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Everyone's a monopoly these days!

The US Federal Trade Commission has just issued the following statement: "By a unanimous vote, the Federal Trade Commission has determined that computer technology developer Rambus, Inc. unlawfully monopolized the markets for four computer memory technologies that have been incorporated into industry standards for dynamic random access memory – DRAM chips."

Commissioner Pamela Jones Harbour is responsible for official opinion, and further adds “Through its successful strategy, Rambus was able to conceal its patents and patent applications until after the standards were adopted and the market was locked in. Only then did Rambus reveal its patents – through patent infringement lawsuits against JEDEC members who practiced the standard,” continues the official opinion.

The FTC ruling comes just days after a US judge halved the cash award that Rambus received after suing Hynix over patent infringement.  The Hynix ruling and the FTC statement are certainly no coincidence: the patents the FTC alleges that Rambus submarined into JEDEC are the same patents Hynix was sued over.

The plot further thickens with the fact that Rambus is simultaneously suing the major DRAM manufacturers for artificially deflating the price of SDRAM in an effort to dampen RDRAM sales.  Additionally, Attorneys General of 34 states have filed major antitrust lawsuits against the largest DRAM manufacturers on monopoly allegations, with the key evidence coming from email messages obtained by Rambus.  Samsung, the primary manufacturer for Rambus, was strikingly absent from the monopoly filings.

Interestingly enough, the FTC has not issued any penalties for Rambus, and doesn't even promise that any further charges will be brought against Rambus.  The FTC opinion adds "Now that the Commission has found, and determined the scope of liability, the Commission believes it would exercise its broad remedial powers most responsibly after additional briefings and, if necessary, oral argument devoted specifically to remedial issues." 

Ultimately, no party in this continuing saga has had a consistent or innocent message.  For those of us who follow the technology industry, the DRAM industry is the only sector where multiple parties claim the other has a monopoly.

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It just gets sillier and sillier
By masher2 (blog) on 8/2/2006 1:26:00 PM , Rating: 2
Rambus doesn't produce memory chips, and has never done so. It's "market share" is, has been, and will always be, zero. Rather makes it difficult to hold a monopoly position. Just another example of government meddling in a situation it doesn't understand, and will only make worse. The market has already sorted out the situation, and Rambus has seen the penalty of its short-sighted business tactics.

Quote: “Through its successful strategy, Rambus was able to conceal its patents ...

And, of course, no one is able to 'conceal' patents....they are a matter of public record. A company can fail to advertise their ownership of a particular patent...but since when did this become a crime?




RE: It just gets sillier and sillier
By rrsurfer1 on 8/2/2006 1:28:22 PM , Rating: 2
I dunno. To be honest when I read the article I wondered this myself, but I figure the FTC must know what they are doing... right?

:)


By cmsix on 8/2/2006 4:38:32 PM , Rating: 2
Unless I'm mistaken, FTC stand for Federal Trade Commission, so that means they are part of our government. Of course they don't know what they're doing.


cmsix


RE: It just gets sillier and sillier
By TomZ on 8/2/2006 1:31:39 PM , Rating: 2
quote:
And, of course, no one is able to 'conceal' patents....they are a matter of public record. A company can fail to advertise their ownership of a particular patent...but since when did this become a crime?

I thought the accusation was that RAMBUS represented to JEDEC members that it was asserting no patent rights when it was in fact applying for patents for the same technologies. I think that's what this quote is getting at:

Through its successful strategy, Rambus was able to conceal its patents and patent applications until after the standards were adopted and the market was locked in. Only then did Rambus reveal its patents – through patent infringement lawsuits against JEDEC members who practiced the standard.


By rrsurfer1 on 8/2/2006 1:35:17 PM , Rating: 2
Yea, after reading the article, I have to say the FTC may have some damning evidence that Rambus basically lied to JEDEC

Rambus withheld information that would have been highly material to the standard-setting process within JEDEC,” the opinion continues. “JEDEC expressly sought information about patents to enable its members to make informed decisions about which technologies to adopt, and JEDEC members viewed early knowledge of potential patent consequences as vital for avoiding patent hold-up. Rambus understood that knowledge of its evolving patent position would be material to JEDEC’s choices, and avoided disclosure for that very reason."


RE: It just gets sillier and sillier
By nilepez on 8/2/2006 2:19:26 PM , Rating: 2
Sheesh masher, at a minimum, they operated in bad faith. It was group that was supposedly working on an open standard. Nobody checked, because nobody, aside from rambus, considered that one of the members would make a free open standard their proprietary technology.

What they did was bad not just for Micron, Samsung et. al. It was bad for the consumers, because it increases the price of the technology. Had the other members known that Rambus owned the patents, they might have chosen a different implementation.

Rambus' actions were slimey and unethical at best.


RE: It just gets sillier and sillier
By TomZ on 8/2/2006 2:24:55 PM , Rating: 2
quote:
What they did was bad not just for Micron, Samsung et. al. It was bad for the consumers, because it increases the price of the technology.

Hey, aren't these some of the same companies, the DRAM manufacturers, that are now being sued for DRAM price fixing?

Not defending Rambus, just saying there seems be be enough blame to go around in that industry, if the current acusations are proved correct.


