Rambus Inc caps royalty rates for DRAM patents

The US company, Rambus Inc, provider of high-speed interface technology, well known for its aggressive intellectual property based litigation practices following the introduction of DDR-SDRAM memory, has offered to cap royalty rates for its DRAM patents.

Rambus Inc, which holds patents for a majority of DRAM (dynamic random access memory) chips that are used in PCs and other electronic equipment, have been effectively ‘forced’ to take this decision after the company’s conduct in relation to the royalty rates it received for its DRAM patents were deemed disproportionate by the EC.

DRAMs had been standardised by a US standard-setting organisation. Rambus Inc allegedly failed to disclose the existence of its patents and patent applications which it later claimed were relevant to the adopted standard. Once industry-wide standards had been set, Rambus Inc asserted its patents and royalty rates at excessive levels.

The EC described this conduct as a patent ambush and Rambus Inc, in order to settle this case, has offered to cap royalty rates for its DRAM patents for a period of five years.

It should be noted that the Federal Trade Commission (FTC) claim in the US, which charged Rambus Inc with violating federal antitrust laws by deliberately engaging in a pattern of anticompetitive acts and practices that served to deceive an industry-wide standard-setting organisation, resulting in adverse effects on competition and consumers, has been formally dismissed by the US Courts.

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