Toshiba, Matsushita, JVC, NEC Settle Microchip Suit

By Ron Zapata, ron.zapata@portfoliomedia.com

Portfolio Media, New York (December 18, 2007)--Matsushita Electrical Industrial Co., Toshiba Corp., JVC Americas Corp. and NEC Electronics America have settled an infringement suit filed by two patent-licensing companies over microprocessor technology.

Technology Properties Limited and Patriot Scientific Corp. on Tuesday announced the settlement between the companies in which Matsushita, Toshiba, JVC, their respective subsidiaries and their European and Japanese counterparts will receive rights to use seven U.S. patents. TPL and Patriot also announced a similar separate agreement with NEC.

Other details on the settlements were not disclosed.

“The parties have agreed that the details of the settlement are confidential,” TPL said in a statement on behalf of all the parties. “All parties are pleased with the business resolution of their dispute and will be voluntarily dismissing their Texas and California lawsuits.”

The Matsushita settlement also covers subsidiaries such as Panasonic Corp. of North America, a Matsushita unit that was named in the suit.

A trial in the case had been scheduled for January 2008.

TPL and Patriot's infringement lawsuit was filed in the U.S. District Court for the Eastern District of Texas. Privately held TPL and publicly held Patriot claim that the three patents-in-suit protect fundamental technology in designing microprocessors, microcontrollers and embedded processors.

Fujitsu Ltd. and Sony Corp. and some of their respective subsidiaries were also named as defendants but reached settlements during the course of the case.

The dispute dates back to October 2003, when Patriot filed a suit in the Northern District of California against the group, alleging infringement of three patents that cover high-performance microprocessors with variable speed system clocks and the fundamental techniques for designing them.

Patriot had also sued TPL in February 2004 over ownership of the patents.

The patents-in-suit were co-invented by TPL's chief technology officer Chuck Moore and Russell H. Fish III.

Mac Leckrone, president of TPL's licensing arm called Alliacense, said that TPL had filed for the patents and funded the technology's development.

However, Fish had assigned his interest to the patents to Nanotronics Corp., which eventually assigned the patents to Patriot.

Patriot's suit against TPL claimed that Fish had solely conceptualized the patent technology and should therefore be deemed the sole owner of the patents.

TPL, which also develops microprocessors as part of its business, offered Patriot $7.5 million for the portfolio, an offer that was declined based on Patriot's estimated worth of the portfolio at $1 billion. By June 2005 Patriot dropped its complaint against TPL and entered into an agreement to jointly control the patents.

TPL and Patriot then sued the Japanese electronics makers, seeking injunctive relief and increased damages for willful infringement, in the Eastern District of Texas. TPL alleged that the patents covered microprocessors with clocks faster than 110-MHz to 120-MHz, which applies to a great number of computers in use today. While the patent describes the invention, it does not actually contain the phrases “110-MHz” or “120-MHz.”

“The cited infringement pertains to a wide variety of end-user products including personal computers, servers, workstations, home theater systems, digital TVs, video games, DVD recorders/players, mobile handsets and automotive electronics,” TPL said.

The defendants fought back with declaratory judgment suits filed in the U.S. District Court for the Northern District of California.

The defendants alleged that the patents were invalid due to double-patenting and that one of the patents should be barred from litigation under the doctrine of res judicata.

“A judicial declaration as to whether the claims of the patents-in-suit are invalid … is necessary and appropriate at this time so that plaintiffs can ascertain their rights and duties with respect to designing, developing, marketing and selling their products,” NEC said.

TPL was appealing a claim construction order for a patent that was thrown out of the suit. The patent-holding company had agreed to a judgment of noninfringement on the patent to “simplify and streamline” a trial scheduled in the case for January 2008. TPL also said it stipulated to the noninfringement order so that it could immediately appeal a Markman ruling regarding the third patent.

Since January 2006, TPL said companies such as Hewlett-Packard Co., Sony Corp. and Sharp Corp. have purchased licenses for the patents-in-suit. Companies that have purchased a license for the portfolio of patents this month include Alpine Electronics Inc., Lite-On IT Corp., and WMS Gaming Inc.

The patents in question are U.S. Patent Numbers 5,809,336; 6,598,148 and 5,784,584.

TPL and Patriot were represented by Townsend and Townsend and Crew LLP, Brown McCarroll LLP and Ireland Carroll & Kelley PC.

Fujitsu is represented by Morrison & Foerster LLP. Matsushita and JVC are represented by Weil Gotshal & Manges LLP; Ramey & Flock and Gillam & Smith LLP. NEC is represented by Foley & Lardner LLP; Beck Redden & Secrest LLP; Toshiba is represented by Baker Botts LLP and The Roth Law Firm.

The case is Technology Properties Limited Inc. v. Matsushita Electrical Industrial Co. Ltd. et al., case number 05-cv-00494, in the U.S. District Court for the Eastern District of Texas.

--Additional reporting by Jesse Greenspan and Christine Caulfield

Correction: A previously published version of this article incorrectly stated that the patents-in-suit were originally issued to Patriot. The error has been corrected.document.write('');