Courts and common sense

It's easy to pick on politics, politicians, and government agencies given the entirely reliable stream of foolishness from that quarter. But I came across something today that shows that even the courts, presumably independent of the day to day world of executive and legislative politics can be every bit as foolish.

Here's the brief

WASHINGTON (Reuters) -- The U.S. Supreme Court declined on Monday to hear the Federal Trade Commission's appeal in its suit against Rambus Inc. that accused the memory chip maker of "deceptive conduct," sending the company's shares up as much as 16% in early trading.

The FTC, one of two U.S. agencies to enforce antitrust law, said Rambus failed to tell a standard-setting group about patented technologies while advocating them as a new chip standard.

The Supreme Court denied the FTC's appeal without any comment.

The suit is one of several legal issues involving Rambus, whose shares whipsaw with each development.

The FTC asked the high court to review a ruling by the U.S. Court of Appeals for the District of Columbia, which had found on April 22, 2008, that the FTC erred in concluding Rambus acted to gain a monopoly.

The FTC last year had ordered Rambus to stop collecting some patent royalties. The agency later amended that order to put the royalties in escrow, but then had its order put aside by the appeals court.

FTC Commissioner Jon Leibowitz said the agency would continue to make standard-setting and monopolization cases a priority.

So the basic facts seem to be these:

• The FTC, the government agency that is tasked with protecting the public from unfair trade practices, acted to restrain Rambus from collecting royalties on technology that Rambus has promoted to standards groups without telling the standards groups that it was, oh by the way, patent protected and that Rambus would thus be charging other chip manufacturers a royalty or might use the patent to restrain other memory manufacturers from competition. Good on you FTC.
• The courts, that's the folks that are supposed to enforce the law, in the form of the U.S. Court of Appeals for the District of Columbia and now Supreme Court, have said no fowl! To wit, it's OK to engage in what common sense says is a deceptive practice and to profit by it both monetarily and possibly to form a monopoly.

Now, lest you think that it's all technical and what is memory anyway, be informed that memory is absolutely central to a technological society. It's one of two or three things that make your cell phone, PC, TV, car, refrigerator, washing machine, etc. smart. The chip market is worth 10s of billions per year. Moreover, it is dominated by a handful, about 6 or so, very large providers.

Think about it for a minute. We're talking about something that is essential to our technological society that is controlled by few large firms!

Common sense tells us that that is a recipe for abuse as we've recently experienced with oil and banking. But, of course, the courts don't have to deal with common sense or the real world. Where the FTC rightly sees unfair trade, the court sees no harm. It seems that justice isn't simply blind, sometimes if dumb!