Spansion sues Samsung, seeks billions

BANGALORE Mon Nov 17, 2008 7:01pm EST

BANGALORE (Reuters) - U.S. chipmaker Spansion SPSN.O sued Samsung Electronics (005930.KS) for patent infringement and could seek billions of dollars in damages from the South Korean company, Spansion's CEO said.

"We're talking about billions of dollars for damages," Spansion Chief Executive Bertrand Cambou said in an interview with Reuters.

Cambou did not say how much the lawsuits would cost Spansion, but said Spansion planned to engage in cost-cutting measures -- including cutting nearly half of its staff in the next year and a half -- and pulling back on other projects.

The company, which began the year with about 10,000 employees, has cut about 1,000 jobs so far, and plans to bring the number of its employees to less than 5,000 employees in about 18 months, Cambou said.

Spansion said it filed one lawsuit with the International Trade Commission and the second with the U.S. District Court in Delaware. A draft copy of the Delaware suit obtained by Reuters listed Samsung and four U.S. subsidiaries as the defendants.

"Spansion is seeking the exclusion from the U.S. market of well over one hundred million MP3 players, cell phones, digital cameras and other consumer electronic devices containing Samsung's infringing flash memory components," the company said in a statement.

The draft ITC document has a long list of proposed respondents, including Samsung and its U.S. subsidiaries as well as companies which use the infringing Samsung products, including Apple Inc (AAPL.O), Asus S0283.MC, Kingston, Lenovo (0992.HK), PNY, Research in Motion RIM.TO, Sony (6758.T) (SNE.N) and Sony-Ericsson.

Spansion competes with market leaders Samsung and Japan's Toshiba Corp (6502.T) in the flash memory market.

The infringing technology accounted for more than $30 billion in Samsung's global revenues since 2003, Spansion said in a statement.

Spansion requested treble damages and an order barring the infringing products from entering the United States.

Flash memory allows a device to retain data even when its power is turned off.

Samsung declined comment.

Japanese electronics conglomerate Fujitsu Ltd (6702.T) owns about 11.4 percent of Spansion, while U.S. chipmaker Advanced Micro Devices (AMD.N) has an 8.7 percent stake, according to Thomson Reuters data.

Spansion shares rose 20 cents to $0.50 in trading after the bell.

(Additional reporting by Diane Bartz in Washington; Editing by Jarshad Kakkrakandy)

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