Inc. deceived a technology standards organization, resulting in harm to competition and competitors, according to a claim brought against the company by the U.S. Federal Trade Commission (FTC) on Wednesday.

The FTC’s complaint claims that from 1992 to 1995, Rambus took part in standards-setting activity regarding SDRAM (synchronous dynamic RAM) technology with the Joint Electron Device Engineering Council Solid State Technology Association (JEDEC), but failed to disclose that it had also filed for patents to cover technologies involved in the standard. Concealing such facts is a violation of JEDEC’s rules, the FTC said in a release.

Rambus’ conduct has put the company in a position to harm competition, since it could claim patent rights over the JEDEC SDRAM standard and collect royalties from manufacturers that used the standard in its product, the release said. In fact, the company has collected royalties from memory manufacturers including Toshiba Corp., Samsung Electronics Co. Ltd., and NEC Corp. that range from US$50 million to $100 million a year, the FTC said.

Rambus’ anticompetitive actions have also harmed consumers by raising costs for SDRAM technology or by reducing the output of such technology, the FTC said.

“By issuing this complaint, the commission is sending a signal not only to Rambus but also to other companies. 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 Simons, director of the FTC’s bureau of competition, in a written statement.

Rambus believes it fully complied with JEDEC’s rules, according to a statement it issued Wednesday. The company filed a patent application for its memory technology in 1990, and was later invited by JEDEC to join its committee developing a related standard, the statement said.

Numerous private lawsuits have been filed against Rambus with similar allegations, according to the company. One case, involving Infineon Technologies AG, was heard by the U.S. Court of Appeals for the Federal Circuit in early June.

“Given that the United States Court of Appeals for the Federal Circuit is currently scrutinizing this matter, we are somewhat surprised to see this complaint by the FTC,” said John Danforth, senior vice president and general counsel for Rambus in Los Altos, California.

Relief that the FTC could seek includes preventing Rambus from enforcing its SDRAM patents against manufacturers, the agency said.