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Tech Industry

Rambus wins major round in FTC case

A Federal Trade Commission judge dismisses the agency's suit that alleged the chip designer engaged in antitrust practices regarding SDRAM, the most common memory found in the market.

A Federal Trade Commission judge threw out on Tuesday the agency's antitrust case against Rambus, marking a major win for the memory chip designer.

On Wednesday morning, Rambus stock was up $8.06, or 31 percent, to $33.90.

An FTC administrative law judge dismissed the case, which centered on allegations that Rambus deceived the industry and a standards body by not disclosing its patent plans regarding synchronous dynamic random access memory while SDRAM-related standards talks were under way. Once standards had been adopted, Rambus filed intellectual-property suits against several major makers of SDRAM, the most common memory found on the market.

The JEDEC Solid State Technology Association, to which Rambus belongs, requires members to disclose or license relevant intellectual property to other members, but how the organization applied those bylaws has been a controversy in the case.

By ruling for Rambus, the FTC judge effectively said Rambus' alleged conduct didn't occur, or wasn't illegal. Although the judge tossed out the FTC case Tuesday, the details behind the decision will not be made available until Monday.

Rambus has maintained that competitors knew about its patents and product plans while SDRAM-related standards talks were going on at JEDEC.

"Technology companies either live or die by their innovation," said John Danforth, Rambus general counsel. "And this case was, in a way, about how we get compensated for some of our past innovation."

Rambus currently has patent infringement lawsuits against Infineon--scheduled for trial in May--and Hynix, scheduled for a November trial.

Although Rambus chalked up a major win, the FTC could seek another review of the case with the full FTC commission and also a review by the U.S. Court of Appeals.

"The FTC will have to file something to preserve its right to appeal," Danforth said. "But before anyone makes a decision on what to do next, you have to take a look at the filing on Monday. People will have to evaluate whether our case was thrown out on one technicality, or multiple points....(I have great) confidence in the underlying merits of this case."