FTC Judge Backs Rambus in Patent-Related Antitrust Case

Rambus Inc., a designer of high-speed memory chips, won a ruling from a Federal Trade Commission judge Tuesday that may help it reap as much as $3 billion a year from semiconductor makers.

The agency’s chief administrative law judge rejected government allegations that Rambus violated antitrust laws by attending meetings to set industry standards for memory chips as it pursued patents for those chips. Judge Stephen McGuire said the FTC “failed to sustain its burden” of proving that Rambus committed fraud.

The ruling, which will be reviewed by FTC commissioners, bolsters efforts by Rambus to collect patent royalties from semiconductor makers, including German firm Infineon Technologies. McGuire issued a one-sentence order and will release a written opinion Monday.

Rambus shares rose 31 cents to close at $25.84 in Nasdaq trading Tuesday. After hours, the shares rose to $29 before trading was halted minutes before the judge’s order was released.

“This is a shot in the arm for Rambus,” said analyst Steve Allen of Sierra Tech Research. “This means that no matter which way the memory market goes, Rambus will end up on top.”

David Parker, a spokesman for Micron Technology Inc., which is fighting Rambus over its patents, said McGuire “failed to understand key points of fact and law” in the case. He said Micron was hopeful the commission would overrule the judge.

Los Altos, Calif.-based Rambus has maintained it did nothing wrong and revealed everything it was required to disclose.

About 90% of the 4 billion chips sold each year comply with industry standards, with a value of $13 billion to $25 billion, the FTC has said. Rambus, if allowed to collect royalties, could get as much as $3 billion a year.