Toshiba, Hynix sign flash licensing pact

Agreement puts an end to several lawsuits and could help restore calm to market

Hynix Semiconductor and Toshiba have agreed to share licenses for using one another's semiconductor patents, putting an end to several lawsuits, Hynix said Tuesday.

The agreement settles patent-infringement cases that were pending in Japan and the U.S., including one before the U.S. International Trade Commission in which Toshiba sought to halt the import of certain Hynix flash memory into the U.S.

Hynix, of Korea, is the world's second-largest vendor of DRAM memory chips, trailing only Samsung Electronics. As recently as 2004, Toshiba was also a major flash producer, but has since fallen out of the top 10. Flash memory and DRAM components are crucial in consumer electronics, storing the music on portable MP3 players and the data on smartphones.

In March 2006, a Japanese court awarded Toshiba damage payments from Hynix and an injunction against the sale of certain memory chips. The intellectual property case between the companies began in December 2004 when Toshiba alleged that Hynix had violated its patents on NAND-type flash memory chips. The two companies had failed to agree on terms for renewing a patent cross-licensing agreement they had shared from 1996 until 2002.

By ending their litigation, both companies can now focus on strengthening their respective businesses, said Toshiba Corporate Vice President Shozo Saito in a statement. Hynix said it could even be working with Toshiba again soon, calling the agreement "a good foundation for our two companies to build a mutually beneficial business relationship in the future," according to a statement by OC Kwon, senior vice president for Hynix.

Settling the lawsuits could also help restore calm to a market that has been roiled in recent years by government indictments. Both Hynix and Samsung have paid heavy fines as part of an investigation of price-fixing by the U.S. Department of Justice that has levied fines and indictments on four companies and 18 people since 2003.

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