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April 12, 2006 12:56 pm

Toshiba and Matsushita challenged over patents

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Two of Japan?s leading electronics groups faced legal action in the US on Wednesday, reflecting a high-stakes battle over intellectual property rights in the fiercely competitive industry.

Lexar, the US memory card maker, has asked the International Trade Commission in the US, which examines trade practices and patent violations, to ban imports of Toshiba?s Nand-type flash memory chips which it claims infringe its patents.

The move by Lexar, which is being acquired by MicronTechnology, is the latest in a continuing legal battle over intellectual property between the two groups that goes back to 2002, when they filed lawsuits against each other in California.

Toshiba is a pioneer of Nand flash memory chips and the world?s second largest maker of the semiconductors, which are enjoying strong growth on the back of demand from manufacturers of portable digital products such as cameras.

The Japanese group said it could not comment because it had not seen the complaint. Toshiba?s shares fell nearly 3 per cent to Y708 in Tokyo on Wednesday.

Separately, South Korea's Samsung SDI said it had filed a lawsuit against Matsushita Electric Industrial in the US, seeking to nullify the Japanese flat panel maker's patents.

The latest suit filed earlier this month has escalated the spat between the two rivals over intellectual property rights, as they jostle for a bigger share of the fast-growing plasma display panel market.

The two groups entered negotiations in 2004 after Matsushita claimed that Samsung SDI was infringing its patents. But they failed to reach an agreement and broke off the talks in late 2005.

The Korean company then filed a lawsuit against Matsushita in the US, and Matsushita quickly counter-sued.

In the latest move, Samsung is seeking a US court ruling that the patents are invalid, to ensure that it does not have to pay royalties to its Japanese rival, a company spokesman said.

Samsung SDI is to spend Won730bn on another PDP production line in Ulsan to reclaim the top spot as the world's biggest PDP maker. Its market share stood at 26.7 per cent in the fourth quarter, behind Matsushita's 28 per cent and ahead of LG Electronics' 25.6 per cent, according to Display Search, a market researcher.

Plasma TV sales are expected to increase by 63 per cent this year to 7.5m units, according to researcher iSuppli, as consumers replace bulky cathode ray tubs with slimmer flat screen TVs.?

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