TSMC files pre-emptive suit to invalidate patents

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world’s largest contract chip maker, filed a pre-emptive suit in a U.S. District court Friday in a bid to invalidate technology patents, held by a Chicago company, that it said are being used against its clients.

TSMC filed the suit after learning from lawyers at Syndia Corp. 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 Monday.

Syndia, based in Chicago, wasn’t immediately available for comment. The company was founded in 1994 and develops technologies related to the material sciences that it licenses to third parties.

TSMC didn’t say which of its customers received the letters. It produces chips under contract for companies that don’t have their own fabrication plants or who need additional supplies, and customers include Nvidia Corp., Texas Instruments Inc. and Qualcomm Inc. The company is expected to account for about 44 percent of the total foundry market in 2003, according to an estimate from Salomon Smith Barney Inc.

TSMC said it filed the lawsuit in a bid 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 suit was filed in the U.S. District Court, Northern District of California, in San Jose by TSMC Ltd., TSMC North America and WaferTech LLC, a TSMC subsidiary.

The patents in question, numbers 4,702,808 and 5,131,941, were filed with the U.S. Patent Office in 1957 and 1964 by a Jerome H. Lemelson and issued in 1987 and 1992, according to TSMC. It said the patents were “allegedly” assigned to Syndia in 2001 through the Lemelson Medical, Educational and Research Foundation Limited Partnership.