FTC says Rambus monopolized chip markets

NEW YORK, Aug 2 (Reuters) The US Federal Trade Commission ruled today that computer technology developer Rambus Inc unlawfully monopolized markets for four memory chip technologies, sending its shares down 22 per cent.

The ruling puts at risk the royalties that Rambus, which has no manufacturing facilities of its own, earns from the licensing of its technology to other chipmakers.

Rambus ''through a course of deceptive conduct'' was able to distort industry standards for dynamic random access memory (DRAM) and ''engage in an anti-competitive 'hold-up' of the computer memory industry,'' the FTC said in a statement on its Web site.

The remedy being sought by FTC staff would bar Rambus from enforcing any existing licensing agreements, along with certain patents.

The FTC said it ordered more briefings to determine the appropriate remedy.

Rambus shares tumbled 3.76 dollar to 13.22 dollar in active morning trade on Nasdaq.

''We are disappointed that any form of liability was found on the records submitted to the FTC during and following our 2003 trial,'' John Danforth, senior legal adviser at Rambus, told analysts on a conference call. ''We believe it highly likely (that) we will be taking an appeal from the liability that has been found.'' Rambus, based in Los Altos, California, believes it can continue with its licensing activity and can proceed with existing litigation, including patent suits against Micron Technology and South Korea's Hynix Semiconductor.

The FTC had brought antitrust charges against Rambus in June 2002, and a trial took place in 2003.

In 2004, a US administrative law judge handed Rambus a victory by dismissing charges that it illegally monopolized key computer chip technologies. Later that year, the FTC staff asked the agency's five commissioners to overrule the judge's decision.

For years, Rambus has been seeking royalties from some of the world's largest memory-chip makers on intellectual property that it asserts is used in standard DRAM chips.

At issue is technology used for computer memory. In 1990 Rambus filed for a patent for a new memory technology called RDRAM. It subsequently became a member of an industry group called JEDEC that was trying to agree on standards for another memory technology, called SDRAM.

DRAM is used mainly in computers, unlike another kind of memory known as ''flash,'' which can retain data after power is shut off and is used in Apple Computer Inc's iPod and a wide range of other portable electronics.

The FTC had cited a half dozen instances in the mid-1990s in which they said Rambus had secretly applied to amend its RDRAM patent to cover technologies that JEDEC was considering for SDRAM.

They said Rambus executives had misled JEDEC officials when they asked if the company had patented key technologies. Rambus had maintained it never did anything to violate JEDEC's rules.

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