E.Digital Seeks To Settle With Samsung Over Flash IP

Articles

* Olympus, E.Digital Settle Flash Memory Patent Spat

* Avid, E.Digital Settle Flash Memory Patent Suit

* Sanyo, E.Digital Settle Flash Memory Patent Suit

* Nikon, E.Digital Settle Flash Memory Patent Suit

* Suit Seeks To Mute Tech Cos.' Digital Recorders

By Christopher Norton

Law360, New York (August 24, 2009) -- E.Digital Corp. has called a truce

with Samsung Electronics America Inc. in order to settle the last remaining

claims in a patent infringement suit against a number of electronics

manufacturers over the use of flash memory devices in consumer electronics.

Magistrate Judge Charles Everingham IV of the U.S. District Court for the

Eastern District of Texas on Friday ordered all proceedings between the

technology companies stayed until Sept. 18, by which point the companies are

due to finalize a settlement agreement.

E.Digital sued Samsung, Sanyo North American Corp., Nikon Inc., Avid

Technology Inc., Casio America Inc., LG Electronics USA Inc. and Olympus

America Inc. in March 2008, claiming that cell phones, digital cameras,

camcorders and other devices with digital recording capabilities made by the

defendants infringed four of the company¹s patents.

Samsung is the only remaining defendant in the case.

The patents-in-suit ‹ titled ³Hand-held record and playback device with

flash memory,² ³Method for recording voice messages on flash memory in a

hand-held recorder,² ³Operating system including improved file management

for use in devices utilizing flash memory as main memory² and ³Flash memory

file system in a hand-held record and playback device² ‹ were issued to

e.Digital between 1996 and 1998, according to the initial complaint.

E.Digital sought a declaration that the defendants had infringed the

patents-in-suit, preliminary and permanent injunctions barring the

defendants from future acts of infringement, compensatory damages, and

attorneys¹ fees, the complaint said.

The plaintiff settled with Olympus in April, as well as Avid and Sanyo in

March and Nikon in February.

It had previously reached agreements with Casio in December 2007 and LG

Electronics in October 2007.

E.Digital asserted the same four patents in a lawsuit against Vivitar Corp.

in the Eastern District of Texas in September 2007. That suit was

administratively closed on March 25 because Vivitar filed for bankruptcy.

Though e.Digital focuses on providing in-flight audio for airlines, most of

the company's recent announcements tout its success at patent licensing.

With each dismissal motion, e.Digital has publicized a new patent licensing

agreement, all of which see e.Digital receive a one-time licensing fee, as

in the Olympus settlement.

As part of the agreement, Olympus obtained a license and release on all

e.Digital foreign and domestic patent rights, in exchange for a a one-time

licensing fee paid to e.Digital.

Some of e.Digital¹s settlements with the camera makers have also included

cross-patenting licensing agreements.

E.Digital reported licensing revenues of $10.1 million for the fiscal year

ending March 31, but had no patent license revenue and reported net losses

of $570,000 in the first quarter ending June 30, according to an Aug. 13

financial statement.

Based on its early licensing success, the company expects further legal and

licensing activity, additional patent enforcement actions, and additional

IP-related revenues this fiscal year, e.Digital said.

Counsel for e.Digital did not immediately respond to requests for comment

Monday, nor did representatives for Samsung.

The patents-in-suit are U.S. Patent Numbers 5,491,774; 5,742,737; 5,787,445;

and 5,839,108.

E.Digital is represented by Duane Morris LLP and Siebman Reynolds Burg

Phillips & Smith LLP.

Samsung is represented by Potter Minton PC and Kirkland & Ellis LLP.

The case is E.Digital Corp. v. Casio America Inc. et al., case number

2:08-cv-00093, in the U.S. District Court for the Eastern District of Texas.

--Additional reporting by Richard Vanderford and Erin Coe