No infringement

The International Trade Commission (ITC) issued a ruling in favour of China's Actions Semiconductor Co. Ltd in a patent infringement lawsuit filed by SigmaTel, a US-based semiconductor company.

According to the ruling issued on August 4, Actions' parts for music players did not infringe on SigmaTel's 6,366,522 patent. The victory comes after Actions had lost a previous case in which SigmaTel sued for patent infringement.

"(This) ruling heightens Actions' belief that all of its new products do not infringe on any disputed patents held by third parties," said Actions in a statement following the ruling.

The ruling does not affect the ITC's previous ruling that all of the accused Actions' products and firmware versions infringe on SigmaTel's 6,633,187 patent, SigmaTel said in a statement.

Texas-based SigmaTel, a market leader for portable MP3 player technology, filed a formal complaint with ITC against the Chinese competitor last March, saying that Actions Semiconductor had violated multiple SigmaTel patents in the design of System-on-Chip controllers for portable digital music player market.

SigmaTel has asked the ITC to grant all possible relief, including an exclusionary order, enforced by US Customs, prohibiting imports into the US of MP3 players that contain Actions' MP3 integrated circuits (ICs).

"Even after today's ruling, the ITC still believes all of Actions' products and firmware versions we previously accused of infringement still infringe one or more SigmaTel patents," says Ron Edgerton, chairman and chief executive officer of SigmaTel, in the statement. "Based on these previous infringement findings, the ITC still has a very firm basis from which to issue an exclusion order in September."

SigmaTel's statement added that the decision also does not affect the ITC's ruling that other versions of Actions firmware infringe on their patent.

The final ruling is expected by September 15, 2006. Until then, there will be no restrictions placed on the importation of Actions' integrated circuits.

SigmaTel said this ITC action is only a small part of SigmaTel's global intellectual property enforcement program, and it is also preparing to file border seizure actions in certain European countries and additional lawsuits in China.

Nan-Horng Yeh, chief executive officer of Actions, says, "In order to protect our intellectual property rights for ourselves and our customers, we are aggressively building our patent portfolio through both internal development and acquisition."

The latest billboard released by China Semiconductor Industry Association indicates that Actions took the first place among China's top 10 IC companies on the basis of sales in 2005. The company ranked third in the previous year.

Cashing in on the growing MP3 industry, Actions recorded sales of nearly 1.3 billion yuan (US$163 million) in 2005, which surged 174 per cent from 459 million yuan (US$57 million) in 2004. In 2003, the figure stood at only 46 million yuan (US$5.7 million).

(China Daily 08/14/2006 page9)