Samsung Sued Over Flash Memory Technology

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Samsung Electronics Co., one of the world's largest manufacturers of the "flash memory" chips essential to countless common electronic devices, was sued on Monday by a U.S. company alleging that Samsung has built sales of at least $7 billion yearly based on infringed patents.

Spansion Inc., based in Sunnyvale, Calif., in Silicon Valley, filed suits in the U.S. District Court for the District of Delaware and in the International Trade Commission. claiming that Samsung has infringed 10 Spansion patents for flash memory used in technology ranging from household computers, cameras and cellphones to advanced military, medical and research applications. Spansion v. Samsung Electronics Co. (D. Del.); In the Matter of Certain Flash Memory Chips, Investigation (ITC).

Calls and e-mails to Samsung's U.S. headquarters seeking comment were not returned.

Ethan Horwitz, a partner in the intellectual property practice in the New York office of Atlanta-based King & Spalding, which represents Spansion, said the federal court suit seeks treble damages on what Spansion claims is at least $30 billion in sales garnered by Samsung since 2003 on six infringed patents. The International Trade Commission filing seeks to block importation of products containing chips that allegedly infringe four other patents.

"We want a quick stop to Samsung using our technology, which we can get through the ITC with an exclusion order, and to recover damages, which we can get through the district court," Horwitz said. "There is overlap in the nature of the technology but they are two distinct cases."

Robert Melendres, general counsel for Spansion, said the company is one of the last American competitors in the global market for flash drive dominated by Samsung of Korea, and Toshiba of Japan.

"We are an American company competing on the basis of innovation in a low-margin business," Melendres said. "There will be no U.S. players in this market if we don't protect our intellectual property. That is fundamental."