Professional Documents
Culture Documents
In The: Petitioner
In The: Petitioner
,JAN 2 3 2009
OFFICE OF THE CLERK
No. 08-694
IN THE
RAMBUS INCORPORATED,
Respondent.
A. DOUGLAS MELAMED
Counsel of Record
PAUL R.Q. WOLFSON
WILMER CUTLER BICKERING
HALE AND DORR LLP
1875 Pennsylvania Ave., N.W.
Washington, D.C. 20006
(202) 663-6000
Blank Page
QUESTIONS PRESENTED
(i)
CORPORATE DISCLOSURE STATEMENT
(ii)
TABLE OF CONTENTS
Page
i
QUESTIONS PRESENTED ............................................
CORPORATE DISCLOSURE STATEMENT ............. ii
v
TABLE OF AUTHORITIES ...........................................
1
STATEMENT .....................................................................
13
ARGUMENT .....................................................................
A. The Court Of Appeals’ Decision Is Cor-
14
rect ........................................................................
1. The Court Of Appeals Did Not Im-
pose An Excessive Burden Of Cau-
16
sation ..............................................................
2. A Section 2 Plaintiff Must Show
More Than Disruption Of The
20
Process ...........................................................
3. The Commission Was Required To
Prove More Than That Rambus’s
Conduct Enabled It To Avoid A
22
RAND Commitment ...................................
B. This Case Does Not Merit Review For
26
Other Reasons As Well ......................................
1. There Is No Conflict Among The
Circuits ..........................................................
26
2. Review Is Not Needed Because Of
Possible Inconsistencies In The
27
Future ............................................................
C. The Weakness Of The Commission’s
Case On Deception Further Counsels
31
Against Review ...................................................
(iii)
iv
TABLE OF CONTENTS---Continued
Page
CONCLUSION ................................................................. 34
V
TABLE OF AUTHORITIES
CASES
Page(s)
Allied Tube & Conduit Corp. v. Indian Head
17, 29
Inc., 486 U.S. 492 (1987) ......................................
American Society of Mechanical Engineers v.
Hydrolevel Corp., 456 U.S. 556 (1981) ...............17, 29
Aquatherm Industries, Inc. v. Florida Power
& Light Co., 145 F.3d 1258 (llth Cir. 1996) ............21
Association for Intercollegiate Athletics for
Women v. NCAA, 735 F.2d 577 (D.C. Cir.
15
1984) .............................................................................
Barry Wright Corp. v. ITT Grinnell Corp.,
19
724 F.2d 227 (lst Cir. 1983) .......................................
Berkey Photo, Inc. v. Eastman Kodak Co.,
603 F.2d 263 (2d Cir. 1979) ..................................21, 23
Broadcom Corp. v. Qualcomm Inc., 501 F.3d
11, 26
297 (3d Cir. 2007) ..................................................
Brooke Group, Ltd. v. Brown & Williamson
Tobacco Corp., 509 U.S. 209 (1993) ....................14, 21
California Computer Products, Inc. v. IBM
Corp. 613 F.2d 727 (9th Cir. 1979) ............................
15
California Dental Association v. FTC,
23
526 U.S. 756 (1999) .....................................................
Concord Boat Corp. v. Brunswick Corp.,
15
207 F.3d 1039 (8th Cir. 2000) ....................................
Continental T.V., Inc. v. GTE Sylvania Inc.,
15
433 U.S. 36 (1977) .......................................................
Covad Communications Co. v. Bell Atlantic
21
Co., 398 F.3d 666 (D.C. Cir. 2005) ............................
vi
TABLE OF AUTHORITIES--Continued
Page(s)
Dippin’ Dots v. Mosey, 476 F.3d 1137 (Fed.. Cir.
2007) ...........................................................................
~.21
Discon Inc. v. NYNEX Corp., 86 F. Supp. 2d
154 (W.D.N.Y. 2000) ...................................................
24
FTC v. Indiana Federation of Dentists,
476 U.S. 447 (1986) .....................................................
23
Forsyth v. Humana, Inc., 114 F.3d 1467 (9th
Cir. 1997) ......................................................................
24
Hynix Semiconductor, Inc. v. Rambus Inc.,
Nos. C-00-20905, C-05-00334, C-06-00244,
2008 WL 2951341 (N.D. Cal. July 24, 2008) ............33
Hynix Semiconductor Inc. v. Rambus Inc.,
441 F. Supp. 2d 1066 (N.D. Cal. 2006) ..................... 32
Illinois Tool Works, Inc. v. Independent Ink,
Inc.., 547 U.S. 28 (2006) .............................................. 18
International Salt Co. v. United States,
332 U.S. 392 (1947) ..................................................... 18
Kingsdown Medical Consultants, Ltd. v. Hol-
lister, Inc., 863 F.2d 867 (Fed. Cir. 1988) ..................5
MCI Communications Corp. v. American
Telephone & Telegraph Co., 708 F.2d 1081
(7th Cir. 1983) ..............................................................15
Micron Technologies, Inc. v. Rambus, Inc, No.
Civ. A. 00-792, 2006 WL 1653136 (D. Del.
