Rambus to Put a Cap on Its Royalty Rates for Standard DRAM in Europe

Rambus and European Commission to Agree on DRAM Royalties

by Anton Shilov
06/15/2009 | 05:09 PM

Rambus, a leading developer of memory and interconnection technologies has announced that it had reached a tentative settlement with the European Commission to resolve the pending case against the Company. Under the proposed resolution, the Commission would make no finding of liability relative to JEDEC-related charges, and no fine would be assessed against Rambus. However, Rambus will have to cap royalty rates on standard memory.

 

On 30 July 2007, the European Commission adopted a Statement of Objections against Rambus. This outlined the Commission’s preliminary view that Rambus may have infringed Article 82 of the EC Treaty by abusing a dominant position in the market for dynamic random access memory (DRAM)

The Commission’s preliminary view, set out in the Statement of Objections, was that Rambus engaged in intentional deceptive conduct in the context of the standard-setting process, for example by not disclosing the existence of the patents and patent applications which it later claimed were relevant to the adopted standard. Against this background, the Commission's provisional view, as outlined in the Statement of Objections, was that Rambus was abusing its dominant position by claiming unreasonable royalties for the use of its patents against the JEDEC-compliant DRAM manufacturers at a level which, absent its conduct, it would not have been able to charge.

Following the Statement of Objections, Rambus proposed commitments to address the Commission's concerns. In particular, Rambus commits during five-years to put a cap on its royalty rates for products compliant with the JEDEC standards.

Under the proposed resolution, Rambus will offer licenses with maximum royalty rates for five-year worldwide licenses of 1.5% for DDR2, DDR3, GDDR3 and GDDR4 SDRAM memory types. Licensees who ship less than 10% of their DRAM products in the older SDR and DDR DRAM types will enjoy a royalty holiday for those older types, subject to compliance with the terms of the license. In addition, Rambus will offer licenses with maximum royalty rates for five-year worldwide licenses of 1.5% per unit for SDR memory controllers through April 2010, dropping to 1.0% thereafter, and royalty rates of 2.65% per unit for DDR, DDR2, DDR3, GDDR3 and GDDR4 memory controllers through April 2010, then dropping to 2.0%. This commitment to license at the above rates will be valid for a period of five years from the adoption date of the Commitment decision. All royalty rates are applicable to future shipments only.

Interested parties can submit comments within one month from the date of publication. Following the market test, the Commission may decide to adopt a decision under Article 9 (1) of Regulation 1/2003, making the commitments legally binding on Rambus.