United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 14, 2008 Decided April 22, 2008 

No. 07-1086 

RAMBUS INCORPORATED,

PETITIONER

v. 

FEDERAL TRADE COMMISSION, 

RESPONDENT

Consolidated with 

07-1124 

On Petitions for Review of Final Orders of the 

Federal Trade Commission 

A. Douglas Melamed argued the cause for petitioner. 

With him on the briefs were Paul R.Q. Wolfson, Sambhav N. 

Sankar, Andrew J. Ewalt, and Pratik A. Shah.

S. M. Oliva, appearing pro se, was on the brief for amicus 

curiae S. M. Oliva in support of petitioner. 

John F. Daly, Deputy General Counsel for Litigation, 

Federal Trade Commission, argued the cause for respondent. 

With him on the briefs were John D. Graubert, Principal 
2

Deputy General Counsel, William E. Cohen, Deputy General 

Counsel for Policy Studies, and Leslie R. Melman, Imad D. 

Abyad, Richard B. Dagen, and Patrick J. Roach, Attorneys. 

Alan J. Weinschel, Daniel I. Prywes, and Daniel T. 

O'Connor were on the brief of amici curiae JEDEC Solid 

State Technology Association, et al. in support of respondent 

and affirmance. Amber H. Rovner and Carmen E. Bremer

entered appearances. 

Jennifer L. Pratt, Assistant Attorney General, Attorney 

General’s Office of the State of Ohio, was on the brief for 

amici curiae State of Ohio, et al. in support of respondent. 

With her on the brief were Marc Dann, Attorney General, 

Talis J. Colberg, Attorney General, Attorney General’s Office 

of the State of Alaska, Terry Goddard, Attorney General, 

Attorney General’s Office of the State of Arizona, Dustin 

McDaniel, Attorney General, Attorney General’s Office of the 

State of Arkansas, John W. Suthers, Attorney General, 

Attorney General’s Office of the State of Colorado, Linda 

Singer, Attorney General, Attorney General’s Office of the 

District of Columbia, Bill McCollum, Attorney General, 

Attorney General’s Office of the State of Florida, Mark 

Bennett, Attorney General, Attorney General’s Office of the 

State of Hawaii, Lawrence G. Wasden, Attorney General, 

Attorney General’s Office of the State of Idaho, Lisa 

Madigan, Attorney General, Attorney General’s Office of the 

State of Illinois, Thomas J. Miller, Attorney General, Attorney 

General’s Office of the State of Iowa, Paul J. Morrison, 

Attorney General, Attorney General’s Office of the State of 

Kansas, Charles C. Foti, Jr., Attorney General, Attorney 

General’s Office of the State of Louisiana, G. Steven Rowe, 

Attorney General, Attorney General’s Office of the State of 

Maine, Douglas F. Gansler, Attorney General, Attorney 

General’s Office of the State of Maryland, Martha Coakley, 

Attorney General, Attorney General’s Office of the 
3

Commonwealth of Massachusetts, Michael A. Cox, Attorney 

General, Attorney General’s Office of the State of Michigan, 

Lori Swanson, Attorney General, Attorney General’s Office of 

the State of Minnesota, Jeremiah W. (Jay) Nixon, Attorney 

General, Attorney General’s Office of the State of Missouri, 

Catherine Cortez Masto, Attorney General, Attorney 

General’s Office of the State of Nevada, Anne Milgram, 

Attorney General, Attorney General’s Office of the State of 

New Jersey, Gary King, Attorney General, Attorney General’s 

Office of the State of New Mexico, Andrew M. Cuomo, 

Attorney General, Attorney General’s Office of the State of 

New York, W.A. Drew Edmondson, Attorney General, 

Attorney General’s Office of the State of Oklahoma, Hardy 

Myers, Attorney General, Attorney General’s Office of the 

State of Oregon, Roberto J. Sánchez Ramos, Attorney 

General, Attorney General’s Office of the Commonwealth of 

Puerto Rico, Lawrence E. Long, Attorney General, Attorney 

General’s Office of the State of South Dakota, Mark L. 

Shurtleff, Attorney General, Attorney General’s Office of the 

State of Utah, William H. Sorrell, Attorney General, Attorney 

General’s Office of the State of Vermont, Robert M. 

McKenna, Attorney General, Attorney General’s Office of the 

State of Washington, Darrell V. McGraw, Jr., Attorney 

General, Attorney General’s Office of the State of West 

Virginia, and Arthur Ripley, Jr., Attorney General, Attorney 

General’s Office of the American Samoa Government. 

Bennett Rushkoff, Assistant Attorney General, Attorney 

General’s Office of the District of Columbia, entered an 

appearance. 

Before: HENDERSON and RANDOLPH, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 
4

WILLIAMS, Senior Circuit Judge: Rambus Inc. develops 

computer memory technologies, secures intellectual property 

rights over them, and then licenses them to manufacturers in 

exchange for royalty payments. In 1990, Rambus’s founders 

filed a patent application claiming the invention of a faster 

architecture for dynamic random access memory (“DRAM”). 

In recent years, Rambus has asserted that patents issued to 

protect its invention cover four technologies that a private 

standard-setting organization (“SSO”) included in DRAM 

industry standards. 

