The Federal Trade Commission Splits On Whether It Could/Should Order Mandatory Licensing With Zero Royalties
On July 31, 2006, a unanimous Federal Trade Commission (“Commission” or “FTC”) ruled that Rambus Inc.’s “acts of deception constituted exclusionary conduct under Section 2 of the Sherman Act, and that Rambus unlawfully monopolized the markets for four technologies” that were incorporated into the Dynamic Random Access Memory (“DRAM”) standards adopted by the Joint Electron Device Engineering Counsel (“JEDEC”) for the Synchronous DRAM (“SDRAM”) and the Double Data Rate SDRAM (“DDR-SDRAM”) in violation of Section 5 of the Federal Trade Commission Act (“FTC Act”). Liability Op. at 3.[1] In its Liability Opinion, the Commission found, “Through a course of deceptive conduct, Rambus exploited its participation in JEDEC [an industry-wide standard-setting organization] to obtain patents that would cover technologies incorporated into now-ubiquitous JEDEC memory standards, without revealing its patent position to other JEDEC members. As a result, Rambus was able to distort the standard-setting process and engage in anticompetitive ‘hold up’ of the computer memory industry.” Id. at 3.
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[1] “Liability Opinion” and “Liability Op.” refer to the Commission’s July 31, 2006 opinion. For a copy of the Commission’s Liability Opinion, please refer to In the Matter of Rambus, Inc., FTC Docket No. 9302, available at http://www.ftc.gov/os/adjpro/d9302/index.htm (filed on August 2, 2006).
