Samsung sues Sandisk in flash patent squabble

Electronic News, Oct 16, 1995 by Andrew MacLellan

San Jose, Calif.--Unable to settle a dispute involving the manufacture of NAND EEPROM flash memory products, Samsung Semiconductor filed suit in federal court charging flash memory designer SanDisk with patent infringement and harassment.

As stated in a complaint filed Oct. 3 by Samsung in U.S. District Court here, the allegations stem from an ongoing dispute in which SanDisk first accused Samsung of violating five patents while manufacturing on one or more EEPROM products. According to Samsung legal counsel William L. Geary Jr., SanDisk--known at the time as SunDisk--raised the issue of patent infringement with his client in March. After a series of meetings failed to resolve the issue, Mr. Geary said SanDisk began to spread word of the alleged violation to "present and potential" Samsung customers.

Samsung's complaint states the SanDisk action was "made with the express intent to intimidate Samsung's customers and discourage those customers from purchasing Samsung's products" and seeks both punitive and compensatory damages for potential lost sales and damage to its reputation.

"It got to the point where SanDisk was contacting our customers and really interfering with our business, and we felt strongly that we don't infringe the (SanDisk) patents," Mr. Geary said. "Flash memory covers a very broad range of technology, and our technology is very different from that used by SanDisk."

The $63.85 billion Korean semiconductor manufacturer countered SanDisk's claim of patent infringement with charges of its own for which it is seeking triple damages. Samsung alleges its '358 and '023 patents, both issued in 1980, are being violated by SanDisk: a patent for PROM decoder circuitry which increases the programming speed of memory devices and one for technology which assists in the manufacture of a self-aligned, silicon-gate field effect device. Samsung has also asked the court to render a declaratory judgment on the five SanDisk-held patents but will request no formal, monetary settlement until a full accounting of actual and projected losses has been conducted.

When interviewed last week following SanDisk's announcement of a new de facto standards group for its flash memory technology (see story, page 1), SanDisk president and CEO Eli Harari declined to comment on the lawsuit.

Attorneys for SanDisk issued a written statement denying the charges, saying in part: "The company believes that it does not infringe any valid claim of the Samsung patents. Moreover, SanDisk intends to vigorously enforce its patents against Samsung."

SanDisk is in the process of re-aligning itself as a publicly traded company and is going through a "quiet period" prior to its initial public offering. A U.S. District Court clerk said as of last Thursday afternoon SanDisk had not filed a written response to the Samsung complaint.