Rambus Patent Related Antitrust Saga Appears to Be Over

European Union regulators on Wednesday dropped an antitrust investigation into Rambus Inc. after the company agreed to cap royalty fees for memory chip patents. In an agreement reached between EU regulators and Rambus, Rambus will not charge any royalties for SDR and DDR chip standards and to bring fees for newer versions of DDR down from 3.5 percent to 1.5 percent for five years. This settlement comes in an antitrust investigation launched by the European Commission in 2007 charging Rambus with monopolistic abuse relating to the allegedly unreasonable royalties for patents that were alleged to have been fraudulently hidden and ultimately set as industry standards. This should once and for all close the matter of whether Rambus engaged in anticompetitive conduct by participating in industry standard setting. Over the years I have been critical of Rambus, but as the whole story has unfolded I cannot help but notice that something just doesn’t add up. Either Rambus was engaged in one of the most epic patent frauds of all time, or certain government regulators on both sides of the Atlantic had it out for Rambus. I usually don’t give much credence to conspiracy theories, but in the wake of the fabrication of global warming data over decades it seems clear anything can happen and it doesn’t take more than a few rotten apples to perpetrate a fraud. That being the case, I have a suspicion that Rambus was the victim, not the perpetrator.

Those following the Rambus saga will recall that in June 20002, the United States Federal Trade Commission (FTC) filed charges against Rambus alleging that the memory chip designer deceived the industry by not disclosing certain information to a standard setting body. In fact, the FTC charged Rambus with violating United States federal antitrust laws by deliberately engaging in a pattern of anti-competitive acts to deceive the Joint Electron Device Engineering Council (JEDEC), an industry-wide standard-setting organization, which purportedly caused substantial harm to competition and consumers. According to the originally filed FTC complaint, Rambus nonetheless participated in JEDEC’s DRAM standard-setting activities for more than four years without disclosing to JEDEC or its members that it was actively working to develop, and possessed, a patent and several pending patent applications that involved specific technologies ultimately adopted in the standards.

Originally, these charges were litigated in an administrative trial before the FTC. In February of 2004, the charges were dismissed in an initial decision and order by Chief Administrative Law Judge Stephen J. McGuire. The FTC, however, appealed the decision and eventually won a reversal on July 31, 2006. In this opinion the Commission ruled that Rambus engaged in act of deception that constituted exclusionary conduct under Section 2 of the Sherman Antitrust Act, and that Rambus unlawfully monopolized the markets for four technologies that were incorporated into JEDEC standards in violation of Section 5 of the Federal Trade Commission Act. The Commission further found a sufficient causal link between the exclusionary conduct and JEDEC’s adoption of the SDRAM and DDR-SDRAM standards, but did not find that such conduct tainted the subsequent DDR2-SDRAM standard.

On Monday, February 5, 2007, the FTC issued its final opinion and order in the legal proceeding against Rambus. In the order the FTC, in addition to barring Rambus from making misrepresentations or omissions to standard-setting organizations in the future, ordered Rambus to license its SDRAM and DDR SDRAM technology and set maximum allowable royalty rates it can collect for the licensing. The maximum royalty rate set by the FTC for DDR SDRAM is .5%, which will be effective for three years from the date the Commission’s Order, and will thereafter go to zero. The FTC also determined that the appropriate maximum royalty rate for SDRAM is .25%. In justifying this different royalty rate the FTC explained these rates reflect the fact that SDRAM utilizes only two of the relevant Rambus technologies, whereas DDR SDRAM uses four.

The February 2007 FTC order further barred Rambus from collecting or attempting to collect more than the maximum allowable royalty rates from companies that may already have incorporated its DRAM technology, and required Rambus to employ a Commission-approved compliance officer to ensure that Rambus’s patents and patent applications are disclosed to industry standard-setting bodies in which it participates.

