Rambus Inc. has scored another legal victory in its long-running battle to collect millions of dollars in royalties on its patented designs for computer memory chips.
A federal appeals court ruled Tuesday that the Federal Trade Commission didn't offer enough evidence in accusing the company of engaging in monopolistic behavior. Shares of the Los Altos-based company jumped on the news, gaining 65 cents, or 3 percent, to end at $23.19.
The U.S. District Court of Appeals for the District of Columbia Circuit overruled the FTC's finding from 2006 that Rambus violated antitrust laws.
The appeals court sent the case back to the FTC. An FTC spokeswoman said the commission is reviewing the ruling but didn't have further comment Tuesday.
Rambus is still facing a number of other court challenges and the possibility of further FTC action. But General Counsel Thomas Lavelle said Tuesday's win is another important step toward the company clearing its name and collecting unpaid fees it claims it's owed.
"They're saying in multiple ways that the factual underpinning the FTC was relying on was just not enough to get them there," he said in an interview. "We think we've been vindicated again in this case."
Rambus' long-standing legal troubles center on claims the company created a monopoly in the 1990s by deceiving an engineering council that was establishing industry standards for DRAM, or dynamic random access memory. DRAM chips are the most common type of memory chips used in personal computers.
Rambus is accused of not disclosing that its patented technologies were being incorporated into the standards for DRAM chips, a situation that causes virtually any company making those chips to pay Rambus hefty royalty fees of Rambus' choosing.
Had the company alerted the Joint Electron Device Engineering Council _ which counted Rambus as a member _ it would have imposed caps on the licensing fees Rambus is allowed to charge.
The FTC previously found Rambus deliberately withheld information from the council about the patents it had secured or was in the process of securing and ruled Rambus had illegally obtained a monopoly. A year it later set maximum royalty rates that Rambus could charge on the patents and required the company to license them.
The appeals court, however, found the FTC "failed to sustain its allegation of monopolization" and raised questions about whether there's enough evidence to support the FTC's claim that Rambus engaged in deceptive behavior at all in the standards-setting process.
The court ruled that even if Rambus did deceive the engineering council, it did not harm competition in a monopolistic way, undercutting the FTC's argument that Rambus should be punished for violating antitrust laws.
Tuesday's ruling follows another big legal victory for Rambus last month, when a jury in U.S. District Court in San Jose found in Rambus' favor in a related case.
The jury found that Rambus didn't engage in monopolistic behavior, rejecting claims made by chip makers Micron Technology Inc., Hynix Semiconductor Inc. and Nanya Technology Corp. in a lawsuit originally filed in 2000. Micron said it planned to appeal the jury's finding.
Rambus claims it's owed royalties from chip makers using the technologies in their DRAM products. The chip makers involved in the litigation claim Rambus engaged in illicit behavior to secure those patents, which they argued should be rendered invalid, voiding any royalty payments.
Rambus makes most of its money by licensing chip designs created by its engineers and used by other companies in their chips. The company took in about $180 million in revenue in 2007.
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