Before an SSO adopts a standard, there is often vigorous 

competition among different technologies for incorporation 

into that standard. After standardization, however, the 

dynamic typically shifts, as industry members begin adhering 

to the standard and the standardized features start to dominate. 

In this case, 90% of DRAM production is compliant with the 

standards at issue, and therefore the technologies adopted in 

those standards—including those over which Rambus claims 

patent rights—enjoy a similar level of dominance over their 

alternatives. 

After lengthy proceedings, the Federal Trade 

Commission determined that Rambus, while participating in 

the standard-setting process, deceptively failed to disclose to 

the SSO the patent interests it held in four technologies that 

were standardized. Those interests ranged from issued 

patents, to pending patent applications, to plans to amend 

those patent applications to add new claims; Rambus’s patent 

rights in all these interests are said to be sufficiently 

connected to the invention described in Rambus’s original 

1990 application that its rights would relate back to its date. 

Commission Br. at 46-47; Transcript of Oral Argument at 35-

36; see also 35 U.S.C. §§ 120, 132. Finding this conduct 

monopolistic and in violation of § 2 of the Sherman Act, 15 

U.S.C. § 2, the Commission went on to hold that Rambus had 
5

engaged in an unfair method of competition and unfair or 

deceptive acts or practices prohibited by § 5(a) of the Federal 

Trade Commission Act (“FTC Act”), id. § 45(a). 

Rambus petitions for review. We grant the petition, 

holding that the Commission failed to sustain its allegation of 

monopolization. Its factual conclusion was that Rambus’s 

alleged deception enabled it either to acquire a monopoly 

through the standardization of its patented technologies rather 

than possible alternatives, or to avoid limits on its patent 

licensing fees that the SSO would have imposed as part of its 

normal process of standardizing patented technologies. But 

the latter—deceit merely enabling a monopolist to charge 

higher prices than it otherwise could have charged—would 

not in itself constitute monopolization. We also address 

whether there is substantial evidence that Rambus engaged in 

deceptive conduct at all, and express our serious concerns 

about the sufficiency of the evidence on two particular points. 

* * * 

During the early 1990s, the computer hardware industry 

faced a “memory bottleneck”: the development of faster 

memory lagged behind the development of faster central 

processing units, and this risked limiting future gains in 

overall computer performance. To address this problem, 

Michael Farmwald and Mark Horowitz began collaborating 

during the late 1980s and invented a higher-performance 

DRAM architecture. Together, they founded Rambus in 

March 1990 and filed Patent Application No. 07/510,898 

(“the ’898 application”) on April 18, 1990. 

As originally filed, the ’898 application included a 62-

page written description of Farmwald and Horowitz’s 

invention, 150 claims, and 15 technical drawings. Under the 
6

direction of the Patent Office, acting pursuant to 35 U.S.C. 

§ 121, Rambus effectively split the application into several 

(the original one and 10 “divisionals”). Thereafter, Rambus 

amended some of these applications and filed additional 

continuation and divisional applications.

While Rambus was developing a patent portfolio based 

on its founders’ inventions, the computer memory industry 

was at work standardizing DRAM technologies. The locus of 

those efforts was the Joint Electron Device Engineering 

Council (“JEDEC”)—then an “activity” of what is now called 

the Electronics Industries Alliance (“EIA”) and, since 2000, a 

trade association affiliated with EIA and known as the JEDEC 

Solid State Technology Association. Any company involved 

in the solid state products industry could join JEDEC by 

submitting an application and paying annual dues, and 

members could receive JEDEC mailings, participate in 

JEDEC committees, and vote on pending matters. 

One JEDEC committee, JC 42.3, developed standards for 

computer memory products. Rambus attended its first JC 42.3 

meeting as a guest in December 1991 and began formally 

participating when it joined JEDEC in February 1992. At the 

time, JC 42.3 was at work on what became JEDEC’s 

synchronous DRAM (“SDRAM”) standard. The committee 

voted to approve the completed standard in March 1993, and 

JEDEC’s governing body gave its final approval on May 24, 

1993. The SDRAM standard includes two of the four 

technologies over which Rambus asserts patent rights—

programmable CAS latency and programmable burst length. 

Despite SDRAM’s standardization, its manufacture 

increased very slowly and asynchronous DRAM continued to 

dominate the computer memory market, so JC 42.3 began to 

consider a number of possible responses—among them 

specifications it could include in a next-generation SDRAM 
7

standard. As part of that process, JC 42.3 members received a 

survey ballot in October 1995 soliciting their opinions on 

features of an advanced SDRAM—which ultimately emerged 

as the double data rate (“DDR”) SDRAM standard. Among 

the features voted on were the other two technologies at issue 

here: on-chip phase lock and delay lock loops (“on-chip 

PLL/DLL”) and dual-edge clocking. The Committee tallied 

and discussed the survey results at its December 1995 

meeting, which was Rambus’s last as a JEDEC member. 

Rambus formally withdrew from JEDEC by letter dated June 

17, 1996, saying (among other things) that the terms on which 

it proposed to license its proprietary technology “may not be 

consistent with the terms set by standards bodies, including 

JEDEC.” Complaint Counsel’s Exhibit (“CX”) 887. 

