FTC Files Complaint Against Rambus

The move comes less than a year after the FTC began an inquiry into the actions of Rambus, Los Altos, Calif., on allegations that parallel lawsuits filed by other companies including Infineon, Hynix and Micron.

The FTC charges that Rambus representatives took part in discussions conducted by the JEDEC Solid State Technology Association over standards for SDRAM technology while moving to hold and obtain patent rights related to that technology.

In a statement, the FTC said Rambus' actions were conducted "deliberately."

"The conduct at issue here has done substantial harm to important technology markets and threatens to undermine participation in industry standard-setting activities more generally," said Joseph Simons, Director of the FTC Bureau of Competition, in a statement.

"By issuing this complaint, the Commission is sending a signal not only to Rambus but also to other companies," he said. "The message is this: If you are going to take part in a standards process, be mindful to abide by the ground rules and to participate in good faith."

For its part, Rambus has long denied that it did anything improper and has maintained it owns the patent rights to SDRAM technology, for which it is paid license fees and royalties by SDRAM manufacturers.

"The FTC's complaint stems from the same facts and the same core allegations as are currently being litigated in multiple private lawsuits, including the Infineon case, tried last year in Virginia, for which an appeal was heard before the United States Court of Appeals for the Federal Circuit on June 3, 2002. Two United States District Courts--those hearing the Micron and Hynix cases--have delayed their cases pending resolution of the Infineon appeals," Rambus said in a statement.

In the statement, Rambus Senior Vice President John Danforth said the company itself was surprised at the FTC's actions, given that federal court appeals on the issues are still pending.

"These cases all derive from the same facts," Danforth said. "They all involve the same core issue of whether Rambus complied with JEDEC rules, which may or may not have shifted over time, and appropriately disclosed its patent interests in the 1992-1995 time frame.

"Given that the United States Court of Appeals for the Federal Circuit is currently scrutinizing this matter, we are somewhat surprised to see this complaint by the FTC," Danforth said.

News of the FTC complaint hammered Rambus stock. Shares of Rambus were down almost 28 percent on the Nasdaq, to $4.65 per share, on news of the action.