Spansion and Samsung announce patent litigation settlement and cross-licensing agreement

SUNNYVALE, USA & SEOUL, SOUTH KOREA: Spansion Inc. and Samsung Electronics Co. Ltd announced that they have agreed to settle all ongoing patent litigation and disputes, including their respective investigations with the US International Trade Commission.

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 $150 million over five years with an initial payment of $25 million due in August 2011 and 20 quarterly payments of $6.25 million starting in fiscal fourth quarter of 2011.

In addition, Spansion has agreed to purchase Samsung's bankruptcy claim for $30 million, which Samsung has elected to apply against the first $30 million Samsung owes Spansion. Provided that the 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.

Both Spansion and Samsung said they are pleased to resolve their differences and move forward.

"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 VP and 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."