Japan’s JSR in patent dispute with US university over breakthrough chip technology

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A multibillion-dollar patent fight has broken out over a technology that could transform the future of chipmaking, pitting the State University of New York against a company that is set to be owned by a Japanese government-backed fund.

The university’s research foundation alleges that Inpria, a US subsidiary of Japan’s JSR, has been selling chip materials products that are based on technology invented by one of its professors, according to a filing made last week. It could seek damages of up to $4.3bn for alleged infringement of its intellectual property.

The legal battle has erupted as JSR is seeking a buyout by a state-backed fund in a controversial deal that has raised questions about whether Japan is entering a new era of state interventionism to protect technologies of strategic importance. 

JSR is a leading provider of photoresists — specialist chemicals used for printing circuit designs on chip wafers — to the world’s largest chipmakers, including Samsung Electronics, Taiwan Semiconductor Manufacturing Company and Intel.

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At the heart of the intellectual property dispute is technology commercialised by Inpria, a chemical materials start-up spun out of Oregon State University that JSR acquired for $514mn in 2021.

The company is known for its metal-containing photoresists, which researchers see as a potential game changer for developing highly sophisticated and cost-effective extreme ultraviolet (EUV) lithography machines, critical to the production of high-end chips.

Analysts believe the technology Inpria is working on is one reason the Japanese government is keen to prevent JSR from falling into foreign ownership.

The complaint filed with the US District Court in New York claims the metal oxide resists were originally invented by research foundation professor Robert Brainard and his team. It accuses Inpria of selling products and filing new patents using its IP — valued between $2.4bn and $4.3bn — in violation of a contract signed between the foundation and JSR’s subsidiary.

It also seeks a preliminary injunction to prevent JSR and Inpria from continuing with their alleged activities and asks for an escrow account to be established to ensure its financial claims will be protected even after the state-backed Japan Investment Corporation launches its $6.4bn offer for JSR as early as this month.

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Noting that the JIC deal is expected to be completed in early March, the filing says: “In less than five weeks, Inpria and its parent company, JSR, will try to make righting these wrongs impossible.”

The lawsuit from the State University of New York points to what it says are previous claims by JSR and JIC that call into question whether the research foundation would still be able to pursue legal action against Inpria once JIC acquires JSR.

A person close to JSR said the company had not previously suggested it would be outside the jurisdiction of US courts and that Inpria’s IP was not expected to be transferred to either JSR or JIC.

The research foundation said it became aware of its IP issue with Inpria when a legal dispute over patents broke out between Inpria and chip manufacturing equipment supplier Lam Research in October 2022. It notified Inpria that it was considering legal action last November, shortly before JSR approached JIC for a take-private deal.

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In an emailed statement, JSR said it considered the lawsuit without merit and internal investigations it conducted had not uncovered any improper activities involving Inpria or implicating JSR.

“The patents in question are in patent families filed prior to the full acquisition of Inpria by JSR in 2021,” the company said.

“Inpria is a former university spinout with deep roots in academic research on metal oxides stretching back two decades,” it added.

Source: https://www.ft.com/content/c61c0b01-5627-47cb-8fa6-796fba944fc5