Publicaties

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In the first-ever case of a Chinese IT company pursuing a patent complaint overseas, Netac, a Shenzhen-based manufacturer of USB flash memory devices, has reached an out-of-court settlement in the United States with the alleged patent violator, PNY Technologies, a New Jersey-based company.

Netac filed suit in 2006 alleging that PNY was in violation of a 2004 patent that recognized Netac's USB flash memory technology.

Netac was founded in 1999 in Shenzhen, China. It claims that its founder, Deng Guoshun, invented the world's first mobile flash drive in 1999. Netac was granted a Chinese patent for the technology in 2002 and an American patent in 2004.

Deng indicated that he was satisfied with the result of the suit and went on to say that PNY would "not be the last company" that Netac sues for such violations. Many other companies, he said, are also infringing Netac's patents.

The suit, filed in an Eastern Texas district court and made under a section of the 1930 Tariff Act, was the first of its kind for a Chinese IT company, and the result could have far-reaching consequences for manufacturers of similar portable USB flash memory products. While the exact terms of the settlement remain confidential, it is widely believed that the settlement involves the payment of royalties by PNY to Netac and the signing of a patent licensing contract between the two parties.

An earlier version of this article appeared in DLA Piper’s X-Border IP Bulletin in July 2008.