JC 42.3’s work continued after Rambus’s departure. In 

March 1998 the committee adopted the DDR SDRAM 

standard, and the JEDEC Board of Directors approved it in 

1999. This standard retained SDRAM features including 

programmable CAS latency and programmable burst length, 

and it added on-chip PLL/DLL and dual-edge clocking; DDR 

SDRAM, therefore, included all four of the technologies at 

issue here. 

Starting in 1999, Rambus informed major DRAM and 

chipset manufacturers that it held patent rights over 

technologies included in JEDEC’s SDRAM and DDR 

SDRAM standards, and that the continued manufacture, sale, 

or use of products compliant with those standards infringed its 

rights. It invited the manufacturers to resolve the alleged 

infringement through licensing negotiations. A number of 

manufacturers agreed to licenses, see Opinion of the 

Commission (“Liability Op.”), In re Rambus, Docket No. 

9302, at 48 n.262 (July 31, 2006) (discussing cases); others 

did not, and litigation ensued, see id. at 17-21. 
8

On June 18, 2002, the Federal Trade Commission filed a 

complaint under § 5(b) of the FTC Act, 15 U.S.C. § 45(b), 

charging that Rambus engaged in unfair methods of 

competition and unfair or deceptive acts or practices in 

violation of the Act, see id. § 45(a). Specifically, the 

Commission alleged that Rambus breached JEDEC policies 

requiring it to disclose patent interests related to 

standardization efforts and that the disclosures it did make 

were misleading. By this deceptive conduct, it said, Rambus 

unlawfully monopolized four technology markets in which its 

patented technologies compete with alternative innovations to 

address technical issues relating to DRAM design—markets 

for latency, burst length, data acceleration, and clock 

synchronization technologies. Compl. at 1-2, 28-29 (June 18, 

2002); see also Liability Op. at 5. 

 Proceedings began before an administrative law judge, 

who in due course dismissed the Complaint in its entirety. 

Initial Decision (“ALJ Op.”) at 334 (Feb. 23, 2004). He 

concluded that Rambus did not impermissibly withhold 

material information about its intellectual property, id. at 260-

86, and that, in any event, there was insufficient evidence that, 

if Rambus had disclosed all the information allegedly required 

of it, JEDEC would have standardized an alternative 

technology, id. at 310-23. 

Complaint Counsel appealed the ALJ’s Initial Decision to 

the Commission, which reopened the record to receive 

additional evidence and did its own plenary review. See 

Liability Op. at 17, 21. On July 31, 2006 the Commission 

vacated the ALJ’s decision and set aside his findings of fact 

and conclusions of law. Id. at 21. The Commission found 

that while JEDEC’s patent disclosure policies were “not a 

model of clarity,” id. at 52, members expected one another to 

disclose patents and patent applications that were relevant to 

technologies being considered for standardization, plus
9

(though the Commission was far less clear on these latter 

items) planned amendments to pending applications or 

“anything they’re working on that they potentially wanted to 

protect with patents down the road,” id. at 56; see generally 

id. at 51-59, 66. Based on this interpretation of JEDEC’s 

disclosure requirements, the Commission held that Rambus 

willfully and intentionally engaged in misrepresentations, 

omissions, and other practices that misled JEDEC members 

about intellectual property information “highly material” to 

the standard-setting process. Id. at 68; see also id. at 37-48 

(outlining Rambus’s “Chronology of Concealment”). 

The Commission focused entirely on the allegation of 

monopolization. See id. at 27 n.124. In particular, the 

Commission held that the evidence and inferences from 

Rambus’s purpose demonstrated that “but for Rambus’s 

deceptive course of conduct, JEDEC either would have 

excluded Rambus’s patented technologies from the JEDEC 

DRAM standards, or would have demanded RAND 

assurances [i.e., assurances of “reasonable and nondiscriminatory” license fees], with an opportunity for ex ante

licensing negotiations.” Id. at 74; see also id. at 77, 118-19. 

Rejecting Rambus’s argument that factors other than JEDEC’s 

standards allowed Rambus’s technologies to dominate their 

respective markets, id. at 79-96, the Commission concluded 

that Rambus’s deception of JEDEC “significantly contributed 

to its acquisition of monopoly power,” id. at 118. 

