Silicon Image, Analogix to Square Off in Court on Copyright Suit
A September trial is set for Silicon Image’s suit accusing Analogix of copying the register maps and configuration software for DTV chipsets. Silicon Image sued Analogix in U.S. District Court, San Jose, in January 2007, alleging that the chip developer’s ICs violate its copyrights by being designed to “mirror” its products and “mimic” their numbering schemes.
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Analogix promotes the ANX9011 single-channel receiver and ANX9021 dual-channel receiver as “drop-in” replacements for Silicon Image chips, the suit says. It says Analogix “encourages” customers to modify the Silicon Image configuration software to be compatible with its chips, violating a license agreement. Analogix has “misappropriated” trade secrets, violating the California Uniform Trade Secrets Act, Silicon Image said. The trial is set to start Sept. 29.
Analogix responded by filing a federal antitrust suit in June, arguing that Silicon Image signed an agreement with Hitachi, Matsushita, Philips, Thomson and Toshiba to revise and release new versions of the HDMI standard that each company must comply with. The companies created the HDMI Licensing arm and the Simplay Labs testing facility and conduct “market-controlling” activities “in secret,” Analogix said in a suit also filed in federal court in San Jose. The cases are separate, and Analogix’s isn’t going to trial with Silicon Image’s.
“There are no public deliberations between the founders; nor are there any public minutes of any of the meetings,” the suit says. “Adopters like Analogix are not entitled to vote or otherwise participate in the content of the HDMI standard or its testing. Instead, adopters like Analogix must follow the mandates of the founders and HDMI licensing.”
HDMI licensing charges a $10,000 annual fee and at least $7,500 for each product submitted for testing at Simplay Labs, the suit says. There’s an alternative annual fee for smaller companies, but “very few” use it, Analogix said. The adopter agreement imposes product royalties of 15 cents per unit sold, including the HDMI logo adds another five cents, the suit said. Adding HDCP carries an additional four cents per unit sold, it said.
Silicon Image and the founders of the HDMI standard have a six to 12 month lead over other companies developing HDMI chips and products, Analogix said. HDMI 1.0 was released in 2002 and was followed by 1.1 (2004); 1.2 (2005) and 1.3 (2006). Version 1.4 is expected by year-end. HDMI 1.3 chips are sold at a 25 to 30 percent premium over 1.1 and 1.2 ICs, the suit says.
Analogix submitted an HDMI chip to Simplay for testing in May 2007. Analogix received a notice from Silicon Image in June 2007, asking for additional equipment to test it, the suit said. Analogix delivered the equipment, but Silicon Image hasn’t responded to requests for a testing update, the suit said. Silicon Image later told HDMI test centers not to accept Analogix chips, the suit said. “Silicon Image’s refusal to complete testing on Analogix’s solutions means that Silicon Image has excluded, and continues to exclude, Analogix from the marketplace,” the suit said.
The annual number of HDMI-enabled products shipped is forecast to increase to 500 million units by 2011, from 140 million in 2007, the lawsuit says, quoting In-Stat data. There are more than 800 HDMI adopters, it said. Silicon Image has claimed a more than 90 percent share of the HDMI market, Analogix said.
Silicon Image will take a charge against Q3 earnings for severance costs from a July reorganization, the company said in a 10-Q filing with the SEC. Silicon Image officials weren’t available for further comment. The company had 635 employees Dec. 31, including 265 in the U.S.
Silicon Image’s Q2 CE revenue declined to $50.3 million from $63 million a year earlier. PC-related sales rose to $11.7 million from $9.4 million. The downturn in CE was tied reduced sales of discrete receiver chips and input processors for DTVs, the company said. The decrease also related to reduced sales of HDMI 1.1 and 1.2 chips, offset by gains in 1.3. Storage IC revenue increased to $8 million from $7.2 million, the company said. Revenue from Japan dropped to $20.8 million from $27.6 million a year ago, while that from the U.S. decreased to $11.6 million from $15.2 million.
In Q2, Silicon Image’s sales to distributors World Peace International, Microtek Corp. and Innotech accounted for 15.3 percent, 12.3 percent and 12.2 percent of $70 million in revenue, respectively, against 11.7 percent, 12.3 percent and 18.3 percent a year earlier, the 10-Q said. Cash and cash equivalents declined by $31.3 million in the six months ended June 30, due to partly to a $6.2 million payment made to Sunplus and Oracle, Silicon Image licensed video processor technology from Sunplus last year. - Mark Seavy