FTC Draws Line in the Sand Regarding Patent Holder’s Behavior in Standard-Setting Process

On August 2, 2006, the Federal Trade Commission (FTC) released its unanimous 120-page decision finding that Rambus Inc., a maker of computer industry-standard SDRAM and DDR SDRAM memory chips, has violated Section 2 of the Sherman Act and Section 5 of the Federal Trade Commission Act (FTCA) by using deception to monopolize the market for dynamic random access memory chips. The case will now move to a remedy stage.

The FTC’s decision is based upon Rambus’s intentional misrepresentations to competitors in the context of an industry-wide standard-setting body; a brief recounting of the basis for the FTC’s finding may therefore be helpful for businesses who engage in standard-setting or other cooperative efforts.