Spansion suing Samsung over flash memory patents [Update]

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Smaller, lesser known (to Joe Blow consumer) tech companies have been known to take on the big guys with lawsuits that may or may not hold up in court, but this one seems to hold a bit of water. At least it appears that way based on the Reuters and WSJ reports on the matter.

Spansion, an offshoot of AMD, is accusing Samsung and four of its U.S. subsidiaries of infringing on multiple patents and demands reparations from the South Korean electronics juggernaut. Two separate lawsuits were filed today with the International Trade Commission and the U.S. District Court in Delaware. Spansion chose to file with the ITC because they’ve been known to hammer down a tad faster and have the “power to impose exclusion orders” on those being sued, which would put a hamper on Samsung and many companies who rely on their flash memory chips. That list of companies includes Apple, Asus, Kingston, Lenovo, PNY, RIM, Sony and Sony-Ericsson, which means many of our favorite gadgets may not be imported to our great country.

Update: Press release has just hit the wire, included after the jump.

Spansion estimates that Samsung was able to pirate $30 billion from 2003 using their infringed patents.

The patents surrounding the lawsuit are as follows:

The Spansion patents named in these law suits are fundamental to floating gate technology, which is the foundation for approximately 90 percent of the Flash memory market. Spansion is also leading the industry with MirrorBit, a charge-trapping technology, that represents a growing share of the Flash memory market and is expected to replace floating gate technology in the future. Flash memory companies including Samsung have publicly announced their plans to transition to charge-trapping type technologies for their future generation products.

Bernard Cambou, CEO of Spansion, put it all out there when he said,

“This is not just a nuisance suit,” Mr. Cambou said. “This company is going to go all the way–we are not going to stop unless we find a solution.”

Whoa, buddy. Good luck with that.

SUNNYVALE, Calif., Nov. 17 /PRNewswire-FirstCall/ — Spansion Inc. (Nasdaq: SPSN), the world’s leading pure-play provider of Flash memory solutions, today announced that it is filing two separate patent infringement complaints against Samsung with the International Trade Commission and in the U.S. District Court in Delaware. In one of the largest patent infringement claims ever filed, Spansion is seeking the exclusion from the U.S. market of well over one hundred million mp3 players, cell phones, digital cameras and other consumer electronic devices containing Samsung’s infringing flash memory components. The complaint in the US District Court in Delaware also seeks an injunction and treble damages for patent violations relating to Samsung Flash memory, that Spansion estimates has accounted for more than $30 billion in Samsung’s global revenues since 2003.

“Samsung’s infringement of our intellectual property not only harms Spansion, but it threatens the foundation of technology innovation,” said Dr. Boaz Eitan, executive vice president, Spansion, CEO of Saifun.

Flash memory, which retains data in devices when the power is turned off, is found in virtually all electronic devices and is one of the largest segments of the semiconductor industry, with nearly $130 billion in total revenues since 2000.

The Spansion patents named in these law suits are fundamental to floating gate technology, which is the foundation for approximately 90 percent of the Flash memory market. Spansion is also leading the industry with MirrorBit, a charge-trapping technology, that represents a growing share of the Flash memory market and is expected to replace floating gate technology in the future. Flash memory companies including Samsung have publicly announced their plans to transition to charge-trapping type technologies for their future generation products.

“Spansion has patents that are fundamental to Flash memory. Samsung itself has cited these patents many times in its own patent filings, underscoring industry acceptance of the fundamental nature of Spansion’s IP,” said Robert Melendres, executive vice president and General Counsel for Spansion. “Spansion will vigorously protect its intellectual property and is entitled to be compensated by Samsung for its use of our IP.”

The acquisition of Saifun Semiconductor earlier this year expanded Spansion’s IP portfolio and was a key milestone in Spansion’s strategy to create a major licensing business, and generate new streams of significant revenue with very high margins.

“The combination of Spansion and Saifun’s patent portfolio is the foundation for Spansion’s transformation into a licensing leader,” said Eitan. “As the industry transitions to charge-trapping technologies, Spansion is in a strong position to be the technology provider at the core of the future Flash memory market.”

Although Samsung is the target of the litigations, Spansion is required to name the manufacturers of downstream products containing Samsung’s infringing devices in its ITC complaint. Companies named in the ITC case include: Samsung, Apple, Asus, Kingston, Lenovo, PNY, RIM, Sony, Sony-Ericsson, Transcend, some of their subsidiaries and third party manufacturing companies.

With $2.5 billion in revenue in 2007, U.S.-based Spansion is now the third largest provider of Flash memory in the world, behind Korea-based Samsung and Japan-based Toshiba. A long-time technology innovator and one of only three major U.S. Flash memory suppliers, Spansion has invested approximately $2 billion in research and development and holds 3000 patents and patent applications.

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