The ink was hardly dry on the 2007 FTC order when, Tom Lavelle, senior vice president and general counsel for Rambus, was already vowing a Rambus appeal would soon follow, which it did. On April 22, 2008, the Court of Appeals for the District of Columbia handed Rambus a victory. In a unanimous decision the DC Circuit determined the FTC failed to demonstrate that Rambus inflicted any harm on competition. In its order, the Court stated “we hold, therefore, that the Commission failed to demonstrate that Rambus’ conduct was exclusionary and thus to establish its claim that Rambus unlawfully monopolized the relevant markets.” The DC Circuit also expressed “serious concerns about the strength of the evidence relied on to support some of the Commission’s crucial findings.”

The DC Circuit acknowledged that those who participated in the standard setting testified that there was an obligation to disclose information about patents and patent applications, but there was no formal finding by the FTC that the relevant policies actually contained such a requirement. In fact, the DC Circuit was disturbed by the fact that the FTC relied on witness testimony from those who had an interest in the outcome of the litigation. So the clear message was the DC Circuit was not OK with what Rambus was alleged to have done, but found no hard evidence that suggested what they did violated the rules set for participation in standard setting. In short, the DC Circuit ruled that the FTC had no proof that Rambus engaged in any activities that were unlawful, illegal or contrary to the requirements set for participation in standard setting.

On Monday, November 24, 2008, the Federal Trade Commission filed a petition for certiorari with the United States Supreme Court seeking review of the decision of the DC Circuit. On February 23, 2009, the United States Supreme Court denied the request by the FTC to review the Rambus case, bringing to a close its Sherman Act antitrust claims against Rambus. At the time the Supreme Court decided not to accept the FTC appeal Lavelle explained: “Eleven DC Circuit judges examined the FTC’s case, and not one supported it in any way. The Solicitor General did not support the FTC’s petition for certiorari, and now the Supreme Court has denied its petition.”

Well, now the EU has stood down as well. I don’t think anyone can read anything into Rambus’ decision to acquiesce to the demands of the EU. It seems like the reasonable thing to do, particularly given seven years of turmoil. Rambus technology will no doubt advance, and the reality is that government investigations over a prolonged period just get in the way of doing business and succeeding, just ask Microsoft and IBM. Still, this winding down seems anticlimactic, and at least a little bit suspicious if you ask me. Like I have always said, either Rambus is innocent and a victim, or they are evil to the core. The fact that Rambus has not been taken out behind the woodshed and shot makes me think the conspiracy theorists were right all along, which makes me wonder why was Rambus drug through the mud for so long? Perhaps that will never definitively be known, but the saga seems to have come to an end without any evidence that Rambus did anything wrong.


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Join the Discussion

19 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    January 14, 2010 08:45 pm


    You are 100% correct. Shredding documents is not illegal. The trouble comes in when you anticipate litigation and then you start shredding, which is what at least one court said was the case with Rambus. There is another court that disagreed, and the final chapter on the Rambus document shredding matter has yet to be written in all likelihood.

    Every company needs a document retention policy that is strictly followed in all cases. If it is uniformly applied and implemented prior to disputes arising there is few, if any, problems.

    While I agree with the thrust of what you say, I disagree that implementation of a document retention policy is what happened with Rambus. There is ample evidence to suggest that Rambus had multiple shredding days that were not a part of a detached, greater document retention policy and in fact happened only after consulting litigation counsel. Time will tell, but if that is what happened then it was clearly inappropriate. Rambus has already been sanctioned in court as a result of it, and the shredding lead to many believing Rambus had something to hide.

    A word to the wise… all companies need to have and need to follow a document retention policy, and it must be in place before you really have something you want to shred.


  • [Avatar for Duane Winocaroad]
    Duane Winocaroad
    January 14, 2010 08:13 pm


    Although shredding of documents sounds bad, it is not illegal per se. And in fact there is a thriving business in Silicon Valley for just this purpose. If you google ‘shredding companies in san jose ca’ you get a long list of companies that do just that. Below is a link as a result of this google.