After additional briefing by the parties, see id. at 119-20, 

the Commission rendered a separate remedial opinion and 

final order. Opinion of the Commission on Remedy 

(“Remedy Op.”) (Feb. 2, 2007); Final Order (Feb. 2, 2007). It 

held that it had the authority in principle to order compulsory 

licensing, but that remedies beyond injunctions against future 

anticompetitive conduct would require stronger proof that 

they were necessary to restore competitive conditions. 
10

Remedy Op. at 2-11. Applying that more demanding burden 

to Complaint Counsel’s claims for relief, the Commission 

refused to compel Rambus to license its relevant patents 

royalty-free because there was insufficient evidence that 

“absent Rambus’s deception” JEDEC would have 

standardized non-proprietary technologies instead of 

Rambus’s; thus, Complaint Counsel had failed to show that 

such a remedy was “necessary to restore competition that 

would have existed in the ‘but for’ world.” Id. at 12; see also 

id. at 13, 16. Instead, the Commission decided to compel 

licensing at “reasonable royalty rates,” which it calculated 

based on what it believed would have resulted from 

negotiations between Rambus and manufacturers before 

JEDEC committed to the standards. Id. at 16-25. The 

Commission’s order limits Rambus’s royalties for three years 

to 0.25% for JEDEC-compliant SDRAM and 0.5% for 

JEDEC-compliant DDR SDRAM (with double those royalties 

for certain JEDEC-compliant, non-DRAM products); after 

those three years, it forbids any royalty collection. Final 

Order at 2-4; Remedy Op. at 22-23. 

Rambus moved for reconsideration, and the Commission 

denied the motion in relevant part on April 27, 2007. Rambus 

timely petitioned for our review of both the Commission’s 

Final Order and its Denial of Reconsideration, see 15 U.S.C. 

§ 45(c), and we consolidated those petitions. 

 Rambus challenges the Commission’s determination that 

it engaged in unlawful monopolization—and thereby violated 

§ 5 of the FTC Act—on a variety of grounds, of which two 

are most prominent. First, it argues that the Commission 

erred in finding that it violated any JEDEC patent disclosure 

rules and thus that it breached any antitrust duty to provide 

information to its rivals. Second, it asserts that even if its 

nondisclosure contravened JEDEC’s policies, the Commission 

found the consequences of such nondisclosure only in the 
11

alternative: that it prevented JEDEC either from adopting a 

non-proprietary standard, or from extracting a RAND 

commitment from Rambus when standardizing its technology. 

As the latter would not involve an antitrust violation, says 

Rambus, there is an insufficient basis for liability.

We find the second of these arguments to be persuasive, 

and conclude that the Commission failed to demonstrate that 

Rambus’s conduct was exclusionary under settled principles 

of antitrust law. Given that conclusion, we need not dwell 

very long on the substantiality of the evidence, which we 

address only to express our serious concerns about the breadth 

the Commission ascribed to JEDEC’s disclosure policies and 

their relation to what Rambus did or did not disclose. 

* * * 

In this case under § 5 of the FTC Act, the Commission 

expressly limited its theory of liability to Rambus’s unlawful 

monopolization of four markets in violation of § 2 of the 

Sherman Act, 15 U.S.C. § 2. See Liability Op. at 27 n.124; 

see also FTC v. Cement Inst., 333 U.S. 683, 694 (1948) (§ 5 

reaches all conduct that violates § 2 of the Sherman Act). 

Therefore, we apply principles of antitrust law developed 

under the Sherman Act, and we review the Commission’s 

construction and application of the antitrust laws de novo. 

FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 454 (1986); 

Polygram Holding, Inc. v. FTC, 416 F.3d 29, 33 (D.C. Cir. 

2005). 

It is settled law that the mere existence of a monopoly 

does not violate the Sherman Act. See Verizon Commc’ns, 

Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 

407 (2004); United States v. Microsoft Corp., 253 F.3d 34, 58 

(D.C. Cir. 2001) (en banc) (per curiam). In addition to “the 
12

possession of monopoly power in the relevant market,” the 

offense of monopolization requires “‘the willful acquisition or 

maintenance of that power as distinguished from growth or 

development as a consequence of a superior product, business 

acumen, or historical accident.’” Trinko, 540 U.S. at 407 

(quoting United States v. Grinnell Corp., 384 U.S. 563, 570-

71 (1966)); Microsoft, 253 F.3d at 50 (same). In this case, 

Rambus does not dispute the nature of the relevant markets or 

that its patent rights in the four relevant technologies give it 

monopoly power in each of those markets. See Liability Op. 

at 72-73. The critical question is whether Rambus engaged in 

exclusionary conduct, and thereby acquired its monopoly 

power in the relevant markets unlawfully. 

To answer that question, we adhere to two antitrust 

principles that guided us in Microsoft. First, “to be 

condemned as exclusionary, a monopolist’s act must have 

‘anticompetitive effect.’ That is, it must harm the competitive 

process and thereby harm consumers. In contrast, harm to 

one or more competitors will not suffice.” Microsoft, 253 

F.3d at 58; see also Trinko, 540 U.S. at 407; Brooke Group 

Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 

224 (1993); Covad Commc’ns. Co. v. Bell Atlantic Corp., 398 

F.3d 666, 672 (D.C. Cir. 2005). Second, it is the antitrust 

plaintiff—including the Government as plaintiff—that bears 

the burden of proving the anticompetitive effect of the 

monopolist’s conduct. Microsoft, 253 F.3d at 58-59. 

The Commission held that Rambus engaged in 

exclusionary conduct consisting of misrepresentations, 

omissions, and other practices that deceived JEDEC about the 

nature and scope of its patent interests while the organization 

standardized technologies covered by those interests. 

