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Applevine: Run on Flash and New Patent Suit

Apple appears to have bought up large amounts of flash memory fueling a new round of iPhone 3.0 rumors.  The company was also hit with a new patent infringement lawsuit. In detail…

Memory orders are often monitored as potential indicators of consumer electronics production changes.  It’s not an exact science as companies routinely adjust inventory on parts to hedge against price fluctuations, or to satisfy demand,  still spikes in volume can be significant.

Apple has a contract to buy its flash memory chips from Samsung, Toshiba, Hynix, and Micron through 2010.

Think Equity Partners reported in February that Apple had bought up much of Samsung’s supply of flash memory. Digitimes reported today that Apple’s recently snagged another 100m 8Gb NAND Flash memory, mostly from Samsung as well.

Some are interpreting these buys as a sign that Apple is gearing up for production on the next generation (or a 32 GB model) of the iPhone. 

Is iPhone 3.0 on track for June or July?    Maybe, maybe not.

Last July, Apple did order 50 million similar 8Gb (Gigabit not Gigabyte) chips and those were ear marked for the current generation of the phone, according to reports.   

It’s possible the new orders are simply part of Apple’s production inventory.  It’s also possible they’re allocated for something different: a rumored netbook, a larger capacity iPhone (32GB or 64GB suited for video), other existing products, a new model iPhone or something unheard of.   At this point, it’s all speculation.

Apple uses multilayer (MLC) flash chips in the iPhone.  The 8 Gigabit units described in the Digitimes report,  if counted as unstacked layers, would translate to about 12,500,000 8 Gigabyte iPhones (8 Gigabits equals 1 Gigabyte (GB)) or 6,250,000 16 GB models.

Occasional patent infringement lawsuits are a fact of life for technology driven companies. 

This week, Taiwan based Elan Microelectronics Corporation filed charges against Apple claiming the Macbook, iPhone and iPod Touch infringe on Elan’s patents.

The suit, filed Tuesday in the U.S. District Court for Northern California, centers around touch screen controls and the user of multiple fingers (“multi touch”) as inputs.

There are two patents in question.  The first numbered 5823352 (see below), and dubbed the "352 Patent" for the case, was granted in 1998.  It is the core of the complaint.  It deals with touch-based input devices that can sense and respond to the simultaneous use of more than one finger (e.g. “multi-touch”). 

Last year, Elan settled a similar suit brought against Synaptics over this same ‘352 Patent.

The second patent, numbered 7274353 (dubbed the “353”) was filed in 2003 and granted in 2007.  It addresses the use of virtual keyboards (“patterns”) or “simulated keyboards” displayed beneath a capacitive touch screen.  It specifically claims the application both in general or on a mobile phone and is targeting the iPhone and iPod Touch.

Elan said in a statement that they had tried to negotiate with Apple “over a significant period of time.” According to the complaint, they first made contact in 2007.

With licensing discussions not proving fruitful, Elan decided to take its concerns to court.

Elan is seeking injunctive relief and damages. 

The full court filing and copies of both patents have been sourced by Metue and are embedded in a single document at the bottom of the page.

(Note: we have combined the three documents into a single PDF file for easy access. To view the patent filings scroll to the later pages of the document.  The 352 Patent begins on page 7.  The 353 patent on page 34 ).

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