Rambus has offered commitments to the Commission in an attempt to end the Commission’s investigation into an alleged abuse of dominance in the form of a “patent ambush”. The US Federal Trade Commission (FTC) has, of course, already officially dropped its antitrust case against Rambus, because the US appeals court suggested that the FTC’s evidence against Rambus was weak.

Antitrust issues

On 30 July 2007, the Commission opened proceedings against Rambus for the possible abuse of a dominant position in the market for Dynamic Random Access Memory chips (DRAMs), primarily used to temporarily store data in products such as PCs.

The Joint Electron Devices Engineering Council (JEDEC), a US industry-wide standard setting organisation, developed an industry standard for DRAMs. JEDEC-compliant DRAMs represent around 95 per cent of the market and are used in virtually all PCs, and worldwide sales of DRAMs in 2008 exceeded $34 billion. Rambus claims its patents cover the technology of the JEDEC standard for DRAMs, and is asserting these patents against manufacturers of DRAMS complying with the JEDEC standard.

The Commission’s preliminary view was that Rambus had engaged in intentionally deceptive conduct in JEDEC’s standard-setting process, for example by not disclosing the existence of the patents and patent applications which it later claimed were relevant to the adopted standard. Rambus was therefore abusing its dominant position by claiming unreasonable royalties for the use of its patents against the JEDEC-compliant DRAM manufacturers.

Commitments offered by Rambus

On 12 June 2009, the Commission published a notice requesting industry feedback on commitments offered by Rambus. The deadline for comments from third parties on the proposed commitments was 12 July 2009 and the Commission is currently reflecting on these comments. If the Commission chooses to accept the commitments (which is highly likely), they will be legally binding on Rambus, putting an end to the investigation.

Under the proposal, Rambus will offer licenses with maximum royalty rates of 1.5 per cent for five-year worldwide licences for different DRAM memory types. Licensees who ship less than 10 per cent of their DRAM products in the form of older DRAMs will enjoy a royalty holiday for those older versions. In addition, Rambus will offer licenses on memory controllers with maximum royalty rates for five-year worldwide licences.

What next?

The Commission is expected to make a decision regarding the proposed commitments shortly.