Fri, Jan 06, 2012 - Page 11 News List

Elan, Apple drop lawsuits, change to cross-licensing

TECHNOLOGY WAR:The settlement ends more than two years of disputes between the Taiwanese and US companies over multi-point touch technology patents

By Kevin Chen  /  Staff Reporter

Elan Microelectronics Corp (義隆電子) and Apple Inc have agreed to put an end to all patent-infringement litigation against each other and to cross-license patents related to multi-point touch panel technology.

Elan, a Taiwanese manufacturer of chips and touch screens, said it and the US maker of the popular iPod, iPhone, iPad and MacBook agreed to drop all pending patent lawsuits on multi-touch technology, according to a stock exchange filing yesterday.

Elan declined to disclose the details of the settlement, citing confidentiality. However, the Taiwanese company said Apple had agreed to pay US$5 million as part of the settlement, according to the filing.

Shares of Elan rose 1.57 percent to NT$25.85 on the Taiwan Stock Exchange, before the company’s announcement of the litigation settlement.

The settlement, which took effect on Tuesday, ends more than two years of disputes between Elan and Apple over multi-point touch technology patents.

In April 2009, Elan filed a lawsuit against Apple in the Northern District Court of California, alleging the US company’s products infringed its US patent Nos. 5,825,352 and 7,274,353. Apple countered in July 2010 by accusing Elan of infringing its US patent Nos. 5,764,218, 7,495,659 and 6,933,929. However, the US company withdrew its complaint against Elan over US patent No. 6,933,929 in May 2010.

In March 2010, Elan filed a complaint against Apple with the US International Trade Commission (ITC), alleging the US company’s products, including the iPhone, iPod Touch, iPad and MacBook, infringed its US patent No. 5,825,352.

The ITC started probing Elan’s complaint in April 2010, but ruled in favor of Apple in late June last year, saying Elan failed to show that Apple products infringed its patents.

While the ITC ruling has no binding effect on district courts, the two companies decided to drop the litigation at the California district court, which was scheduled to open on Feb. 27, and agreed to cross-license US patent Nos. 5,825,352; 7,274,353; 5,764,218; and 7,495,659, that were the subject of the dispute, according to yesterday’s filing.

Touch application made up about 30 percent of Elan’s gross revenue in 2010 and the company was on target to raise this to 50 percent last year, counting on rising demand from smartphone, tablet and laptop applications, the company said in April.

In the first 11 months of last year, the company’s consolidated revenue totaled NT$4.78 billion, down 15.14 percent year-on-year. Elan has yet to release its consolidated sales for last month, but yesterday reported that unconsolidated sales reached NT$421.9 million, which represents an increase of 11.33 percent from a year earlier.

For the whole of last year, the company’s unconsolidated revenue totaled NT$5.2 billion, down 13.47 percent from 2010, the company said in a separate exchange filing.

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