Rambus ties strained as Intel, DRAM makers ponder FTC antitrust suit

Rambus ties strained as Intel, DRAM makers ponder FTC antitrust suit
By Jack Robertson, EBN
July 17, 2000 (1:19 p.m. EST)
URL: http://www.eetimes.com/story/OEG20000717S0028

SANTA CLARA, Calif. -- Intel Corp. and several major DRAM makers held talks last week to consider whether to ask the Federal Trade Commission to investigate Rambus Inc. on antitrust grounds, according to industry sources.

Though its involvement most likely does not constitute a high-level break with Rambus, Intel's tacit participation in the discussions has cast a cloud of uncertainty over its relationship with the third-party intellectual-property developer and longtime Intel design partner. One industry executive who attended the meeting indicated that the once-unified Intel/Rambus duo has become disjointed as various factions within the microprocessor giant promote different agendas.

"Intel operations now are so fragmented that the group involved with [discussing the complaint] may have been following their own individual course," the executive said, speaking on condition that he not be named.

The FTC action is being considered by the Intel-led Advanced DRAM Technology (ADT) alliance, which met last week in Silicon Valley. The group-whose other members include Hyundai MicroElectronics, Infineon Technologies, Micron Technology, NEC, and Samsung Electronics-is expected to reach a decision in 30 days.

In addition to the antitrust complaint, the ADT panel is said to be considering a civil suit in an effort to have Rambus' synchronous-memory patents declared invalid.

While one ADT member described Intel as an "active participant" in the talks, it was unclear what stance the company took relative to the proposed FTC action. Still, even Intel's implicit involvement in the antitrust negotiations-combined with the presence of leading Direct RDRAM manufacturer Samsung-was an irony not lost on the meeting's members.

An Intel spokesman confirmed that the ADT met last week, but said the discussions were confidential. The company declined to comment on whether it has engaged in antitrust deliberations.

At issue is whether Rambus ' claim to patents protecting a synchronous-memory interface violates the Sherman Antitrust Act. DRAM makers allege that the Mountain View, Calif., IP house, after securing licenses to its proprietary Direct RDRAM technology from the majority of memory-chip vendors, is now unfairly seeking royalties for the only other viable alternative-synchronous DRAM (SDRAM).

The DRAM companies are basing their antitrust strategy on a 1996 consent decree issued by the FTC against Dell Computer Corp. The FTC ruled that Dell could not collect licensing fees on certain patents because the technology the patents claimed to protect was developed as part of an open-industry-standards effort.

While Hitachi Ltd. and Toshiba Corp. have agreed to license Rambus' synchronous-memory patents, other DRAM suppliers argue that Rambus' claims are unenforceable because the SDRAM interface was formulated during open meetings of the JEDEC standards body and is not subject to fees.

Rambus did not respond to requests for comment.

If the DRAM companies do file a complaint with the FTC, JEDEC is expected to file a friend-of-the-court brief supporting the petition, according to sources. A civil action is being considered on the grounds that the synchronous-memory technology has been in wide use and constitutes prior art.

Some participants in last week's meeting questioned whether Intel might leak information to Rambus should the DRAM alliance decide to petition the FTC to begin an investigation. While sources said Intel's ADT representatives agreed to keep the discussions confidential, one DRAM company executive observed that Rambus probably has the resources to uncover the nature of the talks. "If EBN can find out, certainly Rambus can," he said.

The ADT panel was formed last year by Intel and the industry's five leading DRAM producers to design the next-generation DRAM for the 2003 market. From its inception, however, the group has questioned the extent of Intel's relationship with Rambus, since Rambus was not i nvited to join the alliance.