Taiwan chip maker files pre-emptive suit

Taiwan Semiconductor Manufacturing, the world's largest contract chip maker, has filed a pre-emptive suit in a US court in a bid...

Taiwan Semiconductor Manufacturing, the world's largest contract chip maker, has filed a pre-emptive suit in a US court in a bid to invalidate technology patents held by a Chicago company.

TSMC filed the suit after learning from lawyers at Syndia that the smaller company planned to file infringement suits based on two of its patents. Syndia has sent letters to TSMC customers requesting payment of a "lump sum licensing offer" to cover use of the patents, according to a TSMC statement yesterday.

TSMC did not say which of its customers received the letters. It produces chips under contract for companies without fabrication plants or which need additional supplies. Customers include Nvidia, Texas Instruments and Qualcomm. The company is expected to account for about 44% of the total foundry market in 2003, according to an estimate from Salomon Smith Barney.

TSMC said it filed the lawsuit to protect its customers. It seeks declaratory judgement that two of Syndia's patents are invalid, unenforceable and are not infringed upon by TSMC. TSMC also accused Syndia of trying to interfere with its customer relationships.

The patents in question were filed with the US Patent Office in 1957 and 1964 and issued in 1987 and 1992, according to TSMC. It said the patents were "allegedly" assigned to Syndia in 2001.

James Niccolai writes for IDG News Service

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