Rambus Files Antitrust Suit against Memory Chip Makers

Alleging that several DRAM manufacturers have colluded against using its products, the memory chip technology company charges the defendants with fixing prices and conspiring to form a monopoly.

Memory chip technology company Rambus has filed an antitrust lawsuit against four DRAM manufacturers, whom it has accused of colluding against using its products.

The suit, which Rambus Inc. filed Wednesday in Superior Court in San Francisco, charges Micron Technology Inc. and its subsidiary Micron Semiconductor Inc.; Siemens AG and Siemens Corp.; Infineon Technologies AG and Infineon Technologies North America Corp.; plus Hynix Semiconductor Inc. and its American subsidiary Hynix Semiconductor America Inc.

Officials for Micron Technology, Boise, Ida., said they had not seen a copy of the suit, but would vigorously contest the suit.

The suit, for which Rambus said total damages could exceed $1 billion, charges the defendants with price-fixing in violation of the Cartwright Act, a conspiracy to form a monopoly, "intentional interference with a prospective economic advantage," and violation of a specific California state code prohibiting unfair competition. It asks for damages and injunctive relief prohibiting the type of behavior the suit alleges.

The Rambus suit is the latest shot in what has become a hard-fought battle for the future of the semiconductor industry. When Rambus introduced its high-speed memory architecture in 1992, the company quickly signed licensing agreements with most of the dynamic RAM (DRAM) makers of the time, including Samsung, Toshiba, LG Semicon and NEC Corp.

DRAM makers, already fighting commodity status, publicly and privately complained about paying royalties to Rambus. The complaints, Rambus alleges, devolved into a cohesive effort to prevent the Rambus technology from succeeding in the market. In a pivotal moment in 2002, Intel Corp. dropped the technology from its roadmap.

/zimages/1/28571.gifAn administrative law judge in February tossed out a government lawsuit against Rambus, allowing the company to continue enforcing its patents through lawsuits filed against memory makers. Click here to read more.

"This is not about the use of our technology. This is about a concerted effort, a series of efforts to disparage our technology, to misinform about our technology, and to push it out of the market," said John Danforth, a vice president and general counsel at Rambus, based in Los Altos, Calif., in an interview. "They wanted to boycott our product in the market, and disparage it and eventually kill it—thats what they say in an e-mail, they talked about killing our product."

From 1995 through 2002, Rambus executives alleged that the defendants had engaged in a collusive effort to try to kill the Rambus standard, either through a collaborative attempt to fight the company or through various pricing measures.

Rambus has filed suit against Micron and Infineon alleging patent infringement, and the suits are ongoing. But a fight with the Federal Trade Commission ended in February when an independent administrative law judge for the FTC dismissed an antitrust lawsuit against the company. The FTC later appealed the decision. Some of the evidence used in Rambus own antitrust claims surfaced in the FTCs action, Danforth said.

A Micron official defended his companys action.

"Micron builds products to meet the demands of its customers," said Dave Parker, Microns director of corporate communications, in a statement issued in response to the Rambus suit. "Rambus failed in the marketplace because of excessive manufacturing costs and minimal RDRAM demand. Several memory manufacturers, including the worlds largest, continue to produce RDRAM products sufficient to meet its limited, worldwide market demand. It is unfortunate that Rambus is trying to blame the market failure of its RDRAM technology on others, like Micron, who ultimately responded to marketplace demands."

"We believe Rambus is attempting to deflect attention away from the Federal Trade Commissions (FTC) ongoing suit against Rambus for alleged antitrust violations," Parker added.

Meanwhile, the U.S. Department of Justice has launched its own investigation into the price-fixing claims. In December, a Micron employee pleaded guilty to obstruction of justice in hiding documents containing a competitors pricing information.

Representatives from the other defendants were not immediately available for comment.

This story was updated at 6:12 PM EDT on May 5 with statements from Micron officials.

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