U.S. News

Rambus Stock Surges After FTC Ruling on Royalties


The Federal Trade Commission issued a ruling Monday in the lengthy antitrust case against Rambus, setting the maximum royalty rates the memory chip maker can charge on four semiconductor designs.

The order didn't go as far as some investors had feared, and Rambus' stock

surged 15%.

The commission ordered maximum royalty rates ranging from 0.25 percent to 1 percent for the four memory chip products. The order set the maximum royalty rates for three years, after which the rates will go to zero.

The order also requires Rambus to license its technology.

The company said Monday it would seek to stay the order pending an appeal. If the appeal is unsuccessful, the order will become effective in 60 days.

In 2002, the FTC charged that Rambus illegally obtained a monopoly in the 1990s when it secured patents for two popular types of memory chips used in personal computers. Rambus was accused of failing to disclose to an engineering council that its patents had been incorporated into an industry standard regarding memory technology.

An administrative law judge dismissed the complaint in 2004, but the FTC overturned that ruling in July 2006.

Investors had worried the FTC might bar Rambus from collecting any royalties at all. And according to Rambus, the order does not affect several next-generation memory chip technologies.