Samsung Wins Trade Ruling in Patent Case Against Spansion

Samsung Electronics Co. won a U.S. trade ruling in its efforts to block imports of flash-memory chips made by Spansion Inc. Shares of Spansion fell after the close of regular-hours trading.

U.S. International Trade Commission Judge Carl Charneski said today that Spansion infringes a Samsung patent for a way of controlling the processes used to make the chips. The judge’s findings, which were released after U.S. financial markets closed, are subject to review by the six-member commission, which has the power to block imports of products found to infringe U.S. patents.

Spansion and Samsung are competitors in the market for flash memory, used to store images and music on portable electronics. The companies have eight patent-infringement cases pending against each other, Spansion said in its annual report Feb. 23. Charneski’s full findings weren’t immediately released to give both sides time to redact confidential information.

“We are disappointed in the judge’s preliminary decision and do not agree with the conclusions,” Michele Landry, a Spansion spokeswoman, said in e-mailed statement. “Once we have had the opportunity to review the judge’s ruling in detail, we expect we will ask for the full commission review, which will occur in the next couple of months.”

Spansion Shares Fall

Chips made by Sunnyvale, California-based Spansion are used in electronics including Alpine Electronics Inc.’s global- positioning systems and D-Link Corp.’s wireless routers.

Spansion fell 8.4 percent to $19.30 at 4:30 p.m. in after- hours trading. The shares closed at $21.07 at 4:15 p.m. in New York Stock Exchange composite trading.

In December, the commission upheld a finding by ITC Judge Charles Bullock that Samsung wasn’t violating Spansion’s patent rights. That case also targeted products that use Samsung chips such as Apple Inc.’s iPod and Research In Motion Ltd.’s BlackBerry.

“Spansion will continue to fight any violations of our patents to defend our investment in technology,” Landry said. “Spansion filed four additional patent infringement lawsuits against Samsung in August 2010, so there are five lawsuits expected to go to trial over the next thirteen months beginning in June.”

Chris Goodhart, a spokeswoman for Samsung, didn’t immediately return a message seeking comment.

Agreement Rejected

Samsung, based in Suwon, South Korea, filed the complaint against Spansion and its customers after a U.S. bankruptcy judge rejected an agreement in which Samsung would have paid $70 million to end all patent disputes. Spansion, a former unit of Advanced Micro Devices Inc., filed for Chapter 11 protection from creditors in March 2009, and emerged from bankruptcy in May 2010.

Samsung is Asia’s biggest maker of computer chips, flat- screen televisions and mobile phones.

The case is In the Matter of Certain Flash Memory and Products containing same, 337-685, and Spansion’s case against Samsung and the electronics makers is In the Matter of Flash Memory Chips, 337-664, both at the U.S. International Trade Commission Washington).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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