Rambus Inc. v. FTC

The Joint Electron Device Engineering Council (JEDEC) was a trade organization involved in developing standardized computer-memory technology. During the standardization process, companies often competed to have their patented inventions incorporated into the standard. In 1993, JEDEC voted to adopt the SDRAM standard for computer-memory products, and in 1998, JEDEC voted to adopt an improved version called the DDR SDRAM standard. The completed DDR SDRAM standard incorporated four inventions patented by Rambus Inc. (Rambus) (defendant). Rambus had been an active member of JEDEC since 1992, but voluntarily withdrew membership in 1996. Beginning in 1999, with four of Rambus’s patented inventions now standardized by JEDEC, Rambus asserted its patent rights through licensing negotiations and litigation. In 2002, the Federal Trade Commission (FTC) (plaintiff) filed a complaint against Rambus, alleging that Rambus’s failure to disclose its interest in the four patented technologies during the standardization process was an unfair and deceptive method of competition in violation of § 5(b) of the FTC Act, 15 U.S.C. § 45(b), and constituted monopolization under § 2 of the Sherman Act, 15 U.S.C. § 2. The FTC found that Rambus’s omissions during the standardization process enabled Rambus to extract higher licensing fees than would have otherwise been possible, and entered an order compelling Rambus to adopt reasonable royalty rates. Rambus appealed the decision to the United States Court of Appeals for the District of Columbia.