Samsung to pay Spansion $150M in settlement

Spansion Inc. has announced that South Korea's Samsung Electronics Co. Ltd will pay them $150 million as part of a seven-year patent cross licensing agreement that settles all ongoing litigation between the two companies. The amount will be paid in a span of five years.

According to the agreement, Samsung will pay Spansion an initial payment $25 million in August 2011. Samsung will then pay 20 quarterly payments of $6.25 million starting in the fiscal fourth quarter of 2011 with the payments spanning five years.

However, the first $30 million of the payments will be wiped out by Spansion's purchase of Samsung's bankruptcy claim against Spansion.

Provided that a bankruptcy court approves the claim as requested, the purchase of Samsung's bankruptcy claim will enable Spansion to retire between 1.65 million and 1.85 million shares, the company said.

"After many years of disruptive court time, we were able to find a way to resolve our differences and reach agreement on balanced terms," said Seung Ho Ahn, executive vice president and the head of Samsung's corporate intellectual property center.

The settlement covers all ongoing litigation and disputes between Samsung and Spansion, including their respective investigations with the U.S. International Trade Commission and litigation in other venues, Spansion said.

In an interview with EE TimesMonday, Saied Tehrani, Spansion's chief technology officer, said Spansion is confident in its technology and won't make any changes based on the cross-licensing agreement with Samsung.

"We will continue doing our own things," Tehrani said. "We have the cross license if something comes up, but we don't intend to change any aspect of our technology going forward."

Since 2008, Samsung and Spansion have filed several patent infringement complaints against each other. Spansion first filed a complaint against Samsung in the ITC and in U.S. federal court in Delaware. An ITC action filed by Spansion against Samsung was set to go to trial Monday.

In February, a preliminary ruling by an ITC administrative law judge found that Spansion infringed on one patent held by Samsung. A final determination on that ruling is expected to be issued next week.

- Dylan McGrath
??EE Times