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TI Wins Partial Victory in Suit on Chip Patents

May 27, 1987|From a Times Staff Writer

Texas Instruments has won a significant, if incomplete, victory in its suit to protect its patents on memory semiconductors, the kinds of computer chips that are used in computers and many household electronics goods.

An administrative law judge has upheld seven of TI's patents on D-RAM chips, and found, in conjunction with the Dallas-based company's patent infringement case filed with the International Trade Commission, that five of those patents had been infringed upon by several Asian chip makers, TI said Tuesday.

TI had filed the suit in early 1986, accusing eight Japanese and one Korean firm of continuing to make and sell chips, based on its patents, after license agreements had expired. The suit came as TI and other U.S. chip makers were wallowing in red ink caused in large part by fierce competition from the Asian rivals and a worldwide industry recession.

7 Settlements Reached

TI has settled with seven of the companies; it announced the latest settlement, with Hitachi, on Tuesday. Industry analysts hailed the previous settlements, which are expected to net TI as much as $300 million in the next four years, as an important step in the industry's fight to protect its so-called intellectual property.

The settlements require the companies to pay TI a fixed royalty fee based on previous sales of the chips in question, and from now through 1991, to pay per-chip royalties. In its first quarter of this year, TI's revenues included $108 million from the agreements.

Hitachi's settlement will not be as rewarding to TI, however. A company official said Hitachi's patent position was stronger than the other six companies with which it had settled: Toshiba, Fujitsu, Matsushita, Mitsubishi, Sharp and Oki Electronics. TI said it does not expect to post significant gains this quarter from the Hitachi settlement.

The TI victory was not complete, however. The administrative law judge ruled that the world's largest chip maker, NEC, had valid license agreements with TI and therefore had not infringed on its patents.

However, TI said it will appeal that section of the ruling.

Additionally, TI said the ruling gives it a strong case to file for an exclusion order against the remaining chip-maker, Samsung of Korea. Such an order would block sales in the United States of Samsung chips based on the patents, and could possibly bar imports containing the chips.

Samsung is one of Korean's leading manufacturer of electronics products, including VCRs, televisions and audio equipment.

Part of the settlements with the seven companies involve new cross-licensingarrangements allowing the makers to exchange technologies.

TI, a pioneer in semiconductors, is one of the few American firms still the kind of memory chips involved in the dispute.

Analysts have said that earlier arrangements with the Asian companies, in which technology was licensed for nominal fees, helped lead to the American companies' decline in the worldwide market. The settlements with TI, observers have said, will pave the way for new licensing structures that will help protect U.S. companies' position in future generations of chips and more advanced, more profitable kinds of semiconductors.

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