Chip-Maker Rambus Wins Reversal in Antitrust Case

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We can’t say we know a heck of a lot about computer design, and we found antitrust to be an impossibly confusing law-school course. But today, those two topics came together in an important way that, we — O lucky Law Blog reader — are now going to attempt to explain.

The D.C. Circuit on Tuesday overruled a decision by the Federal Trade Commission that chip designer Rambus obtained an illegal monopoly in the 1990s when it secured patents for two types of chips used in personal computers. The court held that the FTC failed to prove its “allegation of monopolization” and ordered a new trial. Here’s the story, from the WSJ, and here’s the court’s 24-page opinion.

The FTC and chip makers have accused Rambus of fraud and violating antitrust laws in its dealing with an industry group that set technology standards for memory chips in the 1990s. They allege Rambus misled the group about the technologies it patented as the group made key decisions about industry standards.

The court expressed doubt that the FTC produced “substantial evidence that Rambus engaged in deceptive conduct at all,” Judge Stephen F. Williams wrote in the ruling.

The ruling marks another step toward a future when Rambus may be able to collect lucrative royalties on its technologies, which are now widely used by chip makers, by removing a key defense used by chip makers that have already been found in violation of Rambus’s patents.

But Rambus’s fights aren’t necessarily over. Tuesday’s court order returns the case to the FTC for possible retrial. “The commission is reviewing the ruling and considering its options,” a FTC spokeswoman told the WSJ.

WilmerHale’s Douglas Melamed argued the case for Rambus.