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EUROPEAN COMMISSION Brussels, 15.1.2010 SG-Greffe(2010) D/275 C(2010) 150 Subject: Case COMP/C-3/ 38 636 Rambus (Please quote this reference in all correspondence) […]* 1. I refer to Hynix' complaint to the Commission of 18 December 2002 lodged jointly with Infineon pursuant to Article 3 of Council Regulation No. 17/621 against Rambus Inc. ("Rambus"), an undertaking incorporated in 1990 in California and reincorporated in Delaware, USA, in 1997, with its principal place of business in Los Altos, California, regarding alleged violations of Article 101 and Article 102 of the Treaty on the Functioning of the European Union ("TFEU")2 in connection with computer memory chips which are known as synchronous DRAM chips ("the Complaint"). I also refer to the letters listed here below, by which Hynix provided additional information/explanations on the above matter, as well as the Commission’s letter of 13 October 2009 ["Article 7 letter"] addressed to Hynix in that matter and the response to the Article 7 letter of 12 November 2009. […] 2. For the reasons set out below, the Commission considers that there is no sufficient degree of Community interest for conducting a further investigation into the alleged infringement and rejects your complaint pursuant to Article 7(2) of the Commission Regulation (EC) 773/20043. * This version of the Commission Decision of 15.1.2010 does not contain any business secrets or other confidential information. 1 Regulation No. 17 of the Council of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ No. 13, 21.2.1962, p. 204). 2 With effect from 1 December 2009, Articles 81 and 82 of the EC Treaty have become Articles 101 and 102, respectively, of the TFEU; the two sets of provisions are in substance identical. For the purposes of this Decision, references to Articles 101 and 102 of the TFEU should be understood as references to Articles 81 and 82, respectively, of the EC Treaty where appropriate. 3 Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, Official Journal L 123, 27.04.2004, pages 18-24. EN EN 1. THE COMPLAINT 3. In the Complaint, you allege that Rambus infringed Article 102 TFUE. The complaint outlines that JEDEC, a US-based world-wide standard setting organisation for semiconductors, traditionally establishes “open” standards, where if a proposed standard involves a patent, a licence to use such a patent shall be available on reasonable and non- discriminatory terms ("RAND"). To achieve these goals, JEDEC adopted a patent disclosure policy. 4. The Complaint outlines that Rambus was as a member of JEDEC from 1991 to 1996. The complaint alleges that Rambus had a twofold plan: first to get its newly-developed proprietary RDRAM technology accepted as a standard and in case this plan failed, to capture the JEDEC standard and claim licence fees from all synchronous DRAM chip manufacturers. 5. The Complaint alleges that Rambus failed to disclose its relevant patent applications and patents to JEDEC depriving JEDEC of the opportunity to adopt standards clearly outside the scope of Rambus’ patents, and hence that Rambus illegitimately captured the relevant JEDEC standards. In this context, the Complaint alleges that following Rambus’ attendance at the relevant JEDEC meetings, Rambus filed continuation and divisional patent applications intending to cover features and technologies that Rambus expected to be included in the JEDEC standard. The Complaint outlines that the features which Rambus sought to cover with its patent applications were subsequently incorporated in the JEDEC standards. These standards have now been accepted industry-wide. 6. The Complaint therefore alleges that pursuant to its plan, Rambus is at present asserting its relevant patents which it claims cover the technology included in the JEDEC standards. Therefore, every manufacturer wishing to produce synchronous DRAM chips or chipsets consequently must either acquire a licence from Rambus or litigate its asserted patent rights. 7. You further allege that "[t]he members of the relevant JEDEC sub-committees intended to create open industry standards relating to SDRAM and DDR SDRAM technology. The members of the relevant sub-committees were parties to agreements to set the two standards for the purposes of Article 81(1). In reality, as a result of the matters referred to herein a closed industry standard was created. The effect of this agreement resulting in the adoption of a closed standard is anti-competitive and the agreements establishing the 4 JEDEC standards for SDRAM and DDR SDRAM are therefore caught by Article 81 (1)." 