Cypress reports break down of talks regarding alleged GSI patent infringements

SAN JOSE, USA: Cypress Semiconductor Corp. said that negotiations with GSI Technology Inc. regarding the alleged infringement of Cypress’s SRAM patents by GSI have ended without a resolution.

In June, Cypress filed a complaint with the International Trade Commission alleging infringement by GSI of four of its SRAM patents. The complaint seeks an exclusion order from the ITC that would prevent the importation of all infringing GSI SRAMs. The ITC requires disputing companies to meet three times before the trial. Cypress’s comments came in the wake of the first of these meetings.

“Talks between Cypress and GSI broke off last week without any progress,” Cypress president and CEO T.J. Rodgers said in an extended statement. “Nothing short of structural change – an agreement by GSI management to immediately stop selling products that infringe on Cypress’s intellectual property – will enable us to get this matter settled.

“GSI’s investors, and its board of directors, must be aware that GSI’s revenue stream is at serious risk,” Rodgers said. “The ITC trial is scheduled to begin in mid-2012. It is important to note that the ITC cannot award damages. If the ITC rules that GSI has used infringing IP, its only remedy is an exclusion order – an immediate ban on the importation of products that contain infringing GSI technology into the U.S. Such a ban would have an immediate and traumatic impact on GSI and its customers that use the infringing technology.”

“A substantial portion of GSI’s revenue comes from SRAM products that infringe multiple Cypress memory cell, circuit and architectural patents,” said Dana Nazarian, executive vice president of Cypress’s Memory Products Division. “The infringement, we will prove, is broad, deliberate and blatant.”

Cypress also filed a complaint with the Minnesota District Court in March, alleging that GSI’s SigmaQuad-II, SigmaQuad-III and SigmaDDR SRAMs infringe on its SRAM patents. Cypress filed its ITC complaint after it became clear that GSI was not willing to discuss a meaningful, structural settlement of the district court case. The ITC process required Cypress to name known importers and users of the alleged infringing GSI products. This list, which originally contained 10 companies, has recently been reduced to eight.

“Cypress’s first core value, found on every floor of every Cypress building worldwide, is that we thrive on competing against the world’s best,” Rodgers said. “I was shocked to find out that GSI, a very strong competitor of ours, had built their portfolio of SigmaQuadTM products on Cypress’s intellectual property. In effect, they pilfered our IP in order to compete against us in the marketplace, rather than spend the millions of dollars in R&D required to build high-speed networking SRAMs.”