InterDigital Inc (IDCC)

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DJ China's Netac Sues U.S. PNY Tech Over Flash Memory Patent

SHANGHAI (AP)--Chinese flash-memory products maker Netac says it has filed a lawsuit against U.S. rival PNY Technologies (PNY.XX) for alleged infringements of one of its patents - in a rare instance of a Chinese company pursuing piracy charges overseas.
The lawsuit, seeking unspecified "significant financial damages," was filed Feb. 10 in the Eastern District Court in Texas, the Chinese company said in a statement Friday on its Web site.
Netac, based in the southern high-tech hub of Shenzhen, asked the court to suspend sales of PNY's flash-memory storage devices.
"We want to get fair competition in the United States, while Netac is expanding its presence in the overseas market," Deng Guoshun, president of Netac, said in the statement.
Calls to PNY's headquarters in Parsippany, New Jersey, seeking comment weren't answered after hours.
Netac, a company founded by Chinese who returned to the country after studying and working overseas, is a leading maker of mobile storage and digital devices.
The company says its founders invented the world's first mobile flash memory drive using a USB interface in 1999 and obtained a China patent for their technology in 2002. The U.S. patent for the invention was granted in 2004, Netac says.
Netac has successfully sued several Chinese companies for alleged patent infringement. A case against Japanese electronics giant Sony Corp. (SNE) hasn't yet been decided, the state-run newspaper China Daily reported Friday.
Although Chinese companies often face allegations of patent and copyright violations due to rampant commercial piracy inside China, they rarely have brought charges against foreign competitors.
The situation is changing, however, as Chinese companies become increasingly aware of the value of protecting their own inventions and technologies.
"We have spent a huge amount of money and energy on research and development, so we hope other makers will honor our intellectual property rights," the China Daily quoted Deng as saying.
The report noted that Netac's patent application raised protests from 19 other international manufacturers because of its broad applications across a wide variety of products. About 10 companies have licensed the technology from Netac, including Samsung Electronics (005930.SE) of South Korea, the report said.
Netac reported sales of more than 3 million flash-memory devices in 2005, though revenues were lower than US$100 million, it said.

-Edited by Clarissa Tan

(END) Dow Jones Newswires
02-17-06 0139ET
Copyright (c) 2006 Dow Jones & Company, Inc.