Liability Op. at 28, 68. Had Rambus fully disclosed its 

intellectual property, “JEDEC either would have excluded 

Rambus’s patented technologies from the JEDEC DRAM 
13

standards, or would have demanded RAND assurances, with 

an opportunity for ex ante licensing negotiations.” Liability 

Op. at 74. But the Commission did not determine that one or 

the other of these two possible outcomes was the more likely. 

See Transcript of Oral Argument at 43 (Commission’s 

counsel confirming that the Commission was unable to decide 

which of the two possible outcomes would have occurred had 

Rambus disclosed). The Commission’s conclusion that 

Rambus’s conduct was exclusionary depends, therefore, on a 

syllogism: Rambus avoided one of two outcomes by not 

disclosing its patent interests; the avoidance of either of those 

outcomes was anticompetitive; therefore Rambus’s 

nondisclosure was anticompetitive. 

We assume without deciding that avoidance of the first of 

these possible outcomes was indeed anticompetitive; that is, 

that if Rambus’s more complete disclosure would have caused 

JEDEC to adopt a different (open, non-proprietary) standard, 

then its failure to disclose harmed competition and would 

support a monopolization claim. But while we can assume 

that Rambus’s nondisclosure made the adoption of its 

technologies somewhat more likely than broad disclosure 

would have, the Commission made clear in its remedial 

opinion that there was insufficient evidence that JEDEC 

would have standardized other technologies had it known the 

full scope of Rambus’s intellectual property. See Remedy Op. 

12. Therefore, for the Commission’s syllogism to survive—

and for the Commission to have carried its burden of proving 

that Rambus’s conduct had an anticompetitive effect—we 

must also be convinced that if Rambus’s conduct merely 

enabled it to avoid the other possible outcome, namely 

JEDEC’s obtaining assurances from Rambus of RAND 

licensing terms, such conduct, alone, could be said to harm 

competition. Cf. Avins v. White, 627 F.2d 637, 646 (3d Cir. 

1980) (“Where . . . a general verdict may rest on either of two 

claims—one supported by the evidence and the other not—a 
14

judgment thereon must be reversed.” (quoting Allbergo v. 

Reading Co., 372 F.2d 83, 86 (3d Cir. 1966))). We are not 

convinced. 

Deceptive conduct—like any other kind—must have an 

anticompetitive effect in order to form the basis of a 

monopolization claim. “Even an act of pure malice by one 

business competitor against another does not, without more, 

state a claim under the federal antitrust laws,” without proof 

of “a dangerous probability that [the defendant] would 

monopolize a particular market.” Brooke Group, 509 U.S. at 

225. Even if deception raises the price secured by a seller, but 

does so without harming competition, it is beyond the antitrust 

laws’ reach. Cases that recognize deception as exclusionary 

hinge, therefore, on whether the conduct impaired rivals in a 

manner tending to bring about or protect a defendant’s 

monopoly power. In Microsoft, for example, we found 

Microsoft engaged in anticompetitive conduct when it tricked 

independent software developers into believing that its 

software development tools could be used to design crossplatform Java applications when, in fact, they produced 

Windows-specific ones. The deceit had caused “developers 

who were opting for portability over performance . . . 

unwittingly [to write] Java applications that [ran] only on 

Windows.” 253 F.3d at 76. The focus of our antitrust 

scrutiny, therefore, was properly placed on the resulting harms 

to competition rather than the deception itself. 

 Another case of deception with an anticompetitive 

dimension is Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768 

(6th Cir. 2001), where the Sixth Circuit found that U.S. 

Tobacco’s dominance of the moist snuff market caused 

retailers to rely on it as a “category manager” that would 

provide trusted guidance on the sales strategy and in-store 

display for all moist snuff products, id. at 773-78. Under 

those circumstances, the court held that its misrepresentations 
15

to retailers about the sales strength of its products versus its 

competitors’ strength reduced competition in the monopolized 

market by increasing the display space devoted to U.S. 

Tobacco’s products and decreasing that allotted to competing 

products. Id. at 783, 785-88, 790-91; see also LePage’s Inc. v. 

3M, 324 F.3d 141, 153 (3d Cir. 2003) (calling Conwood “a 

good illustration of the type of exclusionary conduct that will 

support a § 2 violation”). 

But an otherwise lawful monopolist’s use of deception 

simply to obtain higher prices normally has no particular 

tendency to exclude rivals and thus to diminish competition. 

Consider, for example, NYNEX Corp. v. Discon, Inc., 525 

U.S. 128 (1998), in which the Court addressed the antitrust 

implications of allegations that NYNEX’s subsidiary, New 

York Telephone Company, a lawful monopoly provider of 

local telephone services, charged its customers higher prices 

as result of fraudulent conduct in the market for the service of 

removing outdated telephone switching equipment (called 

“removal services”). Discon had alleged that New York 

Telephone (through its corporate affiliate, Materiel 

Enterprises) switched its purchases of removal services from 

Discon to a higher-priced independent firm (AT&T 

Technologies). Materiel Enterprises would pass the higher 

fees on to New York Telephone, which in turn passed them on 

to customers through higher rates approved by regulators. Id.

at 131-32. The nub of the deception, Discon alleged, was that 

AT&T Technologies would provide Materiel Enterprises with 

a special rebate at year’s end, which it would then share with 

NYNEX. Id. By thus hoodwinking the regulators, the scam 

raised prices for consumers; Discon, which refused to play the 

rebate game, was driven out of business.1

 Discon alleged that 

 

1

 The scheme alleged by Discon is a spin on a familiar 

problem of cost-based price regulation—its tendency to dilute a 
16

this arrangement was anticompetitive and constituted both an 

agreement in restraint of trade in violation of § 1 of the 

Sherman Act and a conspiracy to monopolize the market for 

removal services in violation of § 2. Id. at 132. 

