Samsung Could Cut IP Ties With SanDisk

But Samsung has not been standing still. The company is also believed to be working on its own versions of 3-bit and 4-bit flash memory (in fact, Samsung once had a deal developing 4-bit flash memory with M-Systems, back when M-Systems was still an independent company).

And it's worth noting that there are several venture-backed start-up companies developing technology related to 3-bit and 4-bit flash memory, such as Anobit and Densbits. A couple of small acquisitions by Samsung could bolster its own arsenal of intellectual property.

"There are probably some ways you can get around [SanDisk] and not use them, but it all comes down to the competiveness," says Forward Insight's Gregory Wong, an analyst who specializes in flash technology.

In other words, the legal issues are only half the challenge. SanDisk's flash technology is generally considered the best in the business, says Wong. So going with a home-cooked version might save Samsung some licensing fees, but leave it with an inferior product.

"In the end all of the vendors can do 3-bit per cell, it's just in terms of performance and cost, how do they stack up against each other?" Wong says.

If Samsung does attempt to forego a SanDisk license and take its chances in court, it can draw inspiration from some of the flash memory firms that have dealt with SanDisk in recent years.

Intel(INTC Quote) entered the NAND flash business in 2005, through a joint venture with Micron(MU Quote). The company is believed to have a cross license with SanDisk that does not entail royalty payments thanks to Intel's own stockpile of patents relating to a type of flash known as NOR flash memory.