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Samsung to pay Spansion for patent licences at litigation ends

20 June 2011 | By Mark Osborne | News > Fab Management

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An agreement has been reached between Spansion and Samsung Electronics over a long-running patent dispute. Under the terms of the agreement, Spansion and Samsung have agreed to a seven year cross license of each other's patent portfolios.  As part of the overall agreement, Samsung will pay Spansion US$150 million over five years with an initial payment of US$25 million due in August 2011.

"This agreement benefits both companies in many ways," said John Kispert, president and CEO of Spansion.  "Most importantly for Spansion, it establishes a solid foundation from which to grow our licensing business, which offers licenses to our extensive patent portfolio in addition to making certain strategic technologies available for licensing to the industry."

"The real winners here are Spansion's and Samsung's customers," said Dr. Seung Ho Ahn, executive vice president and the head of Samsung Corporate Intellectual Property Center.  "After many years of disruptive court time, we were able to find a way to resolve our differences and reach agreement on balanced terms."

Spansion has agreed to purchase Samsung's bankruptcy claim for US$30 million, which Samsung has elected to apply against the first US$30 million Samsung owes Spansion.  Provided that the bankruptcy court approves the claim Spansion could retire between 1.65 million and 1.85 million shares outstanding.

After the initial payment by Samsung to Spansion, the settlement will result in 20 quarterly payments of US$6.25 million starting in fiscal fourth quarter of 2011.

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