ORDER OF THE PRESIDENT OF THE SECOND CHAMBER OF THE GENERAL COURT
1 February 2012 (*)
(Intervention – Interest in the result of the case)
In Case T‑149/10,
Hynix Semiconductor, Inc., established in Gyeonggi-do (South Korea), represented by A. Woodgate and O. Heinisch, Solicitors,
applicant,
v
European Commission, represented by S. Noë, A. Antoniadis, J. Bourke and F. Castillo de la Torre, acting as Agents,
defendant,
supported by
Rambus, Inc., established in Los Altos, California (United States), represented by I. Forrester QC, J. Killick, Barrister, and P. Berghe, lawyer,
intervener,
APPLICATION for the annulment of Commission Decision C(2010) 150 of 15 January 2010 rejecting the complaint lodged by Hynix Semiconductors, Inc. against Rambus, Inc., for infringement of Articles 102 TFEU and 54 EEA,
THE PRESIDENT OF THE SECOND CHAMBER OF THE GENERAL COURT
makes the following
Order
Background to the dispute and the administrative procedure
1 Rambus, Inc. (‘Rambus’) designs and develops high bandwidth chip connection technologies for computers, consumer electronic and communication products (including systems memory, PC graphics, multimedia, workstations, video game consoles and network switches), which it also licences.
2 On 18 December 2002, the applicant, Hynix Semiconductor, Inc. (‘Hynix’), filed a complaint with the European Commission regarding Rambus, pursuant to Article 3 of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959‑1962, p. 87). In particular, it accused Rambus of charging abusive royalties for the use of certain patents for Dynamic Random Access Memory (‘DRAM’) chips. DRAM chips are a type of electronic memory primarily used in computer systems, but also used in a wide range of other products which need to temporarily store data, such as servers, workstations, printers, PDAs and cameras. According to the complainant, Rambus was engaged in intentional deceptive conduct in the standard setting procedure in relation to those chips undertaken by the American JEDEC organisation, by not disclosing the existence of the patents and patent applications which it later claimed were relevant to the adopted standard. Such behaviour is known as a ‘patent ambush’. DRAM chips which meet the JEDEC standard make up approximately 95% of the market and are used in almost all personal computers. In 2008, worldwide DRAM sales exceeded USD 34 billion (more than EUR 23 billion).
3 On 27 July 2007, the Commission initiated a procedure with a view to adopting a decision under Chapter III of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ 2003 L 1, p. 1), and it adopted a statement of objections setting out the problems in terms of competition which it had identified. In its view, that statement of objections also constitutes a preliminary assessment within the meaning of Article 9 of Regulation No 1/2003.
4 In its statement of objections, the Commission came to the provisional conclusion that, at the time it started to assert its patents, that is in January 2000, Rambus held a dominant position on the world DRAM interface technology market, which it has held ever since. The Commission also considered, first of all, that Rambus’ practice of claiming royalties from manufacturers of DRAM in conformity with industry standards, for the use of its patents, which were higher than it would have been able to claim had it not undertaken the alleged intentional deceptive conduct, was questionable in terms of its compatibility with Article 82 EC. In addition, the Commission came to the provisional conclusion that Rambus’ conduct undermined confidence in the standard-setting process given that in the sector in question an effective standard-setting process is a precondition to technical development and the development of the market in general to the benefit of consumers.
5 The statement of objections was notified to Rambus on 30 July 2007. Rambus responded to it on 31 October 2007. A hearing was held on 4 and 5 December 2007 at Rambus’ request. Five undertakings were admitted as interested third parties and submitted observations on the statement of objections.
6 On 8 June 2009, Rambus submitted to the Commission preliminary commitments in response to the allegations set out in the statement of objections (‘the initial commitments’), while disputing the provisional conclusions set out therein.
7 Rambus’ initial commitments had three sections: (i) a general section which provided for a five-year worldwide licence for future DRAM products for all of its patents; (ii) a section providing for the licensing of DRAM chips and for the maximum royalty rates to be charged; and (iii) a section providing for the licensing of memory controllers and the maximum royalty rates.
8 On 12 June 2009, a notice was published in the Official Journal of the European Union, in accordance with Article 27(4) of Regulation No 1/2003. That communication summarised the case and the initial commitments and invited interested third parties to submit their observations.
