The Limited Legal Impact of the D.C. Circuit’s Rambus Decision
Deception in the standard setting process is anticompetitive if the deception leads to increased market power. In other words, the conceptual sequence of events is as follows:
- Deception:
- Reliance by the SSO on the deception in the standards-adoption decision
- Market power gain through inclusion in the standard.
- Market power
- Deception
- Higher prices as a result of the deception
The question is whether the Rambus facts better fit the FTC’s “first deception, then market power” or the D.C. Circuit’s “first market power, then deception” narrative. Strictly speaking, the D.C. Circuit’s opinion requires that the deception netted Rambus no additional market power from deceiving the SSO at all. All of the market power that could be gained came from the patent grant itself. The FTC’s position is softer in comparison. It does not require that the patent grand conferred no market power onto Rambus. All it requires is that some incremental market power was gained from the adoption of the standard.
It will be interesting to see how the FTC responds to this challenge, in particular because the D.C. Circuit did not only rely on the somewhat technical point in NYNEX, but also questioned the FTC’s findings of fact. One statement in dicta seems particularly apropos: “[T]he more vague and muddled a particular expectation of disclosure, the more difficult it should be for the Commission to ascribe competitive harm to its breach.”
RSS Feed
April 25th, 2008 at 3:48 pm
Regarding “The question is whether the Rambus facts better fit…”
Mr Kaiser,
Have you read this initial decision by the FTCs own Administrative Judge?
http://www.ftc.gov/os/adjpro/d9302/040223initialdecision.pdf
You also might read the jury form which was submitted in the recent trial regarding Rambus’ JEDEC conduct. I’m sorry, I can’t find it now, but someone else might be able to post that to this blog.