4 Submission of 18 December 2002, page 3. EN EN 8. However, in the Complaint you only provide information regarding an alleged abuse of dominant position and no information regarding the alleged infringement of Article 101 TFUE. 9. It is for the complainant to bring to the Commission's notice the matters of fact and of law underlying its complaint.5 In view of the fact that there are no indications in your Complaint of an infringement of Article101 TFUE, such as indicia of the existence of an agreement, concerted practice or a decision of an association of undertakings, a further investigation in this regard would be disproportionate given the small likelihood that an infringement of Article 101 TFUE could be established in the present case. 6 2. PROCEDURAL STEPS UNDER REGULATION (EC) NO 1/2003 10. Concerning a possible violation of Article102 TFUE, on 27 July 2007, the Commission opened proceedings and adopted a Statement of Objections setting out the Commission’s competition concerns which was notified to Rambus by letter of 30 July 2007. A non- confidential copy of the Statement of Objections was sent to Hynix on 11 September 2007. Hynix provided comments on the Statement of Objections on 22 October 2007. 11. Rambus responded to the Statement of Objections on 31 October 2007. A non- confidential copy of Rambus' response was sent to Hynix on 22 November 2007. 12. At Rambus' request, an Oral Hearing took place on 4 and 5 December 2007 where Hynix participated together with four interested third parties. 13. On 8 June 2009, Rambus submitted commitments ("the Commitments") to the Commission in response to the Statement of Objections, while disagreeing with the Commission's provisional findings. 14. On 12 June 2009, a notice was published in the Official Journal of the European Union7 pursuant to Article 27(4) of Regulation (EC) No 1/2003, summarising the case and the Commitments and inviting interested third parties to submit their observations on the Commitments within one month following publication. Hynix submitted observations on 13 July 2009. 15. On 23 July 2009, the Commission informed Rambus of the observations on the Commitments received from interested third parties following the publication of the notice. On 14 August 2009, Rambus submitted amended commitments. 5 See Joined Cases C-172/01, C-175/01, C-176/01 and C-180/01, International Power v Commission, [2003] ECR I-11421, paragraph 148. 6 OJ L 1, 4.1.2003, p.1. 7 OJ C 133, 12.6.2009, p. 16. EN EN 16. On 13 October 2009 the Commission informed Hynix of its preliminary conclusion that there is insufficient Community interest for the continuation of the investigation and its intention to reject the Complaint. Hynix submitted observations in response to the Article 7 letter on 12 November 2009. 3. ASSESSMENT 17. According to the settled case law of the Community Courts, the Commission is not required to conduct an investigation in each complaint it receives.8 The Community Courts have also recognized that the Commission has discretion in its treatment of complaints.9 In particular, the Commission is entitled to give differing degrees of priority and refer to the Community interest in order to determine the degree of priority to be applied to the various complaints brought before it.10The assessment of the Community interest raised by a complaint depends on the circumstances of each individual case. The Community Courts have recognised that the number of criteria of assessment to which the Commission may refer is not limited, nor is the Commission required to have recourse exclusively to certain criteria. Where appropriate, the Commission may give priority to a single criterion for assessing the Community interest.11 The Community Courts confirmed that "[…] the Commission may decide that it is not appropriate to investigate a complaint […] where the facts under examination give it proper cause to assume that the conduct of the undertakings concerned will be amended in a manner conducive to the general interest" and that agreements by undertakings to change the incriminated conduct may also entitle the Commission to consider that the complaint no longer raises Community interest. 12 18. In addition, under Article 9 of Regulation No 1/2003, where the undertakings concerned offer commitments to meet the concerns expressed to them by the Commission, the Commission may by decision make those commitments binding on the undertakings. Such a decision shall conclude that there are no longer grounds for action by the Commission. In such a case, a complaint will be rejected in light of the commitments accepted by the Commission. 3.1. Relevant markets 3.1.1. Product market 8 See Case T-24/90, Automec v Commission, [1992] ECR II-2223, para. 76. 9 See Cases C-119/97 P, Ufex v Commission, [1999] ECR I-1341, para. 88; T-193/02, Laurent Piau v Commission, [2005] ECR II-209, paras. 44 and 80. 10 Automec, supra, paras. 77 and 85. 11 See Case C-450/98 P, International Express Carriers Conference (IECC) v Commission, [2001] ECR I- 3947, para 59.