RE: It just gets sillier and sillier
By masher2 (blog) on 8/2/2006 3:00:52 PM , Rating: 1
> "Sheesh masher, at a minimum, they operated in bad faith"

I don't dispute that in the least. Still, that doesn't make Rambus a monopoly, nor it helpful for the FCC to step in now, half a decade after the entire situation's been resolved. Rambus's bad faith caught up with them. They don't compete with memory manufacturers, they sell technology to them. When you treat your customers badly...they go elsewhere.


RE: It just gets sillier and sillier
By rrsurfer1 on 8/2/2006 3:06:51 PM , Rating: 2
I don't think it really makes Rambus a monopoly, but it might fit the bill for violating article 2 of the sherman antitrust act - which is why the FTC called them such.

I don't know if I agree with you that the FTC ruling isn't helpful - I would be really suprised if this didn't overturn some of the rulings for Rambus and against other DRAM manufacturers. Which is a good thing because these litigation losses eventually get passed onto consumers.


RE: It just gets sillier and sillier
By masher2 (blog) on 8/2/2006 3:40:53 PM , Rating: 1
> " don't know if I agree with you that the FTC ruling isn't helpful - I would be really suprised if this didn't overturn some of the rulings for Rambus "

An FCC ruling won't affect a civil suit unless its still pending before a court. Even then, its unclear what effect it would have. A company that abuses monopoly power is liable for damages...but they still own their IP. Meaning they can legally bring suit for infringement. All this does is upon up the possibility of _future_ suits. Meaning more lawyers make money.

Remember one thing. Antitrust law exists to protect the consumer-- not other competitors. Let's look at how the market reacted to Rambus's actions. By their own admission, memory makers *lowered* DRAM prices to boost sales over RDRAM. That's good news for consumers, not bad.


RE: It just gets sillier and sillier
By Knish on 8/2/2006 10:58:37 PM , Rating: 2
Surely you mean FTC, not FCC?


RE: It just gets sillier and sillier
By ttowntom on 8/3/2006 7:29:42 AM , Rating: 2
Yep, sorry.


By Knish on 8/4/2006 2:55:03 PM , Rating: 2
ttowntom = masher?


RE: It just gets sillier and sillier
By TomZ on 8/2/2006 3:19:32 PM , Rating: 2
quote:
I don't dispute that in the least. Still, that doesn't make Rambus a monopoly

It's interesting, because the wording of the FTC Press Release seems to talk about a notion of an IP monopoly. I'm not sure how to interpret this. Are they saying that Rambus had enough patents to make it difficult/impossible for an DRAM manufacturer to design any DRAM products at all? Or that they held a "technology monopoly," and as such were able to set licensing costs and actively work to keep others out of the market?

Calling patentman - are you there?


By rrsurfer1 on 8/2/2006 3:32:31 PM , Rating: 2
Based on article 2 of the sherman antitrust act it seems like you can have an IP monopoly, and indeed it seems the FTC agrees:

§ 2 Sherman Act, 15 U.S.C. § 2
Monopolizing trade a felony; penalty

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

But I thought IP was intended to create a monopoly in the short-term... but perhaps because Rambus was silent during the forming of the standard the FTC feels this is an extreme case... still it's hard to justify it.

patentman would probably be of assistance in this.


By Viditor on 8/2/2006 9:20:31 PM , Rating: 2
quote:
It's "market share" is, has been, and will always be, zero. Rather makes it difficult to hold a monopoly position

It's monopoly is the claimed IP of all memory standards in use for many years now (and many future standards including FBDIMM). So while it has a zero marketshare of the physical memory sticks, it has a 100% share of the IP for those sticks...

quote:
no one is able to 'conceal' patents

They are indeed allowed to, and Rambus did so under the Patent Pending rules. When a company applies for a patent, they are guaranteed rights to that patent even before it's granted. They may delay the final granting of a patent for as many as 40 years by updating the contents of the application. During that period, the contents of the patent are kept completely confidential.
The reason it was a crime is that Rambus was a leading member of JEDEC, and was helping to guide the industry standards for memory...all the while they held patents that would guarantee they received royalties on the future memory standard they were helping to decide on...
While it's true that Rambus pulled out of JEDEC before the standards were finalized, most of the damage had already been done.


Then tere should be more systems with Rambus
By hstewarth on 8/2/2006 12:56:32 PM , Rating: 1
If this was true than there should be more systems with Rambus and most system would not be using DDR and DDR2 ram.

But yes everyone claims monopoly - it really pitty full now - even some claim monopoly on competitor but joined together with another large company.




RE: Then tere should be more systems with Rambus
By Phynaz on 8/2/2006 1:07:21 PM , Rating: 3
RTFA, this is about DDR patents.


RE: Then tere should be more systems with Rambus
By rrsurfer1 on 8/2/2006 1:14:04 PM , Rating: 2
It's suprising how many people post not only without reading the referenced article, but without reading the DailyTech atricle either. It's like they read the headline and decide they have enough information to form an opinion and have to share their extensive knowledge on the topic...


RE: Then tere should be more systems with Rambus
By hstewarth on 8/2/2006 1:30:14 PM , Rating: 2
Maybe I mistated my statement - or it some misundertanding somewhere - even myself..

So is this actually about the DDR standard that everone uses today or its about Rambus memory that was in Old P4's Reading this article did not appear to me that it referring to the DDR/DDR2 memory that is use today..

All I was stating was if if this was true, it would mean that more computers that will using the Rambus memory (RD-Dram?? ) that was use in Original P4's.


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