TIPS^®  Taiwan Intellectual Property Special

China Updates

US-Based UniRAM Accuses TSMC of Infringement; US$30.5 Million Of Compensation Sentenced

For the trade secret case in which US-based UniRAM has accused TSMC of misusing its proprietary embedded memory, the United States Federal District Court in San Francisco convicted TSMC of misusing and ruled TSMC to pay US$30.5 million (approximately NTD 1 billion) in compensation on Sep. 26. TSMC said it would take appeal.

Founded in 1998 and headquartered in California, UniRAM mainly provides IC design services and authorizes DRAM solutions. Its nature of business is similar to US-listed MoSys and Taiwan eMemory. But MoSys mainly owns monocrystal dynamic random access memory (1T Embedded DRAM) patents and eMemory mainly owns embedded flash patents. UniRAM has not issued shares yet and its operating scale is not large.

In recent years, it has become a trend to build in DRAM components in high-end graphics chips. TSMC has also invested much funds and manpower in research and development of embedded flash process; in March 2007 it announced the successful cooperation with NVIDIA in trial production of 65 nm embedded memory and in August announced Microsoft's Xbox 360 adoption of 90 nm embedded DRAM process. But recently, American UniRAM issued a statement with regard to TSMC’s misappropriation of trade secret for embedded dynamic random access memory (Embedded DRAM) design and filed a lawsuit with Federal Court in San Francisco against TSMC. After a two-week trial, the court convicted TSMC to compensate US$30.5 million.

In response to the verdict, TSMC indicated that, as of the first half of 2007, it has held cash of more than RMB100 billion. As a result, the amount of compensation has limited impact on TSMC. Most importantly, TSMC has always held itself to the highest standards of respect for intellectual property, so that TSMC deems the jury's ruling on the case erroneous and will soon take appeal to protect its own interests.