CMO wins 10m-yen award in patent-infringement case

This article was published by the Taiwan Headlines on April 3, 2006. It reports that Taiwan's Chi Mei Optoelectronics Corp. recently won a lawsuit in Japan against Japan's Semiconductor Energy Labs. Chi Mei is currently Taiwan's No.2 large-sized TFT-LCD panel maker.

In 2005, Japan's Semiconductor Energy Labs initiated a patient infringement action and claimed that Taiwan's Chi Mei had used the Japanese company's patented electrostatic discharge devices in LCDs. However, in the Tokyo District Court's recent declaratory judgment decision, it was declared that Chi Mei did not infringe upon the Japanese company's patent. It was further declared that the Japanese company's patent itself was invalid.

Meanwhile, Japan's Semiconductor Energy Labs was forced to pay compensation of 10 million Japanese Yen to Taiwan's Chi Mei, for the commercial harm caused by the Japanese company's move to publicize the "infringement" in the media in Japan. The Tokyo District Court declared that the Japanese company's actions constituted unfair competition and commercial defamation. (The company made its allegations made its allegations about the "infringement" directly to the media. It also accused several retailers of selling LCD televisions that incorporated patent-infringing LCD panels manufactured by Taiwan's Chi Mei. Finally, it applied to the Tokyo District Court for an injunction and confiscation at Japan Customs of those LCD TV sets.) These actions were so egregious that the Court ordered the Japanese company to pay 90 percent of the court costs for the case.

According to Chi Mei, the court decision demonstrated the impartiality of the Tokyo District Court and the fairness of the Japanese judicial system. It is expected that the compensation order for commercial defamation and unfair competition will act as a deterrent to patent holding companies such as Japan's Semiconductor Energy Labs who intend to institute unsubstantiated infringement suits with the objective of threatening customers.

According to Chi Mei, when companies like Japan's Semiconductor Energy Labs, which produce no products themselves, bring such patent infringement suits against manufacturing companies, it harms not only the global LCD industry but also the world's consumers. It is these consumes who ultimately have to bear some of the burden of increased costs as a result of legal fees and distribution disruptions.

Japan's Semiconductor Energy Labs is a research and development organization whose primary function is the licensing of semiconductor patents. The Japanese company has sued many of the leading technology manufacturing companies in Japan, South Korea and Taiwan for patent infringements.