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Fri, Oct 10, 2003 - Page 12 News List

Rambus squares off with US regulator

DECEPTIVE CONDUCT?The federal Trade Commission has accused the computer memory-chip designer of failing to fully divulge the details of its patent holdings

BLOOMBERG

Rambus Inc engaged in a "pattern of deceptive conduct" against the semiconductor industry to collect billions of dollars a year from computer makers, a US government lawyer said at an antitrust trial. Rambus said it complied with the rules that were set by the industry.

The two sides squared off today before an administrative law judge in Washington for closing arguments in the government's case against the chip designer.

Rambus attended meetings to set standards for chips while pursuing patents to earn royalties on them, said Sean Royall, the US Federal Trade Commission's deputy director of competition.

About 90 percent of the 4 billion chips sold each year comply with those standards, with a value of between US$13 billion and US$25 billion, Royall said.

If allowed to pursue its efforts to collect money on its patents from the chipmaking industry, Rambus could get as much as US$3 billion a year, he said. Consumers would end up paying higher prices as a result, he said.

"The magnitude of the competitive impact because of Rambus' conduct is staggering," Royall said. Rambus "threatens the very institution of collaborating on industry standards."

Los Altos, California-based Rambus maintains it did nothing wrong and revealed everything it was required to disclose. It also said an appeals court cleared it of any wrongdoing.

Rambus lawyer Steven Perry said a Rambus official twice refused to answer questions by industry council members when asked whether the company had any inventions related to the chip technology. That "raised flags" with other members of the group, Perry said, quoting from minutes of early meetings.

"We never lied to them, we never lulled them" into thinking Rambus wasn't pursuing patents, Perry said.

Gregory Stone, another Rambus lawyer, said the policy that participants at the meetings disclose their patents was voluntary.

It was "encouraged but not required" and other companies didn't disclose any of their patents applications, Stone said.

He said the committee wasn't seeking standards that involved no patents. Stone said the panel wanted any patents to be "available to all on reasonable and non-discriminatory terms."

International Business Machines Corp was among the companies that declared it wouldn't reveal its technology.

Royall said Rambus is pointing the finger at other companies to hide its actions, and pointed out that no Rambus executives were called as witnesses by the company.

"Their testimony might have done more harm than help," he said. Rambus is "either not able or not willing to defend its conduct on the merits."

Rambus, which licenses its technology to chipmakers such as Intel and Samsung Electronics Co, sued Infineon, Micron and Hynix Semiconductor Inc after they refused to sign licensing agreements.

Rambus doesn't make or sell its own chips. Instead, it collects patent royalties from semiconductor makers such as Intel that use its designs.

The company specializes in chips designed to speed up computer programs for databases, games and digital photography.

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