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Monday, June 15, 2009
Rambus Reaches Tentative Settlement with European Commission


Rambus announced that it has reached a tentative settlement with the European Commission to resolve the pending case against the Company.

Under the proposed resolution, the Commission would make no finding of liability relative to JEDEC-related charges, and no fine would be assessed against Rambus. In addition, Rambus would commit to offer licenses with maximum royalty rates for certain memory types and memory controllers on a forward-going basis. European Commission antitrust procedures stipulate that a final decision must be preceded by a consultation of interested third parties on the terms of the commitments offered; this consultation was initiated last week.

"Our view regarding standard-setting organizations is that the rules of such organizations must be written and clear, and that there should be consequences if such clear written rules are violated," said Thomas Lavelle, senior vice president and general counsel at Rambus. "We did nothing wrong during our participation in the JEDEC standard-setting organization, as demonstrated in multiple U.S. court victories including before the D.C. Court of Appeals. With this proposed resolution, we create a new platform where all parties can move forward by licensing our patented innovations for future use in their products rather than engaging in costly litigation."

Under the proposed resolution, Rambus will offer licenses with maximum royalty rates for five-year worldwide licenses of 1.5% for DDR2, DDR3, GDDR3 and GDDR4 SDRAM memory types. Licensees who ship less than 10% of their DRAM products in the older SDR and DDR DRAM types will enjoy a royalty holiday for those older types, subject to compliance with the terms of the license. In addition, Rambus will offer licenses with maximum royalty rates for five-year worldwide licenses of 1.5% per unit for SDR memory controllers through April 2010, dropping to 1.0% thereafter, and royalty rates of 2.65% per unit for DDR, DDR2, DDR3, GDDR3 and GDDR4 memory controllers through April 2010, then dropping to 2.0%. This commitment to license at the above rates will be valid for a period of five years from the adoption date of the Commitment decision. All royalty rates are applicable to future shipments only.

The European Commission originally brought charges against Rambus in August 2007 alleging violation of European Union competition law. The Commission's investigation followed complaints set forth by certain DRAM manufacturers originating with Rambus' 1992-1995 participation in an industry standard-setting organization, the Joint Electron Device Engineering Council ("JEDEC"). Similar charges had been pursued by the Federal Trade Commission (FTC) in the United States. The FTC recently closed its investigation following a series of U.S. Court rulings underlining that the allegations of Rambus' wrongdoing were ill-founded.


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