TI LOSES APPEAL OVER PATENT

Top court chip ruling favors Fujitsu

The Supreme Court on Tuesday rejected an appeal by Texas Instruments Inc. of the United States that accused rival Fujitsu Ltd. of patent infringement.

The top court upheld lower court rulings favoring Fujitsu, effectively making the Japanese firm victorious in the case.

The lawsuit was filed in 1991 by Fujitsu, which sought court confirmation that its chip making technology does not infringe on TI’s patent on the designing of integrated circuits, which is based on the so-called Kilby patent.

At issue was TI’s Kilby 275 patent, for which Texas Instruments had demanded Japanese chip makers pay a greater licensing fee. Fujitsu was the only firm that refused to do so.

At the time it was filed, the suit was seen as symbolic of the raging battles between Japanese and U.S. firms over property rights. The Tokyo District Court ruled in favor of Fujitsu in 1994, and the Tokyo High Court upheld the ruling in 1997. Tuesday’s ruling brings to an end one of the most high-profile lawsuits in the high-tech sector.

In rejecting TI’s appeal, the Supreme Court said the company’s patent is likely to be judged invalid in the future because the technology concerned is effectively the same as that protected by the original Kilby patent, which has been annulled.

It is not permissible to seek damages or take other legal action based on such a patent, the court said.

Kazunari Shirai, managing director of Fujitsu, said, “We are pleased to know that the company’s semiconductor products which have adopted standard techniques for integrated circuits do not infringe on the Kilby 275 patent.”

A spokesman for Texas Instruments Japan Ltd., a Japanese subsidiary of TI, said, “It is regrettable that the appeal was rejected. But we don’t believe the ruling will cause us serious damage as other patents are also involved in contracts with other companies.”

In addition, Judge Toshihiro Kanatani corrected the basis for past rulings that stated that the Patent Office alone could determine whether a patent was void.

“In the event the courts can determine that there is clear reason to believe a patent is invalid, they may reject its application,” he said.

In the past, legal disputes regarding patents were often protracted because the principle that the Patent Office must first determine the effectiveness of the patent in question kept real court debate from progressing.

Tuesday’s ruling paves the way for more speedy court proceedings in such cases, observers said. It may also indirectly affect similar patent disputes still pending in court.