SEOUL (AP)

Hynix Semiconductor of South Korea and Japan's Toshiba have declared an end to their legal battles, signing agreements to share semiconductor patents and products.

The two companies have been embroiled in litigation over NAND flash memory chips, used in digital products such as cameras, music players, personal digital assistants and memory cards, for more than two years.

Toshiba, which dominates international patents for NAND, first sued Hynix in November 2004 in both the United States and Japan, claiming infringement of its intellectual property.

Tokyo-based Toshiba said at the time that the companies were negotiating an extension of a licensing agreement ahead of its expiration in December 2002, but failed to agree on a fee, leading to the lawsuits.

Companies that manufacture chips based on Toshiba's patents must pay royalties to it.

"The agreements settle all pending patent-related litigation between the companies in the US and Japan, including that before the US International Trade Commission," the companies said in a joint statement released by Hynix.

Hynix and Toshiba said that the agreements, covering patents and product supply for semiconductor technology, mean they "will be cross licensed to use one another's semiconductor patents".

The International Trade Commission, an independent government agency that investigates alleged violations of US international trade laws, last month granted a request by Toshiba to investigate the import and sale of NAND chips made by Hynix.

Toshiba had requested that the ITC bar the NAND chips from being imported into the United States.

"With litigation behind us, and through these agreements, we can now strengthen our respective businesses," Toshiba vice president Shozo Saito said in the statement.

James Kim, head of investor and public relations at Hynix, declined to divulge details of the supply agreement, other than to say that "certain kinds of products would be shipped to Toshiba" for which the Japanese company will pay market prices.

Hynix also will still pay royalties to Toshiba for its patents, he said.

Under the agreement, Toshiba will get a cross-licensing fee from Hynix, said Keisuke Ohmori, a Toshiba spokesman in Tokyo. He declined to provide an amount or say how that differs from royalty payments.

Toshiba, like South Korean rival Samsung Electronics, manufactures not only consumer electronics but also components such as memory chips. Hynix only manufactures memory chips.

Lee Min-hee, a semiconductor industry analyst at Dongbu Securities in Seoul, estimated that Hynix's royalty payments to Toshiba last year amounted to five per cent of its NAND sales revenue of $US2.4 billion ($A3 billion).

Lee said the agreement is likely to benefit both companies.

"As Hynix expands its NAND flash operations aggressively Toshiba's royalty income will grow," he said.

The Toshiba-Hynix dispute is not the only legal tussle involving technology companies from the two countries as they have sought to protect their interests in digital and other high-tech consumer electronics.

In one case, Matsushita Electric Industrial Co. in November 2004 went to court seeking to halt Japan sales of plasma screens made by LG Electronics Inc., claiming the South Korean company was infringing on its patents.

The two companies settled their dispute by signing a cross-licensing agreement in April 2005.
21/03/2007 11:10:33 AM