FinFet patent dispute: Texas court imposes $400 million fine on Samsung

Samsung Electronics Co was told to pay $400 million after a federal jury in Texas said it infringed a patent owned by the licensing arm of a South Korean university. Samsung pledged to appeal.

Qualcomm Inc and GlobalFoundries Inc also were found to have infringed the patent but weren’t told to pay any damages to the licensing arm of the Korea Advanced Institute of Science and Technology, one of South Korea’s top research universities.

The dispute centers on technology known as FinFet, a type of transistor that boosts performance and reduces power consumption for increasingly smaller chips. KAIST IP US, the university’s licensing arm, claimed in its initial complaint that Samsung was dismissive of the FinFet research at first, believing it would be a fad. That all changed when rival Intel Corp started licensing the invention and developing its own products, according to KAIST IP.

Samsung, the world’s largest chipmaker, told the jury that it worked with the university to develop the technology and denied infringing the patent. It also challenged the validity of the patent.

Samsung’s infringement was found to be “willful,” or intentional, meaning the judge could increase the damage award to as much as three times the amount set by the jury. The company said it was disappointed by the verdict.

“We will consider all options to obtain an outcome that is reasonable, including an appeal,” Samsung said in a statement.

The technology is key to the production of modern processors used in mobile phones. GlobalFoundries and Samsung manufacture chips using the technique. Qualcomm, the largest maker of chips used in phones, is a customer of both companies. The companies put on a joint defense.

The case marked a clash between South Korea’s top research-oriented science and engineering institution and a company that’s critical to the country’s economy.

Lawyers for KAIST IP declined to comment on the verdict. While the institute is in Korea, KAIST IP is based in the Dallas suburb of Frisco, Texas, and it filed the suit in Marshall, Texas, -- a venue considered particularly friendly to patent owners.