GlobalFoundries sues TSMC, wants U.S. import ban on some products

https://www.reuters.com/article/us-globalfoundries-tsmc-lawsuit/globalfoundries-seeks-to-ban-u-s-import-of-tsmc-clients-products-idUSKCN1VH0E9

by callwaiting • 7 years ago

138 75 7 years ago

reuters.com

throwaway2048• 7 years ago

I have a feeling that eventually we are going to be facing basically a completely paralyzed tech industry because of what basically amounts to a patent singularity.

As more and more formerly innovating and profitable companies that invented and patented key technologies either start to struggle, get bought out, or go out of business, there will be more and more pressure to monetize their huge patent warchests, (and competing companies are even more driven to build up their own warchests as a result) we are going to see wave after wave of massive industry wide patent lawsuits like this that are going to completely disrupt things.

We absolutely need massive patent reform in the USA before things reach this point and any incentive to bring new products to market is destroyed by the tidal wave of patent suits that it is virtually guaranteed to attract.

This stuff has very extreme chilling effects, for instance a technology that has almost limitless potential (forward error correction) receives very little attention because of how crazy the patent situation surrounding it is.

Fjolsvith• 7 years ago

I'm sure a national emergency declaration would resolve an issue like this.

ajsnigrutin• 7 years ago

Since the technology moves on so fast, shortening the patent expiration to eg. 1year would solve most of the problems.

Companies get 1 year head start (which is a lot), and after 1 year, we all benefit.

mstolpm• 7 years ago

Wouldn't the slowness of the courts and the lengths of processing lead to virtually no protection at all? If going through the courts takes sometimes 3+ years but parents expire after 1 year, every final court ruling would be retroactive.

new2993• 7 years ago

If you're suggesting a 1 year patent period for all utility patents, you might as well just get rid of patents. In the industry I work in (Biotech - DNA sequencing) it takes maybe 5 years to mature an approach and get it to market.

Once your patent is published, there isn't much to stop others developing the same method [1] (they just would run into trouble if they sold it commercially). So at the same time that the patent owner is developing their platform, a competitor can be developing theirs and launch at the same time or nearly the same time as you.

Certain areas, like software patents, I'd possibly agree. I don't think software/algorithm patents are a good idea for a number of reasons however...

[1] General consensus seems to be patents don't cover academic work. I've also heard that they don't cover commercial research, and that in any case it's hard to provide damages. http://softlib.rice.edu/ques.html#2

beefield• 7 years ago

I would think that setting a fast increasing tax (say doubling each year) on patents would solve lots of issues. Once you do not want to pay the tax, the patent moves to public domain. Same tax should apply also to copyrighted work.

mensetmanusman4• 7 years ago

As someone who researches at a western company, this would actually get rid of a lot of research, because business moves so slow to commercialize due to the highly regulated environment.

Regulation and legal arbitrage, where companies (particularly in Asia) can take what is newly invented on a silver platter and sell to the global market due to lack of environmental protections etc. would be all that is left.

varshithr2• 7 years ago

GlobalFoundries(GF) was part of AMD and now AMD relies heavily on TSMC. If this ban they are seeking goes through, does it affect AMD?

I think GF gave up on 7nm node a while ago, So maybe AMD is safe here.

baybal26• 7 years ago

Yes, and they still have AMD's orders going on for legacy products, auxiliary ICs, and interface logic.

That's entirely them giving up on existing as a proper market player, and the "farewell gift" to the industry before they self-destruct.

Having an idea of mentality of GlobalFoundries' new owners, I can say they care about having a return on their investment any way possible, and how they make that is of no importance to them.

Unlike a tech player with stake in the well being of larger ecosystem, or genuine fear of being denied the market by retaliatory lawsuits, those guys have no problem "setting the house on fire"

This is why they chose Germany out of all countries to file a patent lawsuit. Germany famously allows for instant summary injunctions in patent and other IP cases, which will be completely devastating for a company making actual physical products. Second to that, Germany controls the supply of few critical chemicals for semiconductor manufacturing, and they may opt to go for arm twisting with them too.

