Rambus has faced similar accusations in the US where the Federal Trade Commission has set maximum royalty rates that the company can collect.
In a Statement of Objections, the European Commission issued a preliminarily conclusion that Rambus should charge a reasonable and non-discriminatory royalty rate. Rambus has nine weeks to reply to the SO, but if the preliminary views are confirmed, the EC will fine Rambus and order it to cease the abuse.
The EC noted that the FTC in the US had found that Rambus had engaged in illegal monopolization and imposed a remedy relating to import or export of relevant products into or from the US. But as Rambus is enforcing its patents against companies in Europe, these companies cannot seek relief on the basis of the US decision. The main companies affected are Hynix, Micron, Qimonda, and Samsung
This is the first case where the EC has uncovered a patent ambush. Rambus is accused of not disclosing the existence of patents, which it later claimed were relevant at the standard-setting Joint Electron Device Engineering Council.
The EC said Rambus breached the EC Treaty’s rules on abuse of a dominant market position by subsequently claiming unreasonable royalties for the use of those relevant patents. The Commission’s preliminary view is that without its patent ambush, Rambus would not have been able to charge the royalty rates it currently does, it said.
Rambus general counsel Thomas Lavelle said the issues raised by the European Commission include Rambus’s participation in JEDEC that ended over a decade ago. He said they were largely the same issues examined by a number of US courts and the FTC, and are currently before the US Court of Appeals. We are studying the Statement of Objections and plan to respond in due course, he said.
Rambus is a troubled company. It is currently delinquent in its filings with the SEC because of a restatement of its accounts after the discovery of stock-option difficulties. It estimates that this will lead to non-cash charges of $170m from 1997 through to 2005. As a consequence, it has been fighting Nasdaq moves to de-list its stock and the latest deadline for it to file accounts is October 10.