    The first company in this list, Bay Shred, claims 3000 happy Bay Area customers. If destruction of documents is illegal, there are a lot of companies in the Bay Area at risk. That doesn’t make sense to me. Is the appearance of wrong doing enough or is a clear court ruling still required. Bay Shred is only one of countless companies in this business. Rambus used one of these companies.

    I think it is likely that all the companies in litigation with Rambus have used the services of similar companies to do the same thing Rambus did. The name for this process is ‘Document Retention Policy’ and most, if not all technical companies, and others have such a policy. Part of the policy is selecting what documents to keep, and how long, and what documents to destroy. This policy is usually set up with the consultation and participation of Counsel. That is what Rambus did.

    Much like the FTC, the process to exonerate Rambus is on going at CAFC and I am confident they will prevail again. You should look into it.

    Thanks for keeping an open mind.

  • [Avatar for Gene Quinn]
    Gene Quinn
    January 14, 2010 10:22 am

    C Ross says: “looks suspiciously like a decision to let politics and influence-peddling trump justice.”

    That certainly seems to be true.

    I think if Rambus had not engaged in shredding of documents this would have been obvious far sooner. When one shreds documents the message sent is that there is something to hide and when litigation is in the air this violates rules of acceptable conduct. That clouded so much and made it easy for me and others to believe the charges against Rambus.


  • [Avatar for Gene Quinn]
    Gene Quinn
    January 14, 2010 10:18 am


    Where is your outrage that Rambus destroyed documents in at least 3 rounds of all day shredding? Whether you choose to recognize it or not, most of the problems faced by Rambus were either brought on or made worse by incompetent Rambus leadership. Of course, this doesn’t change the fact that they seem to have been railroaded. What it does do, however, is demonstrate that Rambus is far from Snow White. Had the leadership not engaged in provable and demonstrable fraud perhaps the company and Rambus shareholders would have been spared and the industry would have much sooner seen they were being railroaded on the standard setting front.

    Place the blame where it belongs. Trying to make me and others a scapegoat for having the audacity to point out the truth is very unbecoming and childish.


  • [Avatar for dan wilton]
    dan wilton
    January 14, 2010 08:05 am

    Prescient you are NOT. For a so called IP practitioner to confess to just now suspecting, that the decade long travesty of justice against Rambus might have some connection to reality is just more of the same ol, same ol from you. Weak soup that lacks compassion and conviction

    Where is the outrage, the personal offense that should accompany the fact that you now realize that you were hoodwinked while laymen all around you were able to divine the obvious truth while an innocent company was drawn and quartered in the public square.

    Still, better late than never I suppose. Good luck at last.

  • [Avatar for C Ross]
    C Ross
    January 14, 2010 01:47 am

    Nice summary of a complex story, though much had to be left out. It was a real eye opener to watch all this happen over a period of years. The FTC overruled its own Administrative Law Judge, which, given the later events summarized above, looks suspiciously like a decision to let politics and influence-peddling trump justice.

  • [Avatar for jets88]
    December 26, 2009 03:44 pm

    I think it might be interesting to see some of the connections the MM’s have with the FTC. Instead of writing it out myself I’ll include a link to some of what’s been discovered so far. http://www.freerepublic.com/focus/f-news/1623677/posts

    Also here’s another link including a summation of some of the publicaly available evidence (besides what’s generaly known) Rambus might use in their upcoming price fixing case. http://www.investorvillage.com/iv2/smbd.asp?mb=3666&mn=340205&pt=msg&mid=6678338

  • [Avatar for MikeT]
    December 10, 2009 02:40 pm

    Drag through the Mud for so long is because Rambus IP is in all computers and even TV sets. Not to forget to mention cell phones. No one wants to pay Rambus anything at all possible. They want to fight to the end of the days before they pay up. My guess is the end is pretty much near for all to start signing their licenses and pay back past royalties even at these much lower rates.