9 Among the interested third parties, Nvidia Corporation (‘Nvidia’) submitted observations to the Commission in relation to memory controllers.
10 On 23 July 2009, the Commission informed Rambus of the observations on the initial commitments received from Nvidia and other interested third parties. On 14 August 2009, Rambus submitted its revised commitments (‘revised commitments’ or ‘commitments’).
11 In its revised commitments, Rambus agreed, first, not to charge royalties for the SDRAM and DDR standards that were adopted by JEDEC during the time in which Rambus was a member and engaged in the allegedly intentional deceptive conduct. Second, Rambus committed to a maximum royalty rate of 1.5% for the later generations of standards adopted by JEDEC after Rambus’ resignation. Third, Rambus offered that maximum rate to all market participants and guaranteed that the industry would not have to pay more.
12 Nvidia requested authorisation to examine and comment on the revised commitments in so far as they concerned memory controllers but the Commission refused that request.
13 On 13 October 2009, in accordance with Article 7(1) of 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 (OJ 2004 L 123, p. 18), the Commission informed Hynix that it had adopted the preliminary position that the European Union’s degree of interest was insufficient to pursue the investigation into the alleged infringement. Hynix submitted additional comments on 12 November 2009.
14 By decision of 9 December 2009, relating to a proceeding pursuant to Articles 102 TFEU and 54 EEA (Case COMP/38.636 – Rambus), the Commission accepted and made binding Rambus’ revised commitments, in accordance with Article 9 of Regulation No 1/2003, and concluded that there were no longer grounds for action in that case (‘the decision on the commitments’).
15 By decision of 15 January 2010, the Commission rejected the complaint lodged by Hynix against Rambus, in accordance with Article 7(2) of Regulation No 1/2003 (‘the rejection decision’).
The procedure before the General Court
16 By application lodged at the Registry of the General Court on 25 March 2010, Hynix brought an action seeking the annulment of the rejection decision.
17 The notice relating to that action, which is referred to in Article 24(6) of the Rules of Procedure of the General Court, was published in the Official Journal of the European Union on 5 June 2010.
18 By order of the President of the Second Chamber of the General Court of 30 September 2010, Rambus was granted leave to intervene in the present case in support of the form of order sought by the Commission.
19 By document lodged at the Court Registry on 26 July 2010, Nvidia, represented by D. Lahnborg and E. Turner, Solicitors, sought leave to intervene in the present case in support of the form of order sought by Hynix.
20 The application to intervene was served on the applicant and the defendant, pursuant to Article 116(1) of the Rules of Procedure of the General Court.
21 By document lodged at the Court Registry on 27 September 2010, the Commission objected to that application. Hynix did not file observations within the period prescribed.
22 By documents lodged at the Court Registry on 26 October and 4 November 2010 respectively, Nvidia and Hynix submitted observations in response to the Commission’s observations.
23 None of the parties requested confidential treatment in accordance with Article 116(2) of the Rules of Procedure.
The application to intervene
Arguments of the applicant to intervene and of the parties
24 Nvidia submits that it satisfies the requirements for an individual to be able to intervene and that it must, therefore, be granted leave to intervene in the present case in support of the form of order sought by Hynix.
25 The Commission considers that Nvidia cannot be granted leave to intervene in the dispute. In its view, unlike what was found in relation to Alrosa in the case which gave rise to the judgment in Case T‑170/06 Alrosa v Commission [2007] ECR II‑2601, paragraph 39, neither the rejection decision (no more than the decision on the commitments), nor its possible annulment, has a direct and immediate effect on Nvidia’s legal position.
26 First, the Commission submits that the only legal effect of the rejection decision is to reject Hynix’s complaint, whereas Nvidia itself was not a complainant and did not participate in the administrative procedure, at least not prior to the publication of the notice provided for in Article 27(4) of Regulation No 1/2003. That decision does not affect Nvidia in any other way. So far as concerns the decision on the commitments, that decision does not oblige Nvidia to use Rambus’ services or deprive it of the opportunity to do so. Nor does it require Nvidia to accept the maximum royalty rates set out in the commitments, since Nvidia remains free to negotiate better terms. Finally, Nvidia, which is not a complainant, has no right to require the Commission to carry out and pursue the investigation.
