June 23, 2005 10:04 pm

Brussels probes Rambus for ‘patent ambush'

The European Union's top antitrust watchdog is investigating the conduct of Rambus, the US memory chip designer, over allegations that have already sparked a probe by the US Federal Trade Commission.

The European Commission is trying to establish whether Rambus is guilty of setting a so-called “patent ambush” a form of competition abuse that is raising concerns on both sides of the Atlantic. It involves a company that takes part in setting an industry standard without declaring that the new standard infringes on its patents.

Once the standard is agreed, the company can then demand royalties from other groups which have no choice but to follow the industry standard.

The Commission probe against Rambus was revealed in recent company filings to the US Securities and Exchange Commission, and was confirmed by a spokesman for the EU regulator.

“The European Commission is investigating allegations of patent ambush by Rambus in the memory chip sector,” the spokesman said. According to the SEC filings, the probe was launched in 2003.

People familiar with the case said Brussels was investigating the same allegations that had been pursued in the US.

The FTC in 2002 charged Rambus with deceiving an industry standards body called Jedec, with the aim of getting a computer chip technology covered by one of its patents adopted as an industry standard.

This later allowed Rambus to claim royalties from chipmakers such as Hitachi, Samsung and Toshiba.

However, in a surprise ruling last year a court dismissed the FTC's case against Rambus, a decision that is being appealed.

Last month, Rambus said the FTC was reopening the record of the case to include information that the chip designer allegedly destroyed documentary evidence.

The continuing doubts surrounding the US case against Rambus could also have an impact on the European investigation.

A Rambus spokeswoman on Thursday referred to its SEC filings when asked about the EU investigation.

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