FTC in review - Part I (The Butterfly Effect)

Complaint Counsel (CC), In the Matter of Rambus Incorporated Docket No. 9302, was sent to the woodshed by Chief Administrative Law Judge Stephen J. McGuire’s Initial Decision.

Now, 13 months later, CC in its filing dated 3/30/05, attempts to bolster its resurrection efforts by exhuming evidence from Rambus, Inc. v. Infineon Technologies AG, which case was settled by the parties prior to Judge Payne jotting down his thoughts.

Reaching back into the ether of time, CC asserts that if Judge Timony would have had the documents that Judge Payne saw, he (Timony) would have had “the one piece missing” that would have reversed the chain of events that led to Judge Timony to deny CC’s motion for default judgment against Rambus and thereafter impose a series of presumptions undesirable to CC . . . the butterfly effect.

To refresh my memory, I went to the Federal Trade Commission’s site and read the official press release for the Initial Decision.

Summary of the Initial Decision

In his initial decision, Judge McGuire stated that the issues at question were:

(1) whether Rambus engaged in a pattern of deceptive, exclusionary conduct by subverting an open standards process;

(2) whether Rambus used that conduct to capture a monopoly in technology-related markets;

(3) whether Rambus' conduct violated antitrust law; and

(4) whether Rambus' conduct resulted in anticompetitive injury.

The decision states that Complaint Counsel failed to prove the violations alleged in the Complaint. The decision states that on the basis of the evidence Judge McGuire concluded:

"(1) the EIA/JEDEC patent policy encouraged the early, voluntary disclosure of essential patents and Respondent did not violate this policy;

(2) the case law upon which Complaint Counsel rely to impose antitrust liability is clearly distinguishable on the facts of this case;

(3) Respondent's conduct did not amount to deception and did not violate any 'extrinsic duties,' such as a duty of good faith to disclose relevant patent information;

(4) Respondent did not have any undisclosed patents or patent applications during the time that it was a JEDEC member that it was obligated to disclose;

(5) amendments to broaden Respondent's patent applications while a member of JEDEC were not improper, either as a matter of law or fact;

(6) by having a legitimate business justification for its actions, Respondent did not engage in exclusionary conduct;

(7) Respondent did not intentionally mislead JEDEC by knowingly violating a JEDEC disclosure rule;

(8) there is no causal link between JEDEC standardization and Respondent's acquisition of monopoly power;

(9) members of JEDEC did not rely on any alleged omission or misrepresentation by Respondent and, if they had, such reliance would not have been reasonable;

(10) the challenged conduct did not result in anticompetitive effects, as Complaint Counsel did not demonstrate that there were viable alternatives to Respondent's superior technologies;

(11) the challenged conduct did not result in anticompetitive effects as the challenged conduct did not result in higher prices to consumers; and

(12) JEDEC is not locked in to using Respondent's technologies in its current standardization efforts."

"For these reasons, Complaint Counsel have failed to sustain their burden to establish liability for the violations alleged. Accordingly, the Complaint is DISMISSED," Judge McGuire wrote.

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Stay tuned . . .