As to Discon’s § 1 claim, the Court held that where a 

single buyer favors one supplier over another for an improper 

reason, the plaintiff must “allege and prove harm, not just to a 

single competitor, but to the competitive process.” Id. at 135; 

see generally id. at 133-37. Nor, as Justice Breyer wrote for a 

unanimous Court, would harm to the consumers in the form of 

higher prices change the matter: “We concede Discon’s claim 

that the [defendants’] behavior hurt consumers by raising 

telephone service rates. But that consumer injury naturally 

flowed not so much from a less competitive market for 

removal services, as from the exercise of market power that is 

lawfully in the hands of a monopolist, namely, New York 

Telephone, combined with a deception worked upon the 

regulatory agency that prevented the agency from controlling 

 

monopolist’s incentive to seek the best price for inputs. Even 

where it cannot channel above-market prices to itself (either by 

corporate affiliation or, as here, by rebates and affiliation), 

regulation will have been holding the monopolist’s selling prices 

below profit-maximizing rates, and it can therefore raise them 

without loss of net revenue. Where, as here, the input charges are 

being flowed back to the regulated monopolist (or its affiliate), 

payment of above-market prices even provides a profit opportunity, 

as it more than recovers the artificial hike in input prices (via 

increased final prices and flowback of the input prices). See IIIA 

Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An 

Analysis of Antitrust Principles and Their Application ¶ 787b, at 

295-301 (2d ed. 2002); see also Assoc. Gas Dist. v. FERC, 824 F.2d 

981, 995 (D.C. Cir. 1987); cf. Nat’l Rural Telecom Ass’n v. FCC, 

988 F.2d 174, 178 (D.C. Cir. 1993).
17

New York Telephone’s exercise of its monopoly power.” Id.

at 136. 

Because Discon based its § 2 claim on the very same 

allegations of fraud, the Court vacated the appellate court’s 

decision to uphold that claim because “[u]nless those 

agreements harmed the competitive process, they did not 

amount to a conspiracy to monopolize.” Id. at 139; see also 

Forsyth v. Humana, Inc., 114 F.3d 1467, 1477-78 (9th Cir. 

1997) (rejecting a claim that an insurance company’s alleged 

kickback scheme caused antitrust injury to group health 

insurance customers where the evidence showed the scheme 

caused higher copayments and premium payments, but did 

“not explain how the scheme reduced competition in the 

relevant market”), aff’d on other grounds, 525 U.S. 299 

(1999); Schuylkill Energy Res., Inc. v. Penn. Power & Light 

Co., 113 F.3d 405, 414 (3d Cir. 1997) (finding conduct did 

not violate antitrust laws where absent that conduct consumers 

would still receive the same product and the same amount of 

competition).

While the Commission’s brief doesn’t mention NYNEX, 

much less try to distinguish it, it does cite Broadcom Corp. v. 

Qualcomm Inc., 501 F.3d 297 (3d Cir. 2007), which in turn 

had cited the Commission’s own “landmark” decision in the 

case under review here, id. at 311. There the court held that a 

patent holder’s intentionally false promise to a standardsetting organization that it would license its technology on 

RAND terms, “coupled with [the organization’s] reliance on 

that promise when including the technology in a standard,” 

was anticompetitive conduct, on the ground that it increased 

“the likelihood that patent rights will confer monopoly power 

on the patent holder.” Id. at 314; accord id. at 315-16. To the 

extent that the ruling (which simply reversed a grant of 

dismissal) rested on the argument that deceit lured the SSO 

away from non-proprietary technology, see id., it cannot help 
18

the Commission in view of its inability to find that Rambus’s 

behavior caused JEDEC’s choice; to the extent that it may 

have rested on a supposition that there is a cognizable 

violation of the Sherman Act when a lawful monopolist’s 

deceit has the effect of raising prices (without an effect on 

competitive structure), it conflicts with NYNEX. 

Here, the Commission expressly left open the likelihood 

that JEDEC would have standardized Rambus’s technologies 

even if Rambus had disclosed its intellectual property. Under 

this hypothesis, JEDEC lost only an opportunity to secure a 

RAND commitment from Rambus. But loss of such a 

commitment is not a harm to competition from alternative 

technologies in the relevant markets. See 2 Hovenkamp et al., 

IP & Antitrust § 35.5 at 35-45 (Supp. 2008) [hereinafter “IP & 

Antitrust”] (“[A]n antitrust plaintiff must establish that the 

standard-setting organization would not have adopted the 

standard in question but for the misrepresentation or 

omission.”). Indeed, had JEDEC limited Rambus to 

reasonable royalties and required it to provide licenses on a 

nondiscriminatory basis, we would expect less competition 

from alternative technologies, not more; high prices and 

constrained output tend to attract competitors, not to repel 

them. 

