Globalfoundries and TSMC make global cross-licence agreement

After a short but intense dispute with patent lawsuits filed on both sides, the computer chip manufacturers Globalfoundries and TSMC have reached a worldwide settlement. This was announced by the two companies today.

29 October 2019 by Mathieu Klos

Globalfoundries and TSMC Globalfoundries and TSMC have agreed on a global licence, ending all disputes and claims ©gen_A/ADOBE STOCK

Globalfoundries and TSMC clashed in late summer when Globalfoundries sued the Taiwan Semiconductor Manufacturing Company (TSMC) in the US and Germany over 16 patents. At the end of September, TSMC fought back with suits concerning 25 patents.

But the suits are history, before the court heard even one case. The manufacturers have announced the creation of a global cross-licensing agreement. This includes all of the current patents held by the two companies, as well as any other patents filed in the next ten years.

Globalfoundries and TSMC are also withdrawing all claims worldwide. This includes actions against customers.

First strike by Globalfoundries

At the end of August, Globalfoundries filed patent suits against its Taiwanese competitor. This included 19 of TSMC’s major customers and downstream electronics companies. The list of defendants includes such prominent names as Apple, Broadcom, Cisco, Google, Motorola, Nvidia and Qualcomm.

Globalfoundries accuses TSMC of infringing 16 patents with its chip manufacturing process. These protect manufacturing processes with structure widths of 7, 10, 12, 16 and 28 nanometres.

The US company filed the lawsuits with the US International Trade Commission (ITC), the US Federal District Courts in Delaware and the Western District of Texas. The company has mainly directed its US lawsuits against TSMC. However, in Düsseldorf, Globalfoundries is suing Apple’s US parent company and Qualcomm over three patents.

Similarly, in Mannheim, Globalfoundries has filed suits against Apple’s German distributor over three patents, and EBV Elektronik over two patents. EBV is a German wholesaler of electronic components and a subsidiary of Avnet.

Counterstrike by TSMC

Only five weeks after Globalfoundries filed suits in Mannheim, TSMC sued Globalfoundries in Germany, Singapore and the US for infringing a total of 25 patents. According to TSMC, Globalfoundries was infringing the patents with its 40nm, 28nm, 22nm, 14nm, and 12nm node processes.

TSMC claimed that four patents had been infringed in Germany. It enforced all four patents in Mannheim, and two patents in Munich.

Dietrich Kamlah, Taylor Wessing, Globalfoundries and TSMC

Dietrich Kamlah

In total, ten patents were in dispute between the two competitors at German courts.

Since none of the suits on either side have been successful up to now, the settlement is likely an attempt to de-escalate the dispute and avoid lengthy litigation. According to sources, further lawsuits were in the pipeline.

Over too quickly

For the lawyers, the settlement between Globalfoundries and TSMC may not come as a surprise. Both sides prepared intensely for the lawsuits. However, now the dispute is over before it had really begun. It had the potential to become one of the world’s most comprehensive patent litigation cases of the last ten years, with numerous co-litigants. This made the case particularly interesting and lucrative for the legal industry.

Marcus Grosch, Quinn Emanuel, Globalfoundries and TSMC

Marcus Grosch

Globalfoundries filed a suit in Germany with the help of a team around Dietrich Kamlah from Taylor Wessing, and the patent attorneys at Zimmermann & Partner. It is now also known that Taylor Wessing teamed up with patent attorneys from Wuesthoff & Wuesthoff to defend the company against the suits from TSMC.

A few weeks ago it became known that TSMC was being advised in Germany by a team around Marcus Grosch from Quinn Emanuel Urquhart & Sullivan.