The Latest in AT/IP: FTC Rules Against Rambus -- Lack of Disclosure Leads to Finding of Violation of the Sherman Act
Client Alert | 1 min read | 08.02.06
The Federal Trade Commission has determined that Rambus, Inc. unlawfully monopolized the markets for four computer memory technologies that have been incorporated into industry standards for dynamic random access memory ("DRAM") chips. While participating in the Joint Electron Device Engineering Council (JEDEC), a standard-setting organization, Rambus failed to disclose to the organization or its members that it was actively working to develop, and possessed, a patent and several pending patent applications that involved specific technologies ultimately adopted in the standards. The FTC found that Rambus' omission constituted deceptive conduct sufficient to violate Section 2 of the Sherman Act.
In rendering its opinion, the FTC explained that members of standard-setting organizations have a good faith duty to disclose intellectual property rights, particularly where membership in an organization expressly requires such disclosure. The FTC held that where disclosure is required, non-disclosure of a patent followed by adoption of that patent into a standard and royalty demands by the non-disclosing patent owner was considered a "material omission" constituting a violation of Section 5 of the FTC Act in addition to Section 2 of the Sherman Act. Appeals are expected.
For more information: http://www.ftc.gov/opa/2006/08/rambus.htm
Insights
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The National Association of Insurance Commissioners (NAIC) is intensifying its oversight of how insurers use AI — and the pace of regulatory activity shows no signs of slowing. Over the past several months, the NAIC has published a formal Issue Brief staking out its position on federal AI legislation, launched a multistate AI Evaluation Tool pilot aimed at examining insurers’ AI governance programs, and continued to expand adoption of its AI Model Bulletin across state lines. These developments continue a trend towards enhancing regulation; the NAIC adopted AI Principles in 2020 and a Model Bulletin in 2023 clarifying that existing insurance laws apply to AI systems and establishing expectations for governance, documentation, testing, and third-party oversight. That Model Bulletin has now been adopted in approximately 24 states.
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California Considering A Massive Expansion of Its Antitrust Laws
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