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FTC grants partial stay of Rambus patent order

Regulators accede to the memory maker's request to put the order on hold, even as they concede "some harm to the public interest."

U.S. antitrust authorities on Monday agreed to postpone an order that would have required Rambus to lower royalty rates on key patents, but the computer technology company will have to place the extra money in escrow while it pursues an appeal.

On Feb. 5 the U.S. Federal Trade Commission imposed limits on the royalties Rambus can collect from some patents, having concluded that Rambus unlawfully monopolized markets for memory chip technologies.

The FTC granted part of Rambus' request to put the remedy order on hold. In extended trading, shares of Rambus rose to $20.88, up 5.3 percent from their $19.83 close in regular trading on Nasdaq.

"The decision to grant a limited stay of our final order is a difficult one," the FTC said in its latest decision. "Undoubtedly, it will entail some harm to the public interest by allowing Rambus to continue to collect monopoly (fees) during the pendancy of its appeal."

Rambus develops and licenses technology used by computer chipmakers. Major memory producers include No. 1 Samsung Electronics Co. Ltd. and Hynix Semiconductor, both of South Korea; Europe's Qimonda; Elpida Memory of Japan; and Micron Technology, the largest U.S. memory chipmaker.

In the February decision, the FTC ordered a maximum royalty rate of 0.25 percent for one type of memory technology products, known as SDRAM. It also ordered a rate of 0.5 percent for another, called DDR SDRAM; 0.5 percent for SDRAM memory controllers or other nonmemory chip components; and 1.0 percent for DDR SDRAM memory controllers or other nonmemory chip components.

The royalty restrictions do not apply to the latest versions of memory technology that Rambus collects royalties on, including one known as DDR2 that was adopted by the industry in 2003.

Under the stay granted on Monday, the agency said Rambus can continue collecting royalties beyond those limits. But the company will get to keep that money only if the FTC remedy is overturned on appeal.

Rambus has said it plans to appeal both the FTC liability and remedy orders.

In the order issued by the FTC on Monday, the agency also said its original order was not designed to limit Rambus from collecting royalties on the past use of its technologies or require it to refund past royalties.

Rambus is involved in several legal proceedings with major memory chipmakers, including Hynix and Micron.