Scholars in the field have urged that if nondisclosure to 

an SSO enables a participant to obtain higher royalties than 

would otherwise have been attainable, the “overcharge can 

properly constitute competitive harm attributable to the 

nondisclosure,” as the overcharge “will distort competition in 

the downstream market.” 2 IP & Antitrust § 35.5 at 35-47. 

The contention that price-raising deception has downstream 

effects is surely correct, but that consequence was equally 

surely true in NYNEX (though perhaps on a smaller scale) and 

equally obvious to the Court. The Commission makes the 

related contention that because the ability to profitably restrict 
19

output and set supracompetitive prices is the sine qua non of 

monopoly power, any conduct that permits a monopolist to 

avoid constraints on the exercise of that power must be 

anticompetitive. But again, as in NYNEX, an otherwise lawful 

monopolist’s end-run around price constraints, even when 

deceptive or fraudulent, does not alone present a harm to 

competition in the monopolized market. 

Thus, if JEDEC, in the world that would have existed but 

for Rambus’s deception, would have standardized the very 

same technologies, Rambus’s alleged deception cannot be 

said to have had an effect on competition in violation of the 

antitrust laws; JEDEC’s loss of an opportunity to seek 

favorable licensing terms is not as such an antitrust harm. Yet 

the Commission did not reject this as being a possible—

perhaps even the more probable—effect of Rambus’s conduct. 

We hold, therefore, that the Commission failed to demonstrate 

that Rambus’s conduct was exclusionary, and thus to establish 

its claim that Rambus unlawfully monopolized the relevant 

markets. 

* * * 

Our conclusion that the Commission failed to 

demonstrate that Rambus inflicted any harm on competition 

requires vacatur of the Commission’s orders. But the original 

complaint also included a count charging Rambus with other 

unfair methods of competition in violation of § 5(a) of the 

FTC Act, 15 U.S.C. § 45(a). See Compl. at 32 ¶ 124. While 

the Commission dropped this aspect of its case and focused on 

a theory of liability premised on unlawful monopolization, see 

Liability Op. at 27 n.124, at least one Commissioner 

suggested that a “stand-alone” § 5 action would have had a 

“broader province” than a Sherman Act case. See Concurring 

Opinion of Commissioner Jon Leibowitz at 18, 21, Docket 

No. 9302 (Jul. 31, 2006). Because of the chance of further 
20

proceedings on remand, we express briefly our serious 

concerns about strength of the evidence relied on to support 

some of the Commission’s crucial findings regarding the 

scope of JEDEC’s patent disclosure policies and Rambus’s 

alleged violation of those policies. 

In noting our concerns, we recognize, of course, that the 

Commission’s findings are conclusive so long as they are 

supported by substantial evidence. See 15 U.S.C. § 45(c); see 

also Polygram Holding, 416 F.3d at 33. The Commission’s 

findings are murky on both the relevant margins: what 

JEDEC’s disclosure policies were, and what, within those 

mandates, Rambus failed to disclose. 

First, the Commission evidently could find that Rambus 

violated JEDEC’s disclosure policies only by relying quite 

significantly on participants’ having been obliged to disclose 

their work in progress on potential amendments to pending 

applications, as that work became pertinent. The 

Commission’s counsel confirmed as much at oral argument. 

Transcript of Oral Argument at 37-38. Indeed, the parties 

stipulated that as of Rambus’s last JEDEC meeting it held no 

patents that were essential to the manufacture or use of 

devices complying with any JEDEC standard, and that when 

JEDEC issued the SDRAM standard Rambus had no pending 

patent claims that would necessarily have been infringed by a 

device compliant with that standard. Parties’ First Set of 

Stipulations ¶¶ 9-10. 

The case appears (and we emphasize appears, as the 

Commission’s opinion leaves us uncertain of its real view) to 

turn on the idea that JEDEC participants were obliged to 

disclose not merely relevant patents and patent applications, 

but also their work in progress on amendments to pending 

applications that included new patent claims. We do not see 

in the record any formal finding that the policies were so 
21

broad, but the Commission’s opinion points to testimony of 

witnesses that might be the basis of such a finding. Five 

former JC 42.3 participants testified (in some cases 

ambiguously) that they understood JEDEC’s written policies, 

requiring the disclosure of pending applications, to also 

include a duty to disclose work in progress on unfiled

amendments to those applications, and JEDEC’s general 

counsel testified that he believed a firm was required to 

disclose plans to amend if supported by the firm’s current 

interpretation of an extant application. See Liability Op. at 56 

& nn.303-05. JEDEC participants did not have unanimous 

recollections on this point, however, and the Commission 

noted that another JC 42.3 member testified that there was no 

duty to disclose work on future filings. Id. at 56 n.305. 

