[Ecommerce] ZDNet: FTC sets limits on Rambus royalties

[Thiru Balasubramaniam]

http://news.zdnet.com/2102-9584_22-6156259.html

FTC sets limits on Rambus royalties

02 / 05 / 07   |
The Federal Trade Commission in a decision announced Monday
substantially limited the size of royalties that memory chipmaker
Rambus can charge for its DRAM technology.

The commission's order sets a maximum royalty rate of 0.25 percent for
SDRAM products; 0.5 percent for DDR (double data rate) SDRAM products,
as well as SDRAM memory controllers or other non-memory chip
components; and 1 percent for DDR SDRAM memory controllers, or other
non-memory chip components.

Rambus, which plans to appeal the order, charges a 3.5 percent royalty
on the manufacture of its DDR SDRAM, a figure that other memory
chipmakers have issued complaints about paying, given the slim profit
margins in the industry and the typical 1 percent royalty range
charged.

The commission's order calls for these maximum rates to remain in
effect for three years, after which time the maximum royalty rate will
fall to zero percent.

DDR 2 SDRAM and other post-DDR Joint Electron Device Engineering
Council (JEDEC) standards technology, however, are not subject to the
order.

JEDEC is a standards body for various technologies and had accused
Rambus of failing to disclose its plans to develop a version of
high-speed memory chips while it was a member of JEDEC in the 1990s.

"While we believe it appropriate that the commission did not reach DDR
2, GDDR 2 or succeeding generations, we are nevertheless disappointed
that the commission's remedy with respect to SDRAM and DDR SDRAM
continues to ignore the extensive findings of fact made by its own
chief administrative law judge (Stephen) McGuire," Tom Lavelle, Rambus
general counsel, said in a statement.

In 2002, the FTC charged Rambus with violating federal antitrust laws.
The agency alleged Rambus engaged in deceit when it failed to disclose
to JEDEC its patent plans for its high-speed memory chips.

But FTC administrative law judge McGuire threw out the FTC's complaint,
effectively finding the conduct was not illegal.

The FTC, however, appealed the ruling to the full commission, which in
turn ruled in favor of the FTC in August.

Rambus plans to seek a stay of the order, pending its appeal. Should
the courts reject Rambus' request for a stay, the FTC remedies are set
to take effect in 60 days.


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Thiru Balasubramaniam
Geneva Representative
CPTech
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@cptech.org