I can say that this is what we will see for year and years to come, unless something dramatic will finally happen to the patent system.

makomk• 7 years ago

I wouldn't be surprised if AMD kept some kind of patent license to GlobalFoundries patents when they spun them off.

varshithr2• 7 years ago

Makes sense to do so.

baybal26• 7 years ago

Well, what can I say.

This is how the "nuclear option" with regards to tech patents looks like. That's what everybody talked about few years ago, when big tech companies were making big patent defence pools.

An all out patent war in software looked scary enough for the industry, but the damage from patent war in semi, and particularly in the fab process, has a potential to surpass even that few times over.

Now US and German legal system has a choice: follow on its current ideology into the dead end, or not to do so, and abandon their positions of grandstanding

vectorEQ2• 7 years ago

is it hip now to try and ban competitors from doing business :/ . grow up. where are the days of trying to beat competitors with a better product?

ivoras• 7 years ago

That time never actually existed. Microsoft, IBM, Apple, Facebook... and practically every large business since Rockefeller and before, did everything in their power, including regulatory capture, to hobble their competition.

It's the nature of doing business at scale.

Merrill• 7 years ago

The invention of the telephone, for example. https://en.wikipedia.org/wiki/Elisha_Gray_and_Alexander_Bell...

decoyworker3• 7 years ago

Microsoft and Apple do not make good products?

minikites• 7 years ago

Those days only existed in the stories of Horatio Alger and other capitalist mythologies.

oh_sigh• 7 years ago

I said the same thing when JK Rowling prevented me from publishing my pirated copies of Harry Potter. Why aren't I allowed to do business but she is?

kryptiskt• 7 years ago

So the reason they abandoned their 7nm process was because they were going to make money patent trolling instead? Guess it doesn't require as much investment as building fabs.

Actually producing stuff is just a liability for a patent troll, that leaves them open for counterattacks.

perlgeek• 7 years ago

I think it's more likely that they abandoned their 7nm process because they couldn't figure it out, and then resorted to patent trolling to still make some money, somehow.

TorKlingberg• 7 years ago

I predict this will work itself out by TSMC paying some money to GF. The amount will have some some vague connection to the validity of the case and the mood of a judge.

sharpneli• 7 years ago

GF licensed 14nm from Samsung. My hunch is that they’re trying to get their hands on TSMC 7nm with cheap terms.

jpmattia• 7 years ago

My hunch is that they’re trying to get their hands on TSMC 7nm with cheap terms.

I can't imagine a less diplomatic strategy for negotiating cheap licensing terms. Good luck to them if that's the angle.

bazooka_penguin• 7 years ago

Pretty sure IBM 7nm was functionally complete but they decided not to expand facilities to support it. Why would they do it for TSMC 7nm instead of, say, licensing something from samsung again?

Gwypaas2• 7 years ago

This take on it from the AMD subreddit makes at least for me more sense than the "evil patents" way of thinking. Though, nothing confirmed yet.

It seems strange at first, but the selection of patents and the timeline lead me to think of a very particular plausible line of events that would absolutely merit a lawsuit and also explain the delay to implementing said lawsuit.

AMD, IIRC, has access to Global Foundries' patent portfolio - enabling them to use those patents freely. Makes sense, they were once the same company and have a very tight agreement in effect for at least a few more years. AMD goes to TSMC for 28nm after GF's stumbles and takes GF's patents to TSMC to improve their process tech for AMD's needs. All legit, all legal. TSMC does not have permission to use those patents on non-AMD products, but does so anyway.

Fast forward a couple years and investigating TSMC's process as it applies to shipping products by other vendors reveals patent infringements. Good-faith efforts are made to stop the infringement, but TSMC either doesn't acknowledge the infringement or simply claims compliance and then does nothing. Ergo, the lawsuit we see today.

https://www.reddit.com/r/Amd/comments/cvqu5l/comment/ey6fje5

baybal26• 7 years ago

FinFET is a TSMC's invention as well as immersion lithography, and yet it is somebody else got the patent.

How is that fair? How does it "encourage progress?"

dmix3• 7 years ago

Real world innovation and who runs to the patent office first are often two very different things.

Yet many, often very rational, people defend the process as necessary for innovation.

