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Toshiba and Hynix achieve patent peace

A cross-licensing agreement and supply deal put an end to a long-running legal dispute over NAND chips for flash memory.

Japan's Toshiba and South Korea's Hynix Semiconductor said Tuesday that they signed a cross-license deal to end a string of suits and countersuits on patents for NAND flash memory chips.

The two companies said Hynix would also supply Toshiba with NAND memory chips, used in digital cameras and portable music players such as Apple's iPod, but declined to give further details.

Analysts said Hynix could also provide Toshiba with specialty DRAM, which Toshiba does not produce.

The two companies have been locked in legal disputes in the United States and Japan since Toshiba, the world's No. 2 NAND chipmaker, first sued Hynix in November 2004 after the companies failed to extend a cross-licensing agreement.

"The resolution is good news for Hynix as it helps Hynix to cut back on provisions it set aside for litigations," said Song Myung-sup, an analyst at CJ Investment and Securities.

Last December, the U.S. International Trade Commission dismissed Toshiba's suit seeking to stop U.S. imports of Hynix flash memory chips. Toshiba had appealed the decision at the U.S. Court of Appeal for the Federal Circuit on Dec. 29.

In November, an ITC judge had dismissed a countersuit by Hynix to halt Toshiba imports. That decision was subject to review by the full trade commission.

The two companies declined to provide details on the length of the new cross-license agreement, only that it was "long-term."

The last cross-license agreement, signed in August 1996, expired at the end of 2002.