June 12, 2009 / 6:24 AM / 9 years ago

UPDATE 1-Rambus cuts royalties to settle EU charges

* Agrees to provide some products free,cuts cost of others

* Says U.S. court decisions showed co did nothing wrong

* EC says tentative finding was co abused dominant position

* To decide whether to adopt agreement after consultations

(Adds background, detail, no fine imposed)

By David Lawsky

SAN FRANCISCO, June 11 (Reuters) - Chip designer Rambus Inc (RMBS.O) agreed to cut its royalties in order to settle charges brought by the European Commission, Friday’s edition of the European Union Official Journal showed.

The journal, available late Thursday California time, showed Rambus agreed to provide some of its products at no cost and to lower the cost of others. No fine would be imposed under the proposed deal.

“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,” said Thomas Lavelle, general counsel of Rambus, in a statement.

Lavelle added multiple U.S. court decisions showed “we did nothing wrong.”

In contrast, the European Commission notice said its tentative finding was that Rambus was “abusing its dominant position by claiming unreasonable royalties.”

Under the settlement, neither side pushes its views but Rambus agrees to royalty rates that are acceptable to the Commission.

The Commission said it will decide whether to adopt the agreement having consulted with competitors and customers.

    Under the pact, some of Rambus’s older products will be free and other licenses for SDR memory controllers will have maximum royalty rates of 1.5 percent to 2.65 percent per unit, depending on the type. Those rates are set to drop in April, 2010.

    The rates are valid for five years once the Commission formally adopts the decision.

    In May, The U.S. Federal Trade Commission dropped its antitrust complaint against Rambus after the Supreme Court declined to hear the FTC appeal in its suit that unsuccessfully accused Rambus of “deceptive conduct.”

    Other disputes are pending in U.S. Federal courts.

    Elsewhere the San Francisco Superior Court is hearing preliminary motions in preparation for a September trial on antitrust charges brought by Rambus against Samsung Electronics (005930.KS), Hynix (000660.KS) and Micron Technology MU.N.

    Rambus, which has accused the three of illegally fixing prices, hurting the sale of DRAM computer memory chips designed by Rambus, has said it has spent $300 million on legal costs.

    Rambus shares earlier closed down 0.5 percent at $15.09, having risen during the session to their highest level since mid January -- when they plummeted after a U.S. court ruling that barred the company from enforcing patents against Micron. [ID:nN09276712] (Editing by David Holmes)

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