16 Nov 2011 Cases

Compass Lexecon Experts Testify Successfully in DRAM Suppliers' Stunning Victory in Rambus Antitrust Case

2 minute read


In a case closely watched by the high technology industry, a California jury last week rejected Rambus, Inc.'s nearly $4 billion claim, before trebling, that Micron Technology Inc. and Hynix Semiconductor Inc. conspired to block the marketplace penetration of RDRAM, Rambus's proprietary DRAM technology, in favor of an alternative technology, SDRAM, and its succeeding generations. The result, which received widespread international coverage, was a complete defense victory.

Compass Lexecon was retained separately by each of two law firms to undertake independent economic assessments and provide trial testimony regarding liability and impact on behalf of Micron and Hynix.

Robert Willig, together with a Compass Lexecon team led by Doug Fontaine, Gilad Levin, Yair Eilat, and Rebecca Schindel, was retained by counsel for Micron - Bill Price, Jon Steiger, Robert Becher, and Kevin Teruya of Quinn Emanuel Urquhart & Sullivan, LLP - to develop a thorough economic assessment of the merits of Rambus' liability and impact claims. Professor Willig and his team analyzed Rambus's allegations in a rigorous framework focused on factors necessary for the successful formation and implementation of the alleged conspiracy. In his testimony, both written and at trial, Professor Willig emphasized that economic logic and the market data show that the concerted boycott as alleged by Rambus made no economic sense. To test empirically the merits of Rambus's claim, Professor Willig and his team analyzed voluminous DRAM transactional data and devised a series of statistical tests to compare DRAM pricing across technologies, time and suppliers. Professor Willig found the results inconsistent with a concerted scheme to boycott RDRAM through manipulation of its relative prices.

Janusz Ordover, along with a Compass Lexecon team led by Jith Jayaratne, Assaf Eilat, and Brianne Limber, was retained by counsel for Hynix - Tad Allan, Kenneth Nissly, Ken O'Rourke, and Susan van Keulen of O'Melveny & Myers - to develop a comprehensive economic framework to assess the merits of Rambus' claim that Hynix acted in concert with other DRAM manufacturers to disadvantage RDRAM. Professor Ordover and his Compass Lexecon team tested Rambus' claims regarding Hynix's pricing conduct through a comprehensive analysis of the RDRAM price data on record. They developed specific tests of Rambus' claims by focusing on the rates of decline of Hynix's RDRAM prices alone and relative to the prices of other DRAM technologies. The analyses demonstrated that Hynix's conduct was inconsistent with Rambus' allegations of RDRAM price manipulations and also inconsistent more generally with the cartel alleged by Rambus. Further, Professor Ordover and his team created detailed analyses of Hynix's RDRAM pricing to a major OEM that demonstrate that Hynix's RDRAM pricing conduct was consistent with unilateral behavior. In addition, the Compass Lexecon team worked closely with Hynix's counsel to provide extensive litigation support, including analyses of the massive data on the record used by Hynix counsel to create trial graphics and to develop litigation strategy.

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