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National Semi Wins Round in Chip Lawsuit : Taiwan Firm Ordered to Stop Selling Product

September 03, 1986|DONNA K. H. WALTERS | Times Staff Writer

National Semiconductor won the first round in its trade secrets case against a Taiwanese maker of computer chips, National Semi said Tuesday.

The Santa Clara, Calif.-based company said it was granted a preliminary injunction on Monday in district court in Taipei that blocks United Microelectronics Corp. from selling a certain type of integrated circuit. The injunction will remain in effect until the issue is decided at trial.

In a separate case, Hitachi has sued Texas Instruments of Japan, claiming infringements of patents on a memory storage chip.

The cases are two of several legal disputes that have erupted between U.S. and Asian makers of chips, as the semiconductors or integrated circuits are called. The devices are used to store and manipulate information in many kinds of electronic goods. Worldwide sales of chips exceed $20 billion a year.

Face Loss of Markets

The legal cases focus on protection of "intellectual property" and have become increasingly significant for U.S. chip manufacturers, which are facing losing markets for their products to foreign-made products that often are based on the U.S. companies' original design or technology.

The companies have only recently become vigorous in their use of patent and copyright law to assert their claims to the complex chip technologies.

"For years, the companies had not been very aggressive in trying to protect their investments in these products," said Daniel Klesken, semiconductor analyst for Montgomery Securities in San Francisco. "But now the stakes are huge. One chip might generate several hundred million dollars in revenues throughout the years . . . and that is a reason to do this."

In its suit, National Semi seeks to block United Microelectronics from marketing a type of chip known as a universal asynchronous receiver-transmitter--a device widely used in connecting personal computers with peripheral devices such as printers and telephone modems.

National said the chip is "heavily based" on proprietary technical data. National Semi had contracted with the Taiwanese company to manufacture asynchronous receiver-transmitter chips for it between October, 1983, and October, 1984. It said United Micro now is trying to sell a chip based on design information that it gained as a part of that exclusive arrangement.

A spokesman at Dallas-based Texas Instruments said Hitachi filed the suit Aug. 28 in Japan against TI's Japan-based subsidiary. Ten days earlier, Hitachi filed a similar suit against TI involving another memory chip, this time in an Alexandria, Va., court.

Those suits apparently are Hitachi's answer to a wide-ranging patent infringement case filed by TI early this year against Hitachi, seven other Japanese companies and one Korean-based semiconductor maker. That case is expected to come to trial in Dallas in November.

Additionally, the International Trade Commission has begun hearings on the trade complaint that TI filed in conjunction with the patent infringement suit.

Two of the other defendants in that case, Toshiba and NEC, already have filed counter actions.

In another suit with potentially far-reaching impact, NEC has challenged an Intel copyright on microcodes, the information-handling instructions that are built into chips. NEC claims that microcodes cannot be copyrighted. Trial has been held in that case, and a decision could come as early as this month.

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