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 Elan Microelectronics sues Apple for patent infringement, ITC initial determination finds no infringement, Elan seeks for review 
    Released Date: 2011/04/30

Hsinchu, Taiwan – The owner of patented multi-touch technology, professional touch design company Elan Microelectronics Corporation, announced April 30 that it has received the Final Initial and Recommended Determinations from the USITC Chief ALJ. The Final Initial and Recommended Determinations recommend ITC to find Apple not in violation of U.S. trade law. Based on the claim construction, Elan has failed to show that Apple products infringe the asserted claims, according to the Chief ALJ. The Chief ALJ also finds that Elan has not shown significant licensing activities of the 5,825,352 patent (the 352 patent) within the U.S. sufficient to satisfy the domestic industry requirement. The Final Initial and Recommended Determinations further find that Apple has failed to prove that the asserted patent is invalid.

Elan filed complaint against Apple in the ITC in March 2010, alleging Apple products with multi-touch enabled touchpads or touchscreens, including iPhone, iPod Touch and MacBook, etc., infringe Elan's 352 patent. Elan asked the ITC to issue exclusionary order, barring entry into the U.S. of infringing Apple products pursuant to section 337 of the Tariff Act of 1930.

Elan immediately made three announcements: (1) It is unfortunate that the initial determination finds that Apple products do not infringe the asserted claims, and that there is no domestic industry in the U.S. However, the Chief ALJ's initial determination is not the ITC's final decision. Elan will seek review of the Chief ALJ's decision and request for a conclusion favorable to Elan from the ITC. The ITC will complete the review by August 29 and issue its final decision. (2) The initial determination has no significant negative effect on Elan's finance and business, since Elan does not need to pay for any compensatory fees. In addition, Elan is not a supplier of Apple, and there will be no effect on business orders. (3) The Final Initial and Recommended Determinations find Elan's 352 patent to be valid, and Elan will continue to uphold its philosophy that intellectual property rights should be respected. Elan will actively enforce its intellectual property rights should there be any infringing activities in order to protect the rights of company and its shareholders.

Currently Elan is also litigating against Apple in the Northern District of California. In that case, Elan sues Apple for infringing its 352 patent as well as the 7,274,353 patent, and Apple countersues Elan for infringing two of Apple's touchpad related patents. ITC decisions have no binding effect on district courts. The district court trial is scheduled to take place on February 27 next year (2012).

Elan indicates that its long term goal is to focus on the touch application market and to increase sales and profits. Touch application makes up 30% of Elan's gross revenue in 2010, and a 50% target is set for 2011. Smart Phones, Tablet PCs and laptops are the three major product applications that will drive Elan's growth in 2011. As multi-touch continues to be an integral feature of these three applications, the prospects of business are quite encouraging. With its patented technology and sound experience in the multi-touch domain, Elan is quite confident to be able to offer the most competitive total solution to its customers.

Elan's 3G Smart-Touchscreen uses digital signal processor (DSP) core based technology. It supports ten-finger multi-touch with precision accuracy and linearity. Noise suppression no longer needs the ground layer at backside of the ITO and larger touchscreens are immune to deformation problem caused by high-pressure finger-touch. Currently, ten-finger multi-touch supports touchscreens with sizes ranging from 2 to 15 inches. These touchscreens are expected to be widely and popularly used with Smart Phone, Tablet PC, and E-Book. Elan expects mass production of its touchscreen by early 2011.

Elan is the largest professional touch chip and module solution design company in Taiwan. As new competitors enter the market, Elan maintains two strongest competitive advantages, including owning core patent technology and adopting its touch chips and comprehensive solutions by large companies around the world. With these competitive advantages in hand, Elan is confident that it will be the winner in the touch market.

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