27 Second, if the rejection decision were annulled, the ‘reactivation’ of Hynix’s complaint would have no effect on Nvidia’s rights, in particular since Nvidia did not itself lodge the complaint against Rambus. In addition, if the decision on the commitments were annulled, the commitments would no longer be binding on Rambus. However, Nvidia does not explain how such a result would be of interest to it, in particular in so far as concerns the patent licence agreement which it entered into with Rambus in August 2010, with respect to technology used in certain memory controllers. As regards the fact that the Commission would need to take appropriate action under Article 266 TFEU to comply with the General Court’s judgment, this would not lead to an automatic finding of abusive behaviour by Rambus regarding memory controllers, as sought by Nvidia. In that regard, the Commission recalls that the seven year investigation into Rambus’ conduct concerned DRAM chips, not memory controllers. The initiation of a new investigation into memory controllers would thus not necessarily result from the annulment of the rejection decision and/or the decision on the commitments.
28 As to the remainder, the Commission submits, in the first place, that Nvidia got involved in the procedure at a late stage, namely after the publication of the market notice on 12 June 2009, which is not sufficient to establish that it has an interest in intervening.
29 The Commission argues, in the second place, that the alleged influence of Nvidia’s contribution on the content of the rejection decision is not sufficient to justify its intervention.
30 The Commission submits, in the third place, that the possibility of an investigation into the, separate, memory controllers market is too remote from the result of this case to ground a direct interest in intervening. In reality, Nvidia appears to be attempting to change the object and the content of the action for annulment, as defined by Hynix. The present case does not concern memory controllers, which are mentioned only three times, and incidentally, in the application for annulment (paragraphs 75, 169 and 213).
31 In the fourth place, the Commission considers the expertise which Nvidia claims to have in the field of memory controllers to be irrelevant.
Assessment of the President
32 It is not disputed in the present case that the rejection decision and the decision on the commitments are inextricably linked, the former having indeed been adopted exclusively on the basis of the latter (see paragraphs 92 and 93 of the rejection decision). Moreover, it is apparent from the second sentence of Article 9(1) of Regulation No 1/2003 that the adoption of the decision on the commitments necessarily implied that the Commission was no longer required to act in response to Hynix’s complaint. In addition, it follows from Article 9(2) of that regulation that the Commission may reopen the proceedings upon request or on its own initiative only in three instances: (i) where there has been a material change in any of the facts on which the decision on the commitments was based, (ii) where Rambus acts contrary to its commitments; or (iii) if it transpires that the decision was based on incomplete, incorrect or misleading information.
33 Consequently, in principle, any person who justifies an interest in the result of the dispute relating to the validity of the decision on the commitments must be regarded as also justifying an interest in the result of the dispute relating to the validity of the rejection decision.
34 By order of the President of the Second Chamber delivered today in Case T‑148/10 Hynix v Commission, not published in the ECR, Nvidia has been recognised as holding a direct and certain interest in the granting of the form of order sought by Hynix, seeking the annulment of the decision on the commitments, and it has thus been granted leave to intervene in Case T‑148/10 in support of that form of order.
35 Given that the Commission has not shown any particular circumstances justifying, in this case, a derogation from the principle set out in paragraph 33 above, it is therefore necessary to recognise that Nvidia also has a direct and certain interest in the granting of the form of order sought by Hynix, seeking the annulment of the rejection decision.
36 Since the application to intervene was made in accordance with Article 115 of the Rules of Procedure and Nvidia has justified its interest in the result of the case, that application must be granted, in accordance with the second paragraph of Article 40 of the Statute of the Court of Justice. As the notice in the Official Journal of the European Union provided for in Article 24(6) of the Rules of Procedure was published on 5 June 2010, the application to intervene was submitted within the time-limit prescribed in Article 115(1) of the Rules of procedure, and the intervener’s rights will be those provided for in Article 116(2) to (4) of those rules.
On those grounds,
THE PRESIDENT OF THE SECOND CHAMBER OF THE GENERAL COURT
hereby orders:
1. Nvidia Corporation is granted leave to intervene in Case T‑149/10 in support of the form of order sought by Hynix Semiconductor, Inc.
2. A copy of all the procedural documents shall be served on the intervener by the Registrar.
3. A time-limit shall be given to the intervener to set out, in writing, its pleas in support of the form of order which it seeks.
4. Costs are reserved.
Luxembourg, 1 February 2012.