Rambus Tells the FCC Thank You!

Rambus Inc. (RMBS-NASDAQ) is up 6.5% at $21.15 after-hours after closing down 1.2% at $19.83 in normal trading.  It announced that the Federal Trade Commission has stayed portions of its remedy order effective upon Rambus’ filing of a timely petition for review in a court of appeals.  Rambus noted that it plans to appeal both the FTC’s liability and remedy orders in their entirety. 

Rambus also noted that the FTC clarified that its remedy is intended to be "forward-looking," and therefore Rambus is not restricted from collecting royalties for the use of its technologies in the past, nor is it required to refund royalties already paid.  The Commission has ordered that Rambus be permitted to collect royalty payments for use of its patented technologies during the period of the stay in excess of the FTC-imposed maximum royalty rates on SDRAM and DDR SDRAM products, provided funds above its maximum allowed rates be placed into an escrow account, and be distributed in accordance with the decision of the court of appeals.

On February 2, 2007, the Commission issued its remedy order setting the maximum royalty rate that Rambus can collect on sales made of certain JEDEC-compliant parts after the Order becomes effective, as follows: 0.25% for SDRAM products; 0.5% for DDR SDRAM products; 0.5% for SDRAM memory controllers or other non-memory chip components; and 1.0% for DDR SDRAM memory controllers or other non-memory chip components. The Commission determined that its remedy would not apply to DDR2 SDRAM or other post-DDR JEDEC standards.

Jon C. Ogg
March 19, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.