Intellectual Property Law

The battle between computer memory developer Rambus and the Federal Trade Commission over Rambus' participation in the setting of standards for dynamic random access memory ("DRAM") technology took a sudden turn this week when a unanimous panel of the FTC reversed a decision rendered two years ago by an administrative law judge that Rambus did not unlawfully monopolize the market for DRAM. In its lengthy ruling, the FTC concluded that Rambus had intentionally deceived the governing standard-setting body and engaged in monopolistic practices by actively participating in the adoption of a standard that was covered by Rambus' patents. The FTC will next address the remedies to be assessed against Rambus.

The seeds of the dispute were planted in the mid 1990's in connection with the work of the Joint Electron Device Engineering Council ("JEDEC"), a standard-setting organization made up of manufacturers of various electronic devices, such as DRAM. A principal purpose of JEDEC was to develop standards that would permit electronic components developed by different manufacturers to work together.

According to the FTC, Rambus participated in JEDEC activities for several years and did not disclose to the other members that it had issued patents or patent applications that related to technologies being evaluated as possible industry standards. The FTC further contends that when some of the standards adopted were in fact covered by Rambus' undisclosed patents, Rambus was able to "lock in" the market. Rambus argued that other JEDEC members knew about its patents and that it had done nothing wrong. In the first round of litigation, the administrative law judge agreed with Rambus. However, on appeal the FTC disagreed, and its opinion is laced with scathing language indicating strong disapproval of Rambus' conduct.

Standard-setting organizations play an important role in the advancement of technology. Will the FTC's decision change the way these bodies operate? Should the system be changed? Weigh in.

Today's Blogger: Bob Sloss