Rambus Defeats FTC

A reader provided the following press release issued today, April 22, 2008, by The Voluntary Trade Council, Inc.:

The Federal Trade Commission's long-running prosecution of Rambus Inc. [NASDAQ:RMBS] suffered a critical defeat today after a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit unanimously vacated the agency's 2007 decision against the company and ordered a new trial to address "serious concerns about the sufficiency of the evidence" in the case.

In a 24-page opinion authored by Senior Circuit Judge Stephen F. Williams, the D.C. Circuit said the FTC "failed to sustain its allegation of monopolization" based on Rambus' alleged deception before a computer memory standard-setting organization. The Court declined to extend Section 2 of the Sherman Antitrust Act to include "deceit merely enabling a monopolist to charge higher prices than it otherwise could have charged." Furthermore, the Court expressed doubt that the FTC had proved Rambus engaged in any deceptive conduct at all.

Skip Oliva, president of the Voluntary Trade Council, filed a brief with the D.C. Circuit supporting Rambus. He said today, "The D.C. Circuit made the right decision. The FTC attempted to expand its own power without any basis in existing antitrust doctrine--and without any credible evidence of wrongdoing by Rambus--and the court of appeals appropriately restrained the illegal actions of an unprincipled executive branch agency."

The D.C. Circuit's decision does not immediately end the Rambus litigation. The court's order merely returns the case to the FTC for possible retrial under the ground rule set by the court's opinion. The FTC could try to reinstate its original decision, however, through an appeal to the full D.C. Circuit or to the U.S. Supreme Court. The FTC could also decline to retry the case and dismiss its 2002 administrative complaint against the company.