    Jedec actually trapped Rambus when they invite Rambus to join Jedec. This is how it turned out – Rambus spent over $300 million for lawyers.

  • [Avatar for EG]
    December 10, 2009 09:35 am

    An issue that’s certain to come up in this trial is application of the Noerr-Pennington doctrine. That might protect the defendants against collusion with the FTC, but not with each other.

  • [Avatar for Stan Tecza]
    Stan Tecza
    December 9, 2009 07:07 pm


    Your article is amazing. I have never read such positive comments about the BUS. I hope my father in heaven has a smile on his face. He bought me 700 shares 5 days before he suddenly died. This is the stock that killed him. As a retired NYPD and head of security for Met Life he drove one of the execs who informed him of this stock.. He invested the life savings and started to make money until ( well you know ). I have always held and bought over the years and even own the license plate RAMBUS 1 on my jeep. My dream is that I can buy some transfer some shares into my boys name when he arrives jan 27th 2010. I hope this sage ends this year before trial. Maybe just maybe it will finally pay off..

  • [Avatar for Robert Edward]
    Robert Edward
    December 9, 2009 07:03 pm

    Thank you for an honest appraisal of this conspiracy/saga which is soon to be either settled in favor of Rambus, or uncovered in all its gory details in Judge Kramer’s court in the pricefixing trial in California starting January 11th. It’s almost incredible to imagine the depth of collusion that existed within the cartel (Hynix,Samsung,Micron, and others). They were so terrified that Rambus and Intel would simply set the table (for future technology), and require the memory manufacturers to be foundries to produce the silverware, that they went to extraordinary lengths to “kill” Rambus, and steal their unique discoveries.

    They were, however, quite sloppy and arrogant in their email communications with one another. If the Price Fixing case goes to court as planned in January you will hear profound proof from mouths of the conspirators themselves, boasting of “Rambus killing” and attempts to litigate Rambus to death, driving them out of business. These crooks (the cartel) have already admitted their guilt in written confessions to the Department of Justice. The details of their treachery, however, have not yet seen the light of day.
    I urge you to tune in to the goings-on in Judge Kramer’s courtroom. You will hear of the most damning and despicable conspiracy in modern business circles (and that’s saying a great deal).

    Thank you for the integrity to follow the trail of truth through these many years.


  • [Avatar for Steve JMONTIM]
    Steve JMONTIM
    December 9, 2009 05:35 pm

    Kudos to you Gene, I take back any unkind thoughts I have ever thought or said about you. Perhaps there still are some honest journalists in the world, I’ll rank you among them.

    It is interesting to note that the EU news still trumpets the falsehood that DDR was developed while Rambus was a member of JEDEC. It was not, it was clearly developed AFTER Rambus left JEDEC, and in spite of the fact that member companies knew that Rambus felt they had claims on DDR. There was no submarine patent issue that suddenly “surprised” JEDEC members. They already knew from their memberships in Synclink and AMI, organizations that were trying to specifically design around Rambus’ patents. But the FTC commission decided that just because Company A knew in Synclink, it didn;t mean that Company A knew in JEDEC, even though it was the same representative.

    More in this saga will come to light when the antitrust trial starts in January. Rambus WAS the victim.

  • [Avatar for MTsugawa]
    December 9, 2009 04:38 pm


    Thanks for being open-minded enough to realize that you’re previous impression of Rambus may not have been the correct one. The memory manufacturer’s have done a very good job of discrediting Rambus in the media. You are not the only person to have been duped by their well-planned and orchestrated plan to destroy Rambus.

    You see, Rambus is a real threat to the memory manufacturers. If the RDRAM rollout with Intel had gone smoothly, Rambus and Intel would have gained control of the evolution of the memory market and the manufacturers themselves would have become foundries for Rambus’s designs.

