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Chip ban ripple effect hits OEMs

Posted: 06 Jul 2009 ?? ?Print Version ?Bookmark and Share

Keywords:chip ban? Tessera patent infringement? microcontroller?

Systems makers may be beginning to feel the bite of a limited exclusion order banning the import of chips from six companies found to infringe two packaging patents of Tessera Technologies Inc.

"We were told we can't get the Freescale MCF5282 after July 17 for at least a year due to patent infringement," said an engineer from Nordson Corp. in an email to EE Times. "This is causing quite a ruckus in engineering," he said.

Nordson uses the Freescale chip, a Coldfire microcontroller, in an industrial controller used primarily on packaging lines to control adhesive deposition. The company was informed by its contract manufacturer in Ohio about the issue sourcing the part.

A Freescale spokesman said the shipments in question do relate to the U.S. International Trade Commission's order banning imports of certain products found to infringe two patents of Tessera.

"Freescale is working with customers to receive delivery of any products impacted by the decision in compliance with the ITC's order," the spokesman said. "Freescale has not infringed Tessera's patents as alleged [and] the company expects this ruling to have minimal impact to our business operations," he added.

The ITC's order actually went into effect May 20. However, it is under a standard 60-day Presidential review until July 20, and affected companies can post a bond allowing them to import infringing devices during that period.

Affected companies include ATI Technologies (now part of Advanced Micro Devices Inc.), Freescale Semiconductor, Motorola Inc., Spansion LLC and STMicroelectronics NV and Qualcomm Inc. Freescale and Qualcomm have posted the bond to allow imports, said a Tessera spokesperson.

A Qualcomm spokeswoman said the company moved its packaging operations to Amkor in anticipation of the ruling. Amkor has a license for the Tessera patents.

July 20, any affected chips will be banned. However, companies charged with infringement will be able to appeal the decision to the U.S. Federal District Court of Appeals. They can also request the court stay the import ban which is primarily aimed at stopping imports of chips rather than systems using them.

The ITC's decision said the six companies infringe Tessera's '326 and '419 patents. The companies can continue to import the chips if they negotiate a license from Tessera.

The government has not yet developed a full list of products it would put on a watch list with customs officials if President Barack Obama does not stop the ban from going into affect. However, a general discussion of the types of products that could be banned is available online.

The Nordson engineer elaborated on his situation with the potentially banned Freescale chip in a follow up email:

"If we don't get a year's worth of parts in by the middle of the month, our high-end controller production will be shut down.

"Currently, we are planning on buying a year's worth of parts immediately. I've asked our legal department to make sure there will not be any issues with selling the boards that have the banned CPU's, but I don't think there will be. I also suspect that there will be a rush on the banned parts so obtaining more by the deadline might be difficult.

"I verified this story with our local Future and Arrow offices, though the exact details are a little fuzzy for most of the people involved. I talked to Freescale's regional sales manager and he said he could not comment on the situation. One distributor said that some of the other companies affected by the ruling have not even notified their customers that there is a looming ban," the engineer said.

- Rick Merritt
EE Times

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