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Supreme Court denies Federal Trade Commission bid against Rambus

The justices reject regulators' efforts to impose antitrust penalties that would limit the chip maker's royalties.

February 24, 2009|Bloomberg News

The U.S. Supreme Court on Monday turned away the Federal Trade Commission's bid to impose antitrust penalties that would have limited the royalties collected by memory-chip technology firm Rambus Inc.

The justices, without comment, left intact a federal appeals court decision favoring Rambus, which gets more than 80% of its revenue from royalties. The lower court threw out FTC findings that Rambus undermined competition in the $20-billion market for dynamic random-access memory chips by scheming to get secretly patented technology included in industrywide standards.

The rebuff is a setback to four chip makers that stood to benefit from the FTC order -- Micron Technology Inc., Hynix Semiconductor Inc., Nanya Technology Corp. and Nvidia Corp. Those companies, all involved in litigation with Rambus, joined the agency in urging review. The high court rejection may mark the end to the FTC's seven-year pursuit of Rambus.

"After enduring years of lost business, uncertainty and spending millions of dollars defending ourselves against the FTC's ill-founded allegations, we're pleased the Supreme Court has put an end to these claims," Rambus general counsel Tom Lavelle said.

Shares of Los Altos, Calif.-based Rambus rose 39 cents, or 6.2%, to $6.70.

"This was not the decision we were hoping for, and we are now reviewing our options," said David Wales, acting director of the FTC's Bureau of Competition.

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