Lawyers for the U.S. Federal Trade Commission (FTC) have filed a brief arguing that memory chip technology licensor Rambus Inc. be barred from enforcing its pre-1996 patents on Jedec-compliant products.

The brief was filed in the wake of an FTC ruling last month that found Rambus unlawfully monopolized the markets for technologies incorporated into DRAM chips. Specifically, the FTC ruled that Rambus engaged in anti-competitive behavior, participating in the Joint Electronic Device Engineering Council (Jedec) while simultaneously developing and patenting technology that would ultimately be incorporated into Jedec standards.

Enjoining Rambus from collecting royalties on pre-1996 patents related to Jedec-compliant products would restore the competitive conditions that would have prevailed had Rambus not engaged in unlawful behavior, argues the FTC brief.

"This remedy is not punitive: it would permit Rambus not only to enforce all its patents against any non-Jedec-compliant products and its post-1996 patents against all products (including Jedec-compliant products), but also keep the unlawfully acquired monopoly profits it collected during the past six years," the brief states.

According to the brief, the FTC's August decision establishes that, had Rambus not deceived Jedec members, they would have selected alternative technologies for the SDRAM and DDR SDRAM standards rather than pay Rambus royalties.

Without this deception, the brief argued, Rambus would have been paid negligible, if any, royalties on the relevant patents.

"The remedy question rests on a fundamental conundrum: the appropriate remedy depends on what completive conditions would have existed absent Rambus' unlawful conduct," the brief contends. "Yet Rambus' unlawful conduct prevents us from knowing what competitive conditions would have existed."

The brief also purposes an alternative remedy, suggesting a maximum royalty rate of 0.25 percent for SDRAM, DDR SDRAM and DDR2 SDRAMs. But it makes clear that this remedy is a second choice, calling it inferior to enjoining Rambus from enforcing the patents.

In its own brief filed with the FTC Sept. 15, Rambus (Los Altos, Calif.) argued that the FTC has no authority to set maximum royalty rates in the technology markets relevant to the August ruling. Rambus said it does not believe that the record in this case justifies a remedy that would alter market conditions.

If the FTC does choose to restrict royalty rates, Rambus argues, it should do so only in the markets that Rambus was found to have unlawfully monopolized—decribed by the FTC as the markets for latency, burst length, data acceleration and clock synchronization technology used in Jedec-compliant SDRAM and DDR SDRAM devices. Rambus argues that it should be allowed to charge more than 2.5 percent royalties in both SDRAM and DDR SDRAM.

Both sides are scheduled to submit reply briefs on Sept. 29, according to a Rambus spokesperson.

Rambus said though a statement last month that if the FTC tried to set royalty rates, Rambus could demonstrate that its rates have been reasonable and fair.

Notably, the FTC brief does not recommend that Rambus be required to pay damages. There had been speculation that the company could not only be enjoined from enforcing the patents, but forced to pay back at least some of the revenue it generated from the patents over the years.

Briefs have been filed in the matter by other concerned parties—including the major DRAM makers that Rambus is alleged to have deceived.

By: DocMemory
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