Bloomberg News

MIT, UMD Want Approval to Sue Bankrupt Elpida Over Patent

September 26, 2012

The Massachusetts Institute of Technology and University of Maryland seek court permission to sue Elpida Memory Inc. over alleged patent infringement that could jeopardize the bankrupt memory-chip maker’s ability to produce and import products in the U.S.

The schools want U.S. Bankruptcy Judge Christopher Sontchi to lift the so-called automatic stay that shields bankrupt companies from litigation so they can pursue a lawsuit against Elpida in federal court, according to court documents filed today in Wilmington, Delaware.

Since at least 2004, Elpida has been misappropriating its invention -- certain methods for cutting links between interconnected electrical circuits with a laser -- to make its memory chips, MIT and UMD argue in court papers.

The patent claims “could significantly impact” Elpida’s “ability to produce and import DRAM products into the United States,” lawyers for the schools said in court papers. Elpida and Micron “have indicated these capabilities lie at the heart of the debtor’s proposed sale.”

The Tokyo-based chipmaker, which makes dynamic random access memory chips, has agreed to sell the company to Boise, Idaho-based Micron Technology Inc. (MU:US) for about 200 billion yen ($2.5 billion) as part of the reorganization.

U.S. sales generated about 11 percent of Elpida’s 2011 revenue, according to data compiled by Bloomberg.

Damages resulting from the alleged infringement are “quite significant,” the schools said in court papers, without giving an estimate. The U.S. Patent and Trademark Office reexamined the patent earlier this year and confirmed the invention’s patentability.

Japan Bankruptcy

Elpida, the last Japanese maker of computer-memory chips, filed for bankruptcy reorganization in Japan in February, listing debt of about 448 billion yen ($5.4 billion). A month later the company sought protection under Chapter 15 of the U.S. Bankruptcy Code, which allows foreign companies reorganizing abroad to protect their assets from creditors and lawsuits in the U.S.

Giorgio Bovenzi, a lawyer representing Elpida in the U.S. bankruptcy case, declined to comment on MIT and UMD’s request.

The case is In re Elpida Memory Inc., 12-10947, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To see the patent, click: 6,057,221.

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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