Ruling Relief Sparks Rambus Shares

Once the standards were ratified by the group, Rambus revealed its patents by filing patent infringement lawsuits against various parties, according to the FTC opinion.

According to the commission, Rambus violated the Sherman Antitrust Act, as well as Section 5 of the FTC Act, regarding deceptive practices. The unanimous ruling overturned a 2004 finding by an FTC administrative law judge dismissing the charges against Rambus.

On Monday, Rambus issued a statement grousing that the FTC continued to ignore the previous "extensive findings of fact" exonerating the company by the commission's own administrative judge.

But while Rambus vowed to appeal both the liability and remedy rulings and move to stay the order, Wall Street's delivered its own verdict that the ruling represented the best possible outcome since it applied to a very limited slice of Rambus' business.

Shares of Rambus were recently up 17.8%, or $3.38, at $22.30 in midday trading Monday.

The ruling caps Rambus royalty rates for three years, after which the company's rates drop to zero. But analysts pointed out that most of the patents at issue expire in 2010 anyway.

Moreover, the decision is not retroactive, meaning that the royalty ceiling does not apply to instances of companies using the SDRAM and DDR memory technology in past years.

WR Hambreacht analyst Daniel Amir says the decision could still impact Rambus' ability to collect on past royalties, since it effectively sets a benchmark for royalty rates.

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