Jury rules against Rambus in antitrust case

Micron and Hynix did not conspire to suppress Rambus' RDRAM product, the jury says

A San Francisco jury has rejected a $4 billion antitrust claim by Rambus against rival RAM makers Hynix Semiconductor and Micron Technology, a California court announced Wednesday.

A jury for the Superior Court of California rejected Rambus' claim that Hynix and Micron conspired with each other and other companies to fix the prices of RDRAM and keep DDR prices low in order to prevent Rambus-developed RDRAM from becoming the RAM standard, according to court documents. The jury also rejected Rambus' claims that Hynix and Micron conspired to disrupt a relationship between Rambus and Intel.

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Rambus filed the lawsuit in May 2004. The RDRAM maker alleged that Hynix and Micron conspired to keep RDRAM prices "unnaturally" high, while keeping DDR prices low, Rambus said in a statement. "Upon succeeding in eliminating RDRAM as a competitor in the main memory market, the defendants raised the prices of DDR by as much as 500 percent," Rambus said.

Rambus is disappointed with the verdict, President and CEO Harold Hughes said in a statement. "We do not agree with several rulings that affected how this case was presented to the jury and we are reviewing our options for appeal," he said.

Hynix is grateful for the jury’s verdict today, company CEO O.C. Kwon said in a statement.

"[The jury] rejected Rambus’s meritless claim that Hynix was to blame for the failure of Rambus’s proprietary RDRAM technology to become the standard for computer main memory," Kwon said.

Rambus has also sued Micron and Hynix for patent infringement in recent years.

The U.S. Federal Trade Commission brought its own antitrust case against Rambus in 2006, accusing the company of failing to disclose its patents on DRAM-related technology while working with the standards-setting organization the JEDEC (Joint Electron Device Engineering Council) to create royalty-free or low-royalty standards. The FTC lost the case before the U.S. Supreme Court in 2009 and later dropped it.

With the billions of dollars in claims at stake, Rambus may appeal the case, said Mike Howard, senior principal analyst of DRAM & Memory at IHS iSuppli.

"I think this was a serious blow to their hopes of winning a significant settlement via further litigation," Howard said. "The verdict clearly removes some serious clouds over Hynix and Micron."

Many memory makers are hoping the ruling marks an end to an ugly chapter in the industry's recent history, Howard said. Rambus had damaged relationships with many memory makers with its litigation, but now companies can move on.

"The cessation of litigation may actually make it more feasible for Rambus to license more technology to memory companies -- suing potential customers can be bad business," Howard said.

The ruling won't have any direct impact on the current memory market, which now revolves around the DDR memory type, said Dean McCarron, principal analyst at Mercury Research. Rambus' business model has also changed and RDRAM is not being licensed as a memory interface or controller, like it was in the earlier part of the decade.

"Back then what was going on was Rambus and Intel had been heading in the direction of Rambus memory being the next-generation memory," McCarron said.

Intel in the early 2000s designed chipsets around RDRAM, which was considered expensive, McCarron said. However, DDR eventually emerged as the cheaper form of memory, and Rambus alleged that memory makers had colluded to lower memory prices to kick RDRAM out of mainstream memory competition. Intel eventually backed DDR.

Rambus is now licensing RDRAM as a design module for chips, and has a different set of customers, McCarron said.

ISuppli's Howard agreed that the ruling won't have an impact on the memory market, as memory standards are now pushed through JEDEC. JEDEC is currently developing memory standards for PCs and mobile devices.

"For DRAM manufacturers the process of defining the next technology standards via JEDEC is one they are now incredibly familiar and savvy [with]," Howard said.

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