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Rambus files antitrust lawsuit

Rambus files antitrust lawsuit

Rambus continued its legal onslaught against computer memory vendors Wednesday by filing an antitrust lawsuit against four companies, accusing them of banding together to eliminate competition.

The suit was filed in the Superior Court for the State of California against Hynix Semiconductor, Infineon Technologies, Micron Technology and Siemens, and alleges that executives from those four memory vendors colluded to set cost parameters for Rambus' RDRAM (Rambus dynamic RAM) product and to restrict output of that product in order to raise its price and kill its chances of becoming a mainstream memory technology.

"What led to this development was the quantity and quality of the evidence. We couldn't ignore our fiduciary responsibility to our shareholders," said John Danforth, senior vice president and general counsel for Rambus, in an interview after the lawsuit was announced.

The allegations stem in part from e-mail and other documents made public during the U.S. Federal Trade Commission's (FTC's) trial against Rambus, in which an FTC judge threw out a complaint alleging that Rambus had improperly deceived a standards-setting organization into adopting its patented memory technology as part of the SDRAM (synchronous DRAM) standard.

Those e-mail messages detailed conversations between DRAM vendors expressing their displeasure over Intel Corp.'s decision to adopt RDRAM as the future memory technology for its products. The e-mail and additional documents cited in Rambus' complaint show that the DRAM vendors plotted to undermine Rambus and its products by collectively lowering production goals in order to create a supply glut and raise the price of RDRAM during the late 1990s, Danforth said.

Rambus' critics have said that the complexity of RDRAM chipsets and the high prices of the memory chips, as well as Intel's failure to deliver a working RDRAM chipset on time, helped seal RDRAM's fate and make SDRAM and DDR (double data rate) SDRAM the industry standards they are today.

"Rambus' allegations made against Infineon in this complaint are old news and without merit. The failure of RDRAM in the marketplace was the result of high costs and technical issues with Rambus' products as well as strong competition from superior DRAM products provided by Infineon and other DRAM manufacturers," said Christoph Liedtke, an Infineon spokesman, in a statement.

Representatives from Micron, Siemens, and Hynix were not immediately available for comment.

Rambus designed RDRAM as an alternative to conventional DRAM technology in the early 1990s. The company does not manufacture memory chips, but licenses its designs to companies such as the defendants in its antitrust case.

The antitrust lawsuit is the latest salvo in a legal saga that has stretched for years. Rambus claims that the SDRAM standard infringes on some of its patents, and has filed numerous lawsuits attempting to collect royalties from DRAM manufacturers that did not agree to license Rambus' technology. The holdout DRAM vendors claim that Rambus failed to inform a memory standards-setting committee that it held patents on certain technologies that were under consideration for the SDRAM standard, in violation of that committee's rules.

Rambus has prevailed in two legal challenges so far, winning an appeal of a fraud verdict stemming from a trial in Virginia, and a dismissal of the FTC's complaint against the company. Separate litigation related to the Virginia case is pending against Infineon, and the lawyers for the FTC have filed an appeal to the full Commission in that case.

If Rambus is allowed to collect royalties on its patents, the amount could reach US$3 billion, lawyers for the FTC said in their appeal.

A separate U.S. Department of Justice antitrust investigation against the DRAM vendors is also under way.


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