Texas Instruments was never known as shy and retiring when it came to licensing its patents. So it’s no wonder that since former Texas Instruments’ IP lawyer Earle Thompson joined SanDisk as chief IP counsel in 2004, the flash memory company has gone on a patent-licensing rampage.
Just check out these numbers: In 2003, SanDisk brought in $97 million of its $1 billion in revenue from royalties and licensing. Last year, the Sunnyvale company brought in $500 million of its $3.3 billion from royalties and licensing. Percentage-wise, that’s a 50 percent increase, from not quite a tenth of total income to just over 15 percent.
But on Friday, Thompson and SanDisk suffered a setback in a patent infringement case in which they had sued 25 (you heard right) companies in the International Trade Commission. The ITC ruled Friday that four of those companies — Silicon Motion, Phison Electronics, Skymedi and Imation — didn’t infringe on SanDisk’s flash memory patents.
“This is big obstacle in their licensing program,” said Mike Bettinger, a K&L Gates lawyer who represented Silicon Motion.
Which other firms were on the winning side? Who’s the loser? Who’s gloating? Who’s only talking to us in prepared statements? All after the jump.
Bettinger worked on the defense with Phison’s lawyers from Fish & Richardson and Skymedi’s from Covington & Burling. On the losing end was Wilson Sonsini, which has long done IP work for SanDisk, and Jones Day.
SanDisk originally launched its 25-defendant attack in two separate suits in the ITC in 2007. It got judgments against six companies and forced several others to settle. But not everyone did.
“They thought they’d corner the industry,” Bettinger said. “Four or five companies cut a deal, but the rest of us said no way.”
SanDisk’s Thompson didn’t return a call seeking comment, but issued a prepared statement.
“SanDisk is disappointed by the Initial Determination of the Administrative Law Judge,” Thompson said in the statement. “We will continue to vigorously pursue actions against companies that use SanDisk’s patented technology without a license. SanDisk expects that the Initial Determination will not adversely impact existing licensing agreements or the royalties expected from those agreements.”
— Zusha Elinson