December 23, 2010 / 8:50 PM / 9 years ago

UPDATE 1-Spansion loses US chip patent fight with Samsung

* Spansion share price down following decision

* Spansion had sued Samsung, Apple, others

* Alleges violation of flash memory chip patents (Adds share price, background on dispute)

By Diane Bartz

WASHINGTON, Dec 23 (Reuters) - South Korean chipmaker Samsung Electronics Co Ltd (005930.KS) and several companies that use its chips do not infringe two Spansion Inc CODE.N flash memory chip patents, the International Trade Commission said on Thursday.

Spansion’s share price dropped to $19.60 shortly after the ruling but quickly recovered and was soon trading above $20 per share again. In late afternoon trading, it was at $20.25, up 8 cents for the session.

If infringement had been found, numerous products made by Apple Inc (AAPL.O), Research in Motion Ltd RIM.TO and other companies could have been barred from importation into the United States.

The International Trade Commission is an independent body that, among other duties, hears patent disputes involving imported products.

Spansion, which emerged from bankruptcy in May, was once the global leader in a type of flash memory called NOR, which is used for storing code that runs devices.

Unlike older chips, flash memory chips can store data like telephone numbers and music recordings even when the device’s power is turned off. Flash memory is found in most consumer electronics.

Spansion accused Samsung of manufacturing chips that infringe its flash memory patents. It also accused companies that bought Samsung chips — including Apple and Research in Motion — of infringement.

In a complaint filed in November 2008, Spansion also targeted Hon Hai Precision Industry Co Ltd, which manufactures for Apple; ASUSTeK Computer Inc (2357.TW); Kingston Technology Co; Lenovo Group Ltd’s (0992.HK) Lenovo (Singapore) Pte Ltd; PNY Technologies Inc; Research In Motion; Sony Corp’s (6758.T) Sony Electronics Inc; Transcend Information Inc (2451.TW); and Verbatim Corp.

Spansion filed a companion lawsuit in Delaware to try to win monetary damages.

In September, the ITC agreed to hear a similar complaint filed by Spansion that involved different flash memory patents. That lawsuit named as respondents Apple, Nokia NOK1V.HE, Samsung, Research in Motion and others. A related action has been filed in U.S. district courts in California and Virginia.

Spansion filed for bankruptcy protection in March 2009 as global chipmakers struggled with the sector’s worst downturn in decades. It emerged from bankruptcy in May.

Spansion says it lost about 10 points of market share during its year in bankruptcy but hopes to gain that back. In late October, the company reported $307.6 million in third-quarter sales. It predicted fourth-quarter sales would be between $315 million and $330 million. (Editing by Gary Hill)

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