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EU Launched Investigation about Rambus Business Practices

By linathael. Original by Lionel - 27/08/2007 09:36:46 CEST - Category: Peripheral
Rambus is a well-known company for computer memories, mostly for launching numerous legal actions against memory manufacturers for patent infringements; usually leading to important financial compensations, than for bringing true "revolutionizing" products. The company is even rumored to invest more in lawyers than in R&D.
But it is time for a change, and Rambus is now the target of an anti-trust action launched by the European Union on abuse of a dominant position:
The European Commission can confirm that it has sent a Statement of Objections (SO) to Rambus on 30 July 2007. The SO outlines the Commission’s preliminary view that Rambus has infringed EC Treaty rules on abuse of a dominant position (Article 82) by claiming unreasonable royalties for the use of certain patents for “Dynamic Random Access Memory” chips (DRAMS) subsequent to a so-called "patent ambush".
DRAMs have been standardised by an industry-wide US based standard setting organisation – JEDEC. Rambus owns and is asserting patents which it claims cover the technology included in these JEDEC standards. Therefore, every manufacturer wishing to produce synchronous DRAM chips or chipsets consequently must either acquire a licence from Rambus or litigate its asserted patent rights.
The SO outlines the Commission’s preliminary view that Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents which it later claimed were relevant to the adopted standard. This type of behaviour is known as a "patent ambush". Against this background, the Commission provisionally considers that Rambus breached the EC Treaty's rules on abuse of a dominant market position (Article 82) by subsequently claiming unreasonable royalties for the use of those relevant patents. The Commission's preliminary view is that without its "patent ambush", Rambus would not have been able to charge the royalty rates it currently does.
This is the first time that the Commission is dealing with a "patent ambush" under EC antitrust law, but the approach reflects well-established general case-law under Article 82 of the Treaty.
In parallel proceedings in the US, the Federal Trade Commission (FTC) issued an order in August 2006 and in February 2007 whereby it found that Rambus had engaged in illegal monopolisation and imposed a remedy applicable to US patents and foreign patents to the extent that they relate to import or export of relevant products into or from the US.
When considering how serious the EU was and is following the previous Microsoft anti-trust action, Rambus should be prepared for some major problems in Europe as it seems the EU decided to openly fight against such "patent ambush" practice, and not only for consumer electronic market.
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