FTC Staff Seeks Appeal on Rambus Case
March 05, 2004 1:37:00 PM ET
By Peter Kaplan
WASHINGTON (Reuters) - Staff lawyers at the U.S. Federal Trade Commission have asked the agency's five commissioners to overrule a judge who recently struck down antitrust charges against Rambus Inc. (RMBS).
In a March 1 notice of appeal, posted on the FTC's Web site on Friday, FTC lawyers said they would ask the five-member commission to reverse a Feb. 17 ruling by an administrative law judge and resuscitate charges that Rambus had illegally monopolized key computer chip technologies.
The commission itself voted to authorize the complaint against Rambus in June 2002. If the commission overturned the administrative judge's ruling, any subsequent appeals would be heard by a federal appeals court.
Administrative Judge Stephen McGuire rejected nearly every aspect of the government's case, and concluded it had failed to prove charges the chip development company illegally monopolized key computer chip technologies.
Rambus General Counsel John Danforth said the FTC staff's decision to appeal was no surprise but he expressed confidence the commissioners would uphold the judge's ruling, given the ``large number of independent bases for dismissing the complaint.''
But it's not unprecedented for the FTC to overturn decisions of its administrative judges.
Less than three months ago, the FTC voted against a ruling by another judge who had dismissed antitrust charges against Schering-Plough Corp. (SGP) and two other drug companies.
At issue in the Rambus case are computer memory patents with billions of dollars in royalties at stake.
Rambus has patent infringement cases pending against computer chip manufacturers Micron Technology Inc. (MU), South Korea's Hynix Semiconductor Inc. and Germany's Infineon .
Rambus shares edged down about 9 cents, or about a quarter of a percent, to $31.50 in trading on the Nasdaq stock market.
LEGAL STANDARD
Antitrust experts said the fact that the FTC commissioners voted to file the complaint in the first place will not give FTC staff any advantage in the appeal.
When the commissioners voted to file the complaint, antitrust experts said, they determined only that there was ``reason to believe'' Rambus had violated antitrust laws. In an appeal, the commissioners will have to decide whether the evidence proves that Rambus actually violated the law.
``They'll give it a fair review, and I don't think anyone including the staff thinks they have an inside track here,'' said Bill Baer, a partner with Arnold & Porter, who was formerly head of the FTC's competition bureau.
In 1990 Rambus filed for a patent for a new memory technology called RDRAM. But it subsequently became a member of an industry group called JEDEC, which was trying to agree on standards for another memory technology called SDRAM.
The FTC had cited a half dozen instances in the mid-1990s in which they said the company had secretly applied to amend its RDRAM patent to cover technologies that JEDEC was considering for SDRAM.
The FTC charged that Rambus executives had misled JEDEC officials when they asked if the company had patented key technologies.
But McGuire said the agency had failed to prove that Rambus deceived chip manufacturers, that it had improperly gained a monopoly, or that it had violated antitrust laws.
© 2004 Reuters |
