Transfer Pricing Associates

Victory for small semi-conductor manufacturer Itom

post Monday August 13, 2012

semiconductor photo 2

The small Dutch semi-conductor manufacturer, Itom, that employs no more than 20 people, initiated a case against smart phone, tablet and semi conductor manufacturing giants such as Apple, Dell, Samsung, Nokia, AT&T, Texas Instruments, Qualcom, Broadcom and Ford for patent infringement.

According to Itom, the mentioned multi-nationals have been using its patented technology without license agreements for years.

It is uncommon for small companies to engage in law suits against corporate giants due to the high time and financial costs involved. However, the Dutch company felt its case was strong enough and it pushed back against its corporage big brothers. They were awarded many millions of dollars in unpaid fees.

Despite the potentially exorbitant losses, it was the US patent law system that prompted Itom to sue the corporate giants. Additionally, the US’s no-cure no-pay rule ensured financial safety, only requiring the user to pay costs if they receive a favorable outcome, essentially eliminating any risk. The regulation makes it easier for smaller companies to sue larger companies without having to worry about the substantial costs involved. The defendant is also required to show and explain all relevant documents, including e-mail correspondance, making the case more transparent.

The EU on the other hand, does not have such favorable laws to protect the SME’s in such cases, preventing many similar cases from going to trial. 

Source: NRC

Image source: Exponent

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