Memory Chip Makers Face Off in ITC Patent Battle

Memory chips used in everything from computers to DVD players to video games are at issue in a massive patent infringement case before the International Trade Commission. Germany's Infineon Technologies named a whopping 20 defendants in the suit, but its prime target is Japanese memory chip giant Elpida Memory, which Infineon in its complaint alleged "has adopted wholesale, without Infineon's authorization, many of Infineon's patented inventions."

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Memory chips used in everything from computers to DVD players to video games are at issue in a massive patent infringement case before the International Trade Commission. Germany’s Infineon Technologies AG named a whopping 20 defendants in the suit, but its prime target is Japanese memory chip giant Elpida Memory Inc., which Infineon in its complaint alleged “has adopted wholesale, without Infineon’s authorization, many of Infineon’s patented inventions.” The ITC voted Tuesday to institute an investigation under section 337 of the Tariff Act of 1930 and assigned the case (“Certain dynamic random access memory semiconductors and products containing the same”) to Administrative Law Judge Theodore Essex. Infineon is seeking the strongest penalty available under the statute — a general exclusion order barring the importation of all dynamic random access memory semiconductors, or DRAMs, made by Elpida, plus all downstream goods containing the chips — computers, laptops, notebooks, servers, mobile devices, handheld game consoles, media recorders, media players, personal navigation devices and more. Alternatively, Infineon wants limited exclusion orders against each of the defendants that would bar them from importing the infringing memory chips or products made with them. Infineon in its complaint made clear that it views the defendants as intertwined. “The respondents cannot be viewed in isolation, for they act in concert,” wrote Infineon counsel King & Spalding partner Robert Whitman. “For example, certain respondents work together at the same facility to manufacture articles that infringe the Infineon patents.” Whitman did not return a call seeking comment. Other King & Spalding lawyers working on the case include Richard Pettus, Scott Kolassa, Gilbert Kaplan, Jeffrey Telep and Taryn Koball. Elpida has retained Finnegan, Henderson, Farabow, Garrett & Dunner. Lead lawyer Smith Brittingham IV declined to comment on the case other than to say, “We will present our defense in due course.” The Finnegan team also includes Thomas Jenkins, Roger Taylor, Naoki Yoshida, Ann McCamey, Erik Puknys, Ming-Tao Yang and Wesley Derrick. According to the complaint, Elpida is the third-largest DRAM supplier in the world, and sold $715 million of DRAM products directly in North America in the year ending March 31, 2009. Infineon in 2008 was the sixth-largest semiconductor company worldwide, with $6 billion in revenue. The company owns more than 21,600 patent applications and granted patents in over 40 countries and spent more than $1 billion on research and development in 2008. Four patents are at issue in the current case. “The Infineon patents cover, among other things, the design and manufacture of these semiconductor memory chips,” according to the complaint. “Infringing Elpida DRAMs and downstream goods containing the same are routinely imported into the United States.” The complaint also notes that these electronic products “typically cannot function without the Elpida DRAMs.” But Infineon also held out an olive branch — for a price. “Infineon has concluded a number of license agreements, and remains willing to negotiate fair and reasonable license agreements with the respondents,” the complaint states. Other companies (and their subsidiaries) named in the complaint are Rexchip Electronics, Kingston Technology Co., Payton Technology Corp., A-Data Technology Co., Apacer Technology Inc., Buffalo Inc., Corsair Memory, Mushkin Inc. and Transcend Information Inc.

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