Samsung Writes Check to Spansion for $70 Million

Earlier this afternoon, Spansion announced that it will receive $70 million from Samsung to settle current patent litigation.  The original lawsuit was filed in November 2008, and was centered around flash memory which retains data when an electrical device is turned off.  In addition, the two companies will also license their respective patent portfolios, according to Barron’s.  However, the deal is still subject to bankruptcy court because Spansion has filed for Chapter 11.

The history of the dispute between Samsung and Spansion may only be a few months old, but in that time it has spanned across continents.  Following the Spansion lawsuit in November, Samsung filed a patent infringement complaint last January in Japan.  Yet, both lawsuits will be dismissed in accordance with the agreement, and neither company will admit liability.

Spansion shareholders enjoyed a nice boost after the deal was announced, as shares jumped 70%, to 23 cents.

Microsoft, TomTom End Legal Dispute

The high-profile legal dispute between Microsoft and TomTom has reportedly come to an end.  Although specific terms of the agreement were not disclosed, TomTom will pay Microsoft for coverage under its patents, and Microsoft will receive coverage under four TomTom patents as well, reports MarketWatch.

The dispute originated in February, as Microsoft filed suit against TomTom, alleging that the GPS maker was infringing on eight of its patents related to car-navigation.  TomTom countersued soon after, stating that its intellectual property was being infringed by Microsoft.

Shortly after filing their countersuit, TomTom joined the Open Invention Network, an organization that accumulates defensive patents in order to protect Linux from patent infringement lawsuits.  This maneuver led many to believe that there might be a bigger fight on the horizon between the Open Invention Network and Microsoft.

Yet, this agreement has quieted any such conflict.  In addition to paying Microsoft, TomTom has also agreed to remove some of its functionality related to file-management system patents within two years.  Also, TomTom’s coverage for Microsoft’s patents is designed to be compliant with the free software-licensing system adhered to by open-source providers.

Oracle & Alcatel-Lucent Settle Litigation

The patent infringement lawsuit surrounding Oracle and Alcatel-Lucent has now come to an end.  As reported by the Daily Herald, Oracle had sued Alcatel-Lucent in May, claiming that their OmniTouch My Messaging system infringed on Oracle patents.  Although terms of the agreement are confidential, one can safely assume that the agreement pleased both parties, as Alcatel-Lucent had countered the suit by claiming that Oracle’s patents were invalid.

The dispute started in December 2007, when Alcatel-Lucent wrote a letter claiming that Oracle’s Data Mining, E-mail Center, Data Guard and other products infringed on their patents.  Since then, 13 patents have come into question, five of which belong to Oracle, and seven to Alcatel-Lucent.  The last patent is the property of Siebel System Inc., which was acquired by Oracle in 2005.

The case was ordered closed on March 26, by a California district judge.  While Oracle was not available for comment, Alcatel-Lucent stated that they were “glad to put this matter behind us.”

Apple Named in Two New Lawsuits

As if the lawyers for Apple weren’t already busy enough, Affinity Labs of Texas LLC has accused the company of infringing on three patents.  The patents are titled “System and method for Communicating Selected Information to an Electronic Device,” “Audio System and Method,” and “Content Delivery System and Method.”  According to Ars Technica, Affinity Labs claims that these patents cover buying songs from the iTunes store, and downloading songs from iTunes onto an iPod or iPhone.  It is also claimed that these patents cover playing digital audio on an iPod or iPhone with external speakers.

Before reacting to this news, it should be mentioned that the lawsuit was filed in patent infringement-friendly Eastern Texas.  Also, the patents seem to be a bit broad, since it seems as if they would apply to every audio device that plays digital audio.  Affinity Labs has similar suits pending against car manufacturers, in which the defendants have filed countersuits.  Can you say “patent troll?”

Accolade Systems LLC has also named Apple in a lawsuit, after it named Micron and Aptina as defendants as well.  Accolade claims that their patent, “Method and Apparatus for Detecting Camera Sensor Intensity Saturation,” is violated by Apple as the iPhone automatically adjusts the brightness of a screen based on surrounding light.  Other cellphones and products also have this feature, so it remains unclear as to why the suit is being launched against Apple.

While it seems as if Apple may be able to wiggle its way out of these lawsuits, Apple’s bottom line may be hurt as it still must pay money to defend itself.

TAG to Close After Lawsuit Defeat

Looking for evidence of how infringement lawsuits can cripple a company?  Well, look no further than TAG Co., as it recently lost a suit against Sensormatic Electronics.

According to the Miami Herald, TAG is shutting down after it was found that the company had stolen Sensormatic’s trade secrets, while also infringing two Sensormatic patents.  TAG had started manufacturing its own antitheft labels, and introduced their line of disposable tag in 2006.  But after only three months, Sensormatic filed a lawsuit against TAG.

The court’s decision found that TAG had obtained Sensormatic specifications to make its antitheft labels.  Also, the court found that a TAG consultant copied 24,000 pages of documents when he left Sensormatic.  Not helping matters was the fact that Mark Krom, the president of TAG, as well as other company managers, are former Sensormatic employees.

Sensormatic was awarded $200,000 in damages, as well as an injunction against TAG from selling “any products produced with information taken from Sensormatic.” 

After the legal defeat, TAG’s owner, Adurion Global Opportunities Fund, decided to pull the plug on the company.  It is expected that at least 60 people who worked at TAG will lose their jobs.

