Publications & News

Rambus Prevails in Long-Running Battle with the FTC

April 25, 2008

WilmerHale client, Rambus, Inc. prevailed on Tuesday, April 22nd when the U.S. Court of Appeals for the District of Columbia Circuit overturned a Federal Trade Commission (FTC) ruling that Rambus violated antitrust laws by failing to disclose its patent interests to a standard-setting organization.

Rambus’s long-running battle with the FTC began in 2002, when the FTC filed an administrative complaint alleging that Rambus had violated Section 2 of the Sherman Act by failing to disclose its patents, patent applications, and plans to file patent applications on technology used in computer memory to JEDEC, an organization that sets standards for the semiconductor industry. After one of the longest trials in the history of the FTC, an Administrative Law Judge (ALJ) found that Rambus had not violated Section 2. When the FTC later rejected the ALJ’s findings, Rambus appealed to the D.C. Circuit.

Just over two months after the argument, in a unanimous opinion authored by Judge Williams, the D.C. Circuit ruled that the FTC’s decision could not stand because it failed to establish that Rambus’s allegedly deceptive conduct harmed competition. The court stressed that the FTC found only that Rambus’s alleged conduct had allowed it not to make a RAND commitment and did not find that the conduct affected the content of any standard. The court therefore concluded that Rambus’s conduct did not violate the antitrust laws because “simply . . . obtain[ing] higher prices normally has no particular tendency to exclude rivals and thus to diminish competition.” The court also expressed “serious concerns” about what it called the FTC’s “aggressive interpretation of rather weak evidence” regarding whether Rambus had an obligation to disclose its patent interests.

A. Douglas Melamed, who argued the case, and Paul R.Q. Wolfson led the team of WilmerHale lawyers, which included Andrew J. Ewalt, former counsel Pratik Shah and Sam Sankar, and former associate Ken Bamberger. Munger, Tolles & Olson LLP was co-counsel.