Patent dispute could block iPod, Blackberry imports
updated 10:00 pm EST, Mon November 17, 2008
Memory patent dispute
Memory chip maker Spansion has taken legal action that could result in import bans that would block shipments of iPods and Blackberry handsets, according to the Wall Street Journal. The company filed a lawsuit in a Delaware federal court and submitted a complaint to the US International Trade Commission. Although the memory company is not directly attacking Apple or RIM, it has accused Samsung of violating its flash chip patents. The components in question are contained in Apple, RIM, Lenovo, Sony Ericsson, and Telefon Ericsson products.
Spansion claims to hold patents relating to design features of NAND flash memory. The company also recently acquired Saifun Semiconductors, which holds patents on "charge trapping" technology that allegedly will be required to keep expanding the capacity of future NAND memory.
The company is widening its intellectual property holdings to build a strong licensing business. "The combination of Spansion and Saifun's patent portfolio is the foundation for Spansion's transformation into a licensing leader," said Dr. Boaz Eitan, executive VP of Spansion and CEO of Saifun, according to MarketWatch.
Bernard Cambou, Spansion's CEO, claimed that his company reluctantly filed the charges only after Samsung declined to work out a licensing agreement. The executives also blamed their inclusion of Samsung customers on a previous federal appeals court decision. An ITC exclusion order had been reversed on procedural grounds because Broadcom did not name the customers in its case against Qualcomm.
The increase in competition and flash memory price declines could be contributing factors to the aggressive legal tactics. The company stock, SPSN, increased 47 percent to 50¢ after the announcement, but is still trading 90 percent below its 52-week high of $5.88. "This company is going to go all the way," said Cambou, "we are not going to stop unless we find a solution."
Spansion's accusations to the ITC claim violation of ten patents, while the Delaware federal case focuses on just six but asks for damages and an injunction. Apart from the strength of the case and resolution details between the plaintiff and defendant, the ITC can choose not to issue import bans that would affect customers such as Apple and RIM if the negative impact to consumers would be significant. The proposed import ban reportedly would affect over 100 million devices in one year.