Much like minimum wage laws there's a lot of sub-industries where it legitimately helps (studies show fast food mega corps don't have lower employment rates after small bumps) and many where it hurts the very same people it claims to protect (unskilled youth and disabled people who just want to work in the summer/after school/part time for cash strapped small businesses for experience and pocket change, and don't benefit from a 'living wage' or nothing arrangements). I'm a big proponent of having these laws be specific to certain fields where it makes sense like biotech and not presented as a panacea that's pigeonholed onto every industry and easily exploited by companies who contribute little more than hiring good lawyers.

lvh• 7 years ago

Unfortunately, patent offices think the courts will sort it out if they mess up, and courts think patent offices probably did an OK job vetting, and they both defer to each other more than they probably should.

That said: there are only a handful of successful patent defense strategies, and some of them merely prevent bad things from happening to you (e.g. arguing noninfringement), others invalidate the patent (e.g. showing prior art). So, just because the process stumbles sometimes doesn't imply that patent can not encourage progress and it does not imply patents can't encourage progress in general. But it does lead to expensive lawsuits that even bona-fide in-the-right actors will settle to avoid.

To take the counterpoint: we're not seriously suggesting GF is a patent troll right? (Though a recent court case argued "patent troll" can't be defamatory because no-one knows what it means and so it must be opinion ;-))

Panoramix• 7 years ago

TSMC was the first to propose the general idea to use water. Others [ASML and Nikon] made it work in actual implementations that required hundreds of other developments. TSMC doesn't even make lithography machines, it's a completely different business. I don't see how anything is unfair here.

sct202• 7 years ago

TMSC has always been a contract foundry with customers who have potential IP conflicts, I would be kind of surprised if they were sloppy like this.

Gwypaas2• 7 years ago

The other side of this question is, which other foundries in the world would have tech that TSMC would be interested in?

I'm not well versed in the foundry universe but a quick guess would be a very limited number of companies. Maybe Intel, GF, Samsung and a company or two I don't know about.

nonbel3• 7 years ago

I'm not complaining, but just wondering why there was zero interest in this when I submitted it yesterday: https://news.ycombinator.com/item?id=20801761

dmix3• 7 years ago

This is such a common phenomenon with some very obvious answers...

nonbel3• 7 years ago

Well the general answer is that the HN algorithm didn't put it on the front page (or at least not for long enough).

It is just that there is obviously interest on this site in this topic, yet it failed to gain any traction. So there is room for improvement in the algo.

jokoon• 7 years ago

I think it's weird that most of the IP is developed and owned by US companies, yet everything is being built overseas. Of course I'm talking about core chips, like CPUs, SoC, RAM, flash memory, etc.

https://en.wikipedia.org/wiki/Semiconductor_industry#/media/...

I don't really understand why Taiwan has so many of those chip factories. I can understand why developing countries like China have been assembling electronic devices for so long, because the labor is cheap, but I don't think that chip making follows the same rule. Those generally are high tech factories, and I don't see why Taiwan has so many of them.

Kurtose• 7 years ago

Why would Taiwan not have high tech factories? It has similar or higher level of development than - as a non-random example - France.

https://en.wikipedia.org/wiki/Human_Development_Index

rrss• 7 years ago

Because Taiwan recruited Morris Chang to help promote Taiwan's economy, and Morris Chang decided to found the first foundry (i.e. fab-only) in the world.

Ever since, TSMC has been more-or-less leading innovation in semiconductor manufacturing. Taiwan has a lot of high tech factories because it is a high tech country with smart people.

gunnm• 7 years ago

Taiwan started investing heavily in semiconductor industry since the late 70s. (https://en.wikipedia.org/wiki/Hsinchu_Science_Park)

I'm pretty sure that's decades before mainland China.

epsilon_greedy• 7 years ago

For CPUs specifically, many of Intel's chips are fabricated in the US: https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si...

skaevola• 7 years ago

A big reason seems to be the difficulty of financing manufacturing operations in America.

https://americanaffairsjournal.org/2019/05/financing-advance...

jbay8082• 7 years ago

Taiwan has also put together a pretty dominant position in industrial automation, with companies like Hiwin making the robots and components that go into those factories. They also are very close to customers in Japan, Korea, and China.

GlobalFoundries sues TSMC, wants U.S. import ban on some products

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