Toshiba, Micron settle patent dispute

Under terms of an agreement announced Friday, Toshiba will purchase some Micron patents related to semiconductor technology and license patents previously owned by Lexar Media Inc., which was acquired by Micron earlier this year. Toshiba will pay US$288 million to Micron in return for the patents and licenses, Toshiba said.

The amount is substantially less than the US$465 million in compensation awarded to Lexar by a California court in 2005. The payment has been on hold since late last year after Toshiba succeeded in having the damages reconsidered and filed an appeal seeking to overturn the original guilty verdict. Earlier this year Lexar raised the stakes by asking the U.S. International Trade Commission to bar the import of some of Toshiba's NAND flash-memory chips and products containing them.

The ITC action will now be dismissed, along with others at the U.S. District Court for the Northern District of California and the California Court of Appeals, Toshiba said.

Toshiba became business partners with Lexar when it invested $3 million in the company in 1997 and acquired a seat on its board of directors. According to Lexar's original complaint, Toshiba sat on the board for two and a half years and gained access to the company's product plans and technology, while at the same time working with Lexar rival SanDisk Corp.

Toshiba will soon put its second generation of HD DVD players on sale in the U.S. The Tokyo company kicked off the high-definition movie battle in the U.S. earlier this year when it put its first generation of HD DVD players on sale. They were soon followed by a machine from Samsung Electronics Co. Ltd. for the rival Blu-ray Disc format.

Both formats use optical discs the same size as a CD or DVD, but use blue lasers to cram much more data onto the discs. However, Blu-ray and HD DVD are incompatible, and the different companies behind each format are vying for the favor of consumers. To date many consumers seem to be reacting cooly to the rival formats and are sitting on the sidelines until a winner is crowned.

The more expensive of Toshiba's two new players, the HD-XA2, packs several new features that should mean a better picture if you have the right TV and content. The player generates output at up to 1080p, which is the highest of several levels of high-definition picture, and has the latest version of the HDMI (high-definition multimedia interface) standard. HDMI version 1.3 increases the color depth from 24 bits to 36 bits for deeper colors in images, but you'll need a compatible TV to realize the benefit.

The HD-A2 will be available from October for US$500 and the HD-XA2 will go on sale in December for US$1,000, said Toshiba. That means there's no change in the price of Toshiba's cheapest HD DVD player but there is an increase of $200 in the price of the high-end model from the current $800 price tag for the HD-XA1.