Spansion seeks to bar imports of devices with Samsung flash memory

In what the company happily proclaimed to be "one of the largest patent infringement claims ever filed," flash patent holder Spansion Inc. has filed infringement suits against Samsung in federal court and before the USITC.

A boilerplate lawsuit filed against flash memory market leader Samsung in US District Court in Delaware yesterday simply lists six patents which deal with different aspects of the production and manufacture of high-quality flash memory, and asks for whatever damages the court sees fit to impose. In a press release yesterday, however, Spansion notes that it estimates Samsung's global revenues from the sale of devices such as MP3 players and cell phones containing this memory, to exceed $30 billion -- leading many to say today that Spansion has filed "a $30 billion lawsuit."

With its separate filing before the US International Trade Commission, Spansion seeks to stop the import into the US of practically any devices that contain flash memory manufactured using techniques that Spansion claims to hold rights to. Samsung reaped 42.3% of the world's revenue from sales of NAND flash memory in the second calendar quarter of this year, according to hardware analysis firm iSuppli.


What appears to be happening, based on an analyst's report from Objective Analysis' Jim Handy this afternoon, is that Spansion is seeking to establish the value of its patent portfolio for licensing to prospective clients, by successfully threatening the biggest potential client it may have had.

Two major events led to Spansion's ability to try this suit: In July 2002, a company called Saifun Semiconductor sued AMD and Fujitsu, alleging that they willfully infringed on its patents regarding the use of a certain technique to eek two bits of flash memory storage from one cell. It's a technique that AMD (along with its technology partner, Spansion) originally branded as "MirrorBit" and that's generally known as charge trapping. It was an early attempt at multi-level cell, and it still works today.

Rather than go the Broadcom/Qualcomm route, however -- essentially fighting it out until the imminent collapse of the universe -- the two sides agreed to settle. AMD and Fujitsu would cross-license their patents to Saifun; and to make it all work out, the two manufacturing giants would take equity stakes in the producer. That made it possible for Saifun to defend AMD's patents in court, as part of the modern way of establishing the market value of one's IP portfolio. But as small as Saifun was, even with the equity investment, it may have been too small to manage a long-term assault on another target.

Thus the need for event #2: Spansion acquired Saifun in October 2007, in a move that was literally hailed at the time as the pairing needed to open an attack front for IP in the flash memory space, thus driving up the perceived value of technologies. In a market where the products themselves continue to decline in price at an unstoppable pace, essentially, one has to find value somewhere.

"Spansion has signaled the industry that they expect to build a significant royalty stream by licensing their portfolio of more than 3,000 patents and applications," writes Objective Analysis' Handy this afternoon. "Flash makers who are in negotiations today for the company's charge trapping technology are now warned not to take these negotiations lightly. Although Spansion's management expresses a preference for fair royalties attained through friendly negotiations, they show today that they don't intend to back down if challenged."

Also listed in Spansion's complaints is mirror-gate technology, which is essential to some 90% of the world's flash memory, according to experts' estimates. An almost immeasurable array of CE devices use Samsung flash memory, most notably Apple iPods and iPhones, RIM BlackBerrys, and Sony Ericsson phones. Samsung has yet to issue a public response.

2 Responses to Spansion seeks to bar imports of devices with Samsung flash memory

© 1998-2021 BetaNews, Inc. All Rights Reserved. Privacy Policy - Cookie Policy.