Reading these statements as interpretations of JEDEC’s 

written policies seems to significantly stretch the policies’ 

language. The most disclosure-friendly of those policies is 

JEDEC Manual No. 21-I, published in October 1993, which 

refers to “the obligation of all participants to inform the 

meeting of any knowledge they may have of any patents, or 

pending patents, that might be involved in the work they are 

undertaking.” CX 208 at 19; see also id. at 19 n.** (“For the 

purpose of this policy, the word ‘patented’ also includes items 

and processes for which a patent has been applied and may be 

pending.”), 27 (referring to “technical information covered 

by [a] patent or pending patent”).2

 This language speaks 

 

2

 Rambus notes that Manual 21-I was only adopted after

JEDEC approved the SDRAM standard; the Manual came in 

October 1993 after JC 42.3 approved the SDRAM standard in 

March 1993 and JEDEC’s governing body adopted it that May. But 

we will assume arguendo that the Commission could reasonably 

find that this new policy language merely formalized a preexisting 

understanding. 
22

fairly clearly of disclosure obligations related to patents and 

pending patent applications, but says nothing of unfiled work 

in progress on potential amendments to patent applications. 

We don’t see how a few strands of trial testimony would 

persuade the Commission to read this language more broadly, 

especially as at least two of the five participants cited merely 

stated that disclosure obligations reached anything in the 

patent “process”—which leaves open the question of when 

that “process” can be said to begin. See Joint Appendix 1908-

09 (testimony of Desi Rhoden); id. at 2038 (testimony of Brett 

Williams). 

Alternatively, to the extent the Commission reads this 

testimony not to broaden the interpretation of Manual 21-I, 

but rather to provide evidence of disclosure expectations that 

extended beyond those incorporated into written policies, a 

different problem may arise. As the Federal Circuit has said, 

JEDEC’s patent disclosure policies suffered from “a 

staggering lack of defining details.” Rambus Inc. v. Infineon 

Technologies AG, 318 F.3d 1081, 1102 (Fed. Cir. 2003); see 

also Liability Op. at 52 (stating that the record shows that 

JEDEC’s patent policies “are not a model of clarity”). Even 

assuming that any evidence of unwritten disclosure 

expectations would survive a possible narrowing effect based 

upon the written directive of Manual 21-I, the vagueness of 

any such expectations would nonetheless remain an obstacle. 

One would expect that disclosure expectations ostensibly 

requiring competitors to share information that they would 

otherwise vigorously protect as trade secrets would provide 

“clear guidance” and “define clearly what, when, how, and to 

whom the members must disclose.” Infineon, 318 F.3d at 

1102. This need for clarity seems especially acute where 

disclosure of those trade secrets itself implicates antitrust 

concerns; JEDEC involved, after all, collaboration by 

competitors. Cf. Allied Tube & Conduit Corp. v. Indian 

Head, Inc., 486 U.S. 492, 500 (1988) (stating that because 
23

SSO members have incentives to restrain competition, such 

organizations “have traditionally been objects of antitrust 

scrutiny”); Am Soc’y of Mech. Eng’rs v. Hydrolevel Corp., 

456 U.S. 556, 571 (1982) (noting that SSOs are “rife with 

opportunities for anticompetitive activity”). In any event, the 

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. See 2 IP & 

Antitrust § 35.5 at 35-51 (“[A]lthough antitrust can serve as a 

useful check on abuses of the standard-setting process, it 

cannot substitute for a general enforcement regime for 

disclosure rules.”). 

The Commission’s conclusion that Rambus engaged in 

deceptive conduct affecting the inclusion of on-chip PLL/DLL 

and dual-edge clocking in the DDR SDRAM standard, which 

JEDEC adopted more than two years after Rambus’s last JC 

42.3 meeting, presents an additional, independent concern. 

To support this conclusion, the Commission looked to a 

technical presentation made to JC 42.3 in September 1994, 

and the survey balloting of that committee in October 1995 on 

whether to proceed with the consideration of particular 

features (including the two Rambus technologies ultimately 

adopted), finding that Rambus deliberately failed to disclose 

patent interests in any of the named technologies. Liability 

Op. 42-44. This finding is evidently the basis, so far as DDR 

SDRAM is concerned, of its conclusion that Rambus breached 

a duty to disclose. Id. at 66-68. 

Once again, the Commission has taken an aggressive 

interpretation of rather weak evidence. For example, the 

October 1995 survey ballot gauged participant interest in a 

range of technologies and did not ask those surveyed about 

their intellectual property (as did the more formal ballots on 

proposed standards). See CX 260. The Commission 

nonetheless believes that every member of JC 42.3—
24

membership that included most of the DRAM industry—was 

duty-bound to disclose any potential patents they were 

working on that related to any of the questions posed by the 

survey. The record shows, however, that the only company 

that made a disclosure at the next meeting was the one that 

formally presented the survey results. See Liability Op. at 44-

45; ALJ Op. at 58 ¶ 401 (citing Joint Exhibit 28, at 6). For 

reasons similar to those that make vague but broad disclosure 

obligations among competitors unlikely, it seems to us 

unlikely that JEDEC participants placed themselves under 

such a sweeping and early duty to disclose, triggered by the 

mere chance that a technology might someday (in this case, 

more than two years later) be formally proposed for 

standardization. 

* * * 

 We set aside the Commission’s orders and remand for 

further proceedings consistent with this opinion.

So ordered.