Rambus wins on appeal. WASHINGTON, April 22 (Reuters) - A U.S appeals court has
overturned an order issued by the Federal Trade Commission
that had accused computer chip maker Rambus Inc (RMBS.O: Quote, Profile, Research) of
antitrust violations.
The FTC order accused Rambus of failing to tell a
standard-setting organization -- JEDEC, short for Joint
Electron Device Engineering Committee -- about its patented
technologies while advocating those technologies as the new
standard for computer chips.
The U.S. Court of Appeals for the District of Columbia
overturned an FTC order which had said the failure to disclose
the patents constituted a violation of antitrust law and had
ordered Rambus in February 2007 to stop collecting some patent
royalties.
The FTC amended that order in March 2007 to allow the
royalties to be collected but put into escrow.
Rambus develops and licenses technology used by computer
chip makers.
The court said that the FTC erred in acting on its
conclusion that Rambus failed to disclose the patents either to
gain a monopoly by having its technology set as the new
standard or to avoid having limits put on its royalties, as
frequently happens when technology is chosen as the new
standard.
"The latter -- deceit merely enabling a monopolist to
charge higher prices than it otherwise could have charged --
would not in itself constitute monopolization," the court said
in its ruling.
Bob Skitol, an antitrust attorney with the law firm Drinker
Biddle, took vehement exception with that portion of the ruling
and warned that it could damage the practice of setting
standards.
"The ruling that that is not exclusionary or
anti-competitive conduct is remarkable and quite incorrect," he
said. "I believe it clearly does constitute monopolization."
"This decision is part of a broader recent trend in the
appellate courts to narrow the scope of section 2 of the
Sherman Act," he said, referring to a measure that forbids
firms from using misconduct to dominate a market. "That is
unfortunate in some respects."
The ruling is one of a series of losses for the FTC, which
failed to get an injunction stopping a merger of Whole Foods
Market Inc (WFMI.O: Quote, Profile, Research) and Wild Oats last year.
Rambus also won a case in San Jose, California, last month
over Hynix Semiconductor Inc (000660.KS: Quote, Profile, Research) which had also alleged
that Rambus failed to disclose relevant patents during
standard-setting talks. Micron Technology Inc (MU.N: Quote, Profile, Research) has filed
similar lawsuits.
The appeals court said the FTC "failed to sustain its
allegation of monopolization," while in another portion of the
ruling it said that the commission took "an aggressive
interpretation of rather weak evidence."
Rambus did not immediately return a message seeking
comment. The FTC had no immediate comment.
Shares of Rambus were up 68 cents or 3 percent to $23.22 in
afternoon trading on Nasdaq.
(Editing by Gerald E. McCormick)
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