June 15, 2006) .............................................................. 32
NYNEX Corp. v. Discon, Inc., 525 U.S. 128
(1998) ......................................................................
11, 24
vii
TABLE OF AUTHORITIES--Continued
Page(s)
New York v. Julius Nasso Concrete Corp.,
202 F.3d 82 (2d Cir. 2000) ..........................................15
Newman v. Universal Pictures, 813 F.2d 1519
(9th Cir. 1987) ..............................................................24
Qualcomm Inc. v. Broadcom Corp., 548 F.3d
1004 (Fed. Cir. 2008) ..................................................29
Radiant Burners v. People’s Gas Light & Coke
Co., 364 U.S. 656 (1961) .............................................17
Rambus Inc. v. Infineon Technologies AG,
318 F.3d 1081 (Fed. Cir. 2003) .............. 4, 6, 13, 32, 33
Schaffer v. Weast, 546 U.S. 49 (2005) ..............................15
Schuylkill Energy Resources, Inc. v. Penn
Power & Light Co., 113 F.3d 405 (3d Cir.
1997) .............................................................................24
Spectrum Sports, Inc. v. McQuillan, 506 U.S.
447 (1993) ............................................................... 14, 20
Stambler v. Diebold, Inc., 11 U.S.P.Q. 2d 1709
(E.D.N.Y. 1988) ..........................................................29
Standard Oil Co. v. United States, 337 U.S. 293
(1949) ............................................................................ 18
Tampa Electric Co. v. Nashville Coal Co.,
365 U.S. 320 (1961) .....................................................18
United States v. Arnold, Schwinn & Co.,
388 U.S. 365 (1967) .....................................................15
United States v. Microsoft Corp., 253 F.3d 34
(D.C. Cir. 2001) ............................................... 10, 14, 19
ooo
Vlll
TABLE OF AUTHORITIES---Continued
Page(s)
United States v. Westinghouse, Inc., 648 F.2d
¯ 642 (9th Cir. 1981) .................... ....................................
15
Verizon Communications, Inc. v. Law Offices
of Curtis V. Trinko, LLP, 540 U.S. 398
(2004) ...................................................
: ...................10, 23
STATUTES
15 U.S.C.
§ 2 .............................................................................
i, 1, 6
§ 4 .........................................
: ................................ ........
28
§ 14 ................................................................................
18
§ 15 ................................................................................
28
§ 45 ............................................................................
6, 28
§ 53 ................................................................................
28
28 U.S.C. § 2343 ................................................................. 28
OTHER AUTHORITIES
III Areeda, Phillip E. & Hovenkamp, Herbert,
Antitrust Law (3d ed. 2008) ................................ 19, 20
XI Hovenkamp, Herbert, Antitrust Law (2d
ed. 2005) .......................................................................
18
II Hovenkamp, Herbert et al., IP and Anti-
trust (2007 Supp.) ........................................................ 20
II Hovenkamp, Herbert et al., IP and Anti-
trust (2009 Supp.) .................................................. 20, 25
Hovenkamp, Herbert, Standards Ownership
and Competition Policy, 48 B.C.L. Rev. 87
(2007) .......................................................................
20, 29
ix
TABLE OF AUTHORITIES--Continued
Page(s)
Lemley, Mark A., Intellectual Property Rights
and Standard-Setting Organizations,
32
90 Cal. L. Rev. 1889 (2002) ........................................
Blank Page
THE
No. 08-694
RAMBUS INCORPORATED,
Respondent.
STATEMENT
The Federal Trade Commission seeks review of a
unanimous decision of the United States Court of Ap-
peals for the District of Columbia Circuit that applied
well-established, uncontroversial principles to set aside
a determination by the Commission that Rambus had
violated Section 2 of the Sherman Act. The court of
appeals held that the Commission’s determination was
erroneous because the Commission did not find that the
allegedly unlawful conduct, which ended more than
twelve years ago, excluded rivals, raised entry barri-
ers, or caused Rambus’s monopoly. The court also dis-
cussed at length other fundamental problems with the
Commission’s determination. The court subsequently
2
denied the Commission’s request for rehearing en banc,
11-0. The decision of the court of appeals was correct;
there are no conflicts among the circuits; a~ad the Solici-
tor General declined to file a petition for certiorari on
behalf of the Commission. The petition should be de-
nied.
1. Rambus was founded in 1990 by two engineer-
ing professors, Mike Farmwald and Mark Horowitz. In
the late 1980s, Farmwald realized that memory chips
were not keeping pace with increases in computer proc-
essing speeds. The resulting "memory bottleneck"
threatened to impede advances in the computer indus-
try. Farmwald and Horowitz invented new computer
memory interface technologies and, in 1990, filed a pat-
ent application describing those inventions. See Pet.
App. 5a-6a.~ Their inventions vastly increased the use-
fulness of Dynamic Random Access Memc,ry (DRAM),
which is an essential component of most personal com-
puters and other electronic devices.
While Rambus was seeking patent protection for
those inventions, the computer memory industry was
working to standardize DRAM technologies through a
standard-setting organization (SSO) known as the
JEDEC Solid State Technology Association (JEDEC).