TomTom Countersues Microsoft

Last month, Microsoft sued TomTom for violating eight of its patents.  However, the GPS maker recently fought back by issuing its own countersuit against Microsoft, reports Electronista.  The suit accuses Microsoft of infringing on four patents, while also stating that Microsoft’s use of the technology “has been and continues to be willful and without license from TomTom.”

This case has received interest from the open-source community, as Microsoft’s original lawsuit related to patents involving the Linux operating system.  But when Microsoft was asked if open-source software was a target of their lawsuit, Horacio Gutierrez of Microsoft said the following:

Microsoft respects and appreciates the important role that open-source software plays in our industry and we respect and appreciate the passion and the great contribution that open-source developers make in our industry.

One GPS maker that does hold licenses from Microsoft for similar technologies is Garmin, TomTom’s top competitor.  Microsoft claims it is only trying to maintain its previous position of licensing the technology to TomTom.  “As has bee then case for more than a year, we remain committed to a licensing solution, although we will continue to press ahead with the complaints.”

U.S. Senator: Patent Bill Will Pass

While Congress has recently been receiving  flack for their bailouts of financial institutions, one subject that has been lost in the news is the progress of U.S. patent reform.  In fact, Senator Orrin Hatch predicted that the bill, currently being written, would pass the Senate.  “I think we’re close to it,” he told Reuters.

The bill looks to address the main issues that are currently plaguing the patent system.  First, the new bill will reduce damages paid for infringement, while also making it tougher for plaintiffs to find an infringement-friendly court. 

The bill will also contain language making it tougher to show misconduct in applying for patents.  This portion of the bill would force plaintiffs to find evidence of misconduct to win invalidation of a patent, rather than a simple error in the patent process.  However, the bill does not currently include these clauses.  “They left it out, with the understanding that they are going to work it out,” Hatch said.

When Orrin was asked if the bill would pass this year, the Republican from Utah said, “I think so.  This is the closest we’ve come to really doing this job.  I’d be very shocked (if it didn’t).”

Discovery Sues Amazon over Kindle

Although Amazon introduced the Kindle e-book reader in November 2007, it appears as if a similar patent was granted that same month to Discovery Communications.  That company, better known for its ownership of the Discovery Channel, filed a patent in 1999, with  most of the major features now incorporated in the Kindle.  As reported by Ars Technica, Discovery has now filed a suit against Amazon for patent infringement.

Discovery’s patent is called “Electronic book security and copyright protection system,” and the majority of the claims involve encrypting and delivering e-book contents.  But the patent contains over 170 clauses, most of them citing variations in which the encryption takes place at different points in the distribution.  The patent also explains that a patented book could be distributed over the Internet and on “a wireless telephone network.”  If that weren’t troubling enough for Amazon, the patent also covers most of Kindle’s content management system.

Discovery is not seeking an injunction with their lawsuit, but they are seeking “adequate [damages] to compensate Discovery for Amazon’s infringement.”  The suit also asks the court to impose a royalty agreement.

It is now for the court to decide if Amazon really did infringe on Discovery’s patents, or if these similarities are not guilty of infringement.  But Discovery has nine patents covering e-books in their portfolio, and it may be tough for Amazon to evade all of them.

Court Dismisses Broadcom Complaint

Broadcom Corp and Qualcomm Inc. are currently involved in a series of patent disputes over mobile phone technology patents.  In fact, the dispute has spilled out of the court room and a dispute currently sits in front of the International Trade Commission.  However, the two companies made news today as a federal court dismissed a Broadcom complaint that was filed in an October 2008 lawsuit against Qualcomm.

As reported on Reuters.com, Broadcom claimed that Qualcomm gained royalties on “exhausted” patents.  The issue of patent exhaustion often arises in recycled or re-sold components.  However, the judge said that Broadcom did not identify any specific patents that were allegedly exhausted, and denied Broadcom any declaratory relief.

Last September, a U.S. appeals court ruled that Qualcomm had infringed on two Broadcom patents.  The decision upheld an injunction against Broadcom, but shortly after, an appeals court ruled in Qualcomm’s favor for one of the patents.

Hynix to Pay Rambus $397 Million

The decade-long dispute between Rambus and Hynix may soon be coming to an end.

According to Digital Trends, Hynix has agreed to abide by a district court’s decision that Hynix pay Rambus a total of $397 million. Of that total amount, $134 million will cover patent infringement prior to December 31, 2005, and $215 million will cover infringement from January 1, 2006, through the end of January 2009.  Rambus was awarded an additional $48 million in interest.

It should be noted that while Hynix has agreed to pay the final judgment, it is still appealing that Rambus’ patents aren’t valid.  The court decided that even though Rambus destroyed evidence while preparing to sue Hynix and other DRAM companies, Rambus was still permitted to continue its suit against Hynix.  Hynix is contending that this ruling contradicts judgements in other courts in the United States, as Rambus’ other lawsuits were dismissed.  Also, the USPTO recently issued rulings that found Rambus’ patent invalid.

If this most recent ruling is not overturned, Hynix will also have to pay Rambus royalties on net sales of particular memory products though April 2010.  The royalty percentages are 1% for SDR SDRAM products and 4.25 percent for DDR SDRAM products, with the latter rate applying to DDR, DDR2, DDR3, GDDR, GDDR2, GDDR3 SDRAM, and DDR SGRAM products.

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