May 14 (Bloomberg) -- The U.S. Federal Trade Commission dropped the remainder of its antitrust case against Rambus Inc., the memory-chip technology company said, ending the regulatory agency’s bid to impose penalties intended to limit Rambus’s royalties.

“We are pleased to have finally put this matter behind us,” Rambus’s general counsel, Thomas Lavelle, said in a statement. Rambus rose 14 percent on news that the seven-year battle with the U.S. government was over.

An appeals court last year threw out FTC findings that Los Altos, California-based Rambus undermined competition in the market for dynamic random-access memory chips by scheming to get secretly patented technology included in industry-wide standards. The U.S. Supreme Court in February turned away the FTC’s appeal to revive its case.

“The commission finds that further litigation in this matter would not be in the public interest,” the agency said in an order dismissing the small portion of the case, first filed in 2002, that had remained.

The FTC had sought to limit the amount of royalties Rambus could collect on dynamic random access memory, or DRAM, chips that work as the main memory in computers. Rambus gets more than 80 percent of its revenue from royalties.

Move Forward

“While we remain disappointed by the decision of the Court of Appeals, we of course respect the Court’s opinion and will move forward,” said Richard Feinstein, director of the FTC’s Bureau of Competition. “The standard-setting issues that were at the heart of this case remain important, both as a matter of antitrust policy, and in order to protect consumers, and we will remain vigilant in this area.”

Micron Technology Inc., Hynix Semiconductor Inc. and Nanya Technology Corp. lost a federal court trial in which they made similar antitrust allegations. A different appeals court in 2003 threw out a fraud verdict against Rambus that made similar claims.

Rambus is seeking to settle antitrust claims with the European Union regulators, three people with direct knowledge of the case said last month.

Rambus rose $1.52 to $12.30 in Nasdaq Stock Market trading. The stock has lost 23 percent of its value this year.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

Last Updated: May 14, 2009 16:54 EDT