    The memory manufacturers realized this outcome early on and devised a plan to prevent Rambus from succeeding. This plan included boycotting the Rambus technology, fixing the price of both Rambus and alternative, competing memory technologies, infringing Rambus’s technologies and incorporating them into their own designs under a different name and smearing Rambus and Rambus’s technology in the media. They also misrepresented their plans to adopt RDRAM to Intel and the world…thereby creating the severe shortage and, hence, price disparity between RDRAM and DDR.

    All this is documented in emails from the memory manufacturers themselves. It’s also documented in the findings from the original FTC trial in front of Judge Stephen J. McGuire. You can read it here: http://www.ftc.gov/os/adjpro/d9302/040217rambus.pdf.

    If you read one document on Rambus, read this one. It tells the whole sordid saga in a concise 334 pages. Judge McGuire got it right way back in early 2004. The FTC (and EU) are simply protectionists organizations out to protect the interests of the highest bidders…which in this case was the memory manufacturers. That’s why the overruled Judge McGuire’s original decision and persecuted Rambus.

    Thanks again for admitting that you may have been wrong and I encourage you to further educate yourself on this story. It’s a Pulitzer prize winning story for the right author.



  • [Avatar for Bob Waldman]
    Bob Waldman
    December 9, 2009 04:32 pm

    Great article. It probably won’t come up in the January trial, but there were very strong indications that the defendents (especially Micron) were closely associated with the FTC in their dogged pursuit of Rambus. There were actually briefs filed by the FTC that had Micron’s lawyer’s signature at the bottom (by mistake), which were quickly removed once the error was found. I think once you see what gets revealed at Judge Kramer’s trial you will be amazed at the scope and involvement of companies and federal organizations, depending of course on what is allowed in as evidence. The real question is, if the FTC is honest, why are they not now going after those that indeed appear to have conspired? I guess they won’t need to, since Rambus will do the job for them.

  • [Avatar for cgrex]
    December 9, 2009 04:21 pm

    Right on with…….”That being the case, I have a suspicion that Rambus was the victim, not the perpetrator.”

  • [Avatar for nostockpro]
    December 9, 2009 03:53 pm


  • [Avatar for Gene Quinn]
    Gene Quinn
    December 9, 2009 03:53 pm


    Thanks for the information. I will keep an eye on this, of course. What I was referring to was the government persecution of Rambus being over. That type of government investigation can dog a company and stall business and technology advances. Being a plaintiff in a lawsuit won’t be nearly as daunting, not even being a defendant would be as daunting as getting probed by the government.


  • [Avatar for John Navarro]
    John Navarro
    December 9, 2009 03:51 pm

    Thank you for illustrating in a very readable format the ongoing saga of the little IT company known as Rambus. I have to agree with your conclusion that in fact not only the FTC but the EU worked very hard to try and destroy Rambus, even to the point of utilizing support from the major memory manufacturers in their lrgal pursuit. There are many more facts available to the interested party but suffice to state that the major memory manufacturers plead guilty to anti trust activity with Micron copping a plea with the Justice Department and others paying stiff penalties and some going to prison. Now one of the last hurdles involves the upcoming anti-trust case against these very memory manufacturers in Judge Kramer’s court in San Francisco in early January 2010. This trial and the evidence that Judge Kramer has agreed to allow the jury to see and hear will or should convince you that indeed Rambus has been the victim of a very long and protracted witch hunt abetted by elements of our own Government that should protect the little guy not try and destroy him.

  • [Avatar for Barry Watzman]
    Barry Watzman
    December 9, 2009 03:38 pm

    OVER? Just wait till January (January 11th, to be specific) when Rambus goes into an Anti-trust trial against Samsung, Hynix and Micron as the PLAINTIFF. This trial is likely to be slam-dunk for Rambus, and the damages could be (in fact, are LIKELY to be) an 11-figure sum (more than TEN $$BILLION$$ dollars).

    Rambus was not the one committing anti-trust, it was the victim. And starting in January, it will be proven.

    This case was filed in 2004 and has taken this long to get to trial. It starts on January 11th, Judge Richard Kramer in California.