JEDEC’s members included manufacturers, such as
IBM, Infineon, Micron, and Samsung, that compete
with one another, as well as non-manufacturing compa-
nies, such as Rambus, that obtain income by licensing
1519 (9th Cir. 1987) (conspiracy to avoid paying sums owed under
contract). Neither the Commission nor amici cites any case to the
contrary.
2o Without acknowledging the passage and reasoning in the
IP and Antitrust treatise that speak directly to the issue pre-
sented in this case ~see p. 20, supra), the Commission quotes a pas-
sage from the treatise to the effect that, if "the plaintiff can show
that the patent owner would have licensed the patent at a competi-
tive rate" if it had disclosed the patent before the SSO acted "but
charged a higher rate because of the nondisclosure," the over-
charge can be regarded as competitive harm from the nondisclo-
sure. Pet. 25 n.8. But, as noted, there is no evidence that Rambus
would have licensed its technologies at a more competitive rate or
that a RAND commitment would have required it to do so. More-
over, the Commission fails to note that the passage it quotes ex-
plicitly refers to the situation where the SSO "does not require
that [the patents] be licensed." IP and Antitrust (2009 Supp.)
§ 35.5, at 35-47. The passage thus does not apply to the situation
here, in which disclosure is used to trigger a RAND commitment
and thus an obligation to license the patents.
26
In any event, the Commission’s contention would
mean that any deceptive or other conduct that affects
prices violates Section 2, even if it does not exclude ri-
vals or otherwise affect market structure. The cases
have consistently rejected that contention. See p. 21,
supra.
B. This Case Does Not Merit Review For Other Rea-
sons As Well
. The Commission’s other arguments fi)r review are
also wide of the mark.
21 The court reiterated that point at least six times. See 501
F.3d at 304 (twice), 306, 313, 314, 316.
27
tion 2 claim might be stated merely by alleging that the
patentee’s deceit had an "impact" on the "competitive
standard-setting process" (Pet. 28), without establish-
ing that the misconduct actually caused incorporation of
patented technology into a standard. It was that ef-
fect--the inclusion of Qualcomm’s patented technology
in the standard--that gave rise to Qualcomm’s monop-
oly. Rambus’s nondisclosure had no such effect.
Although the Commission asserts that the decision
below "departed from the causation standard that other
authorities support" (Pet. 26), it alleges no other circuit
conflict. Instead, the Commission relies for that asser-
tion principally on a passage in a treatise, but as ex-
plained above (p. 19), that passage addresses a different
issuenwhether conduct is exclusionary in nature or
"improper"--not the standard of causation. Whether
the conduct was improper is not the issue here; it is un-
disputed that deception can cause the creation or main-
tenance of monopoly. Pet App. 15a. The question here
is whether Rambus’s nondisclosure in fact had that ef-
fect, and the Commission did not find that it did.
2. Review Is Not Needed Because Of Possible
Inconsistencies In The Future
The Commission suggests that the decision below
"is likely to lead to inconsistent results in monopoliza-
tion cases" in the future (Pet. 26-27). That is a surpris-
ing conjecture given the lack of inconsistency with the
first one hundred-plus years of Sherman Act jurispru-
dence.
The Commission also speculates that parties sub-
ject to future Commission enforcement actions will
seek review in the D.C. Circuit to gain the benefit of
that court’s decision in this case. That concern is over-
stated. First, unlike some provisions for judicial review
28
of agency orders, 15 U.S.C. § 45(c) does not provide for
judicial review of all Commission orders in the D.C.
Circuit,22 but lays venue there only if the petitioner
"resides" or "carries on business" in the District of Co-
lumbia or if the act or practice in question was used
there. Many firms will be unable to seek review in the
D.C. Circuit under this provision. Further, the Com-
mission, the United States, and private litigants can
enforce Section 2 by bringing actions directly in district
courts, with appeals to the various regional circuits.
See 15 U.S.C. §§ 4, 15(a), 53(b). Should another court of
appeals disagree with the D.C. Circuit’s discussion of
causation, this Court could then decide whether that
conflict warrants its review of the issue. There is no
present conflict.
Moreover, the issue genuinely presented by the
Commission’s petition is quite narrow--wlhether a Sec-
tion 2 violation is established when a fact-finder is un-
able to conclude by a preponderance of the evidence
that alleged deception several years earlier caused an
SSO to adopt a particular technology as l~he standard.
That issue has rarely arisen in litigation.
There is no basis for the Commission’s exaggerated
assertion (echoed by some amici) that, even in the con-
text of standard-setting, the court of appeals’ decision
"would immunize such deception from antitrust liability
in most circumstances’" (Pet. 15; see Hewlett-Packard
Br. 10). The court of appeals did not, for example,
question the Broadcom court’s conclusion that decep-
tion can violate Section 2 if it causes an SSO to adopt
Respectfully sub:mitted.
A. DOUGLAS MELAMED
Counsel of Record
PAUL R.Q. WOLFSON
WILMER CUTLER BICKERING
HALE AND DORR LLP
1875 Pennsylvani[a Ave., N.W.
Washington, D.C. 20006
(202) 663-6000
JANUARY 2009