European Comission Accuses Rambus of 'Patent Ambush'

Six months after U.S. regulators capped royalties that vendors must pay to Rambus Inc., the European Union (EU) is taking a close look at the company's monopoly on the DRAM (dynamic RAM) chip market.

On July 30, the European Commission (EC) issued a preliminary "Statement of Objections" finding that the Los Altos, Calif., company violated EU competition law by not disclosing that it owned relevant patents during the development of the DRAM standard. DRAM chips provide the memory in computers.

The existence of this Statement of Objections was disclosed Thursday in a Commission press release.

"Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents which it later claimed were relevant to the adopted standard," the statement said. "This type of behavior is known as a 'patent ambush.'" Against this background, the Commission provisionally considers that Rambus breached the EC Treaty's rules on abuse of a dominant market position."

"Without its 'patent ambush,' Rambus would not have been able to charge the royalty rates it currently does," the statement said.

Rambus now has nine weeks to respond before the Commission will decide whether or not the company is in violation of European law.

Earlier this year, the U.S. Federal Trade Commission ordered Rambus to license its DRAM technology to other vendors and put a cap on the royalties it can charge. Rambus's patent claims have also been the subject of numerous lawsuits between Rambus and chip makers who reject the company's patent claims.

"These are largely the same issues examined by a number of US courts, the Federal Trade Commission, and currently before the US Court of Appeals for the District of Columbia Circuit," said Thomas Lavelle, Rambus's senior vice president and general counsel, in a statement. "We are studying the Statement of Objections and plan to respond in due course."

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