Further Developments in Blue Laser Patent Licensing Disputes

By Hajime Yamada (GLOCOM)

I described earlier in this series how blue laser inventor Professor Shuji Nakamura, University of California of Santa Barbara, has filed a damage suite against his former employer, Nichia Corporation, for payment as appropriate consideration for his inventions.

Nichia has developed a market for blue lasers that Professor Nakamura invented while he was still with the company. Blue lasers are considered to be the best light source for next-generation devices for storing information beyond Digital Versatile Disks (DVDs). The blue Light Emitting Diode (LED), based on similar principles and which also is one of Professor Nakamura's inventions, is expected to be used in blue traffic lights and equipment for room lights. The total annual sales for both products are forecasted to grow to more than 200 billion yen, a huge market for electronic components.

Some other companies also have an eye on this market, and have developed similar products. The fastest was Toyoda Gosei Co., Ltd. However, Nichia filed an infringement of patent rights against the company. Nichia made similar claims against several other companies, including OSRAM Opto Semiconductors, a German company that followed Toyoda Gosei.

In June of 2002, however, Nichia and OSRAM Opto Semiconductors reconciled their differences and announced that the two companies would cross-license the associated patents. For Nichia, such a cross-license means recognition of the existence of competitors in the market. This is the first time for Nichia to make such a decision.

Why has Nichia changed its attitude? The reason could be that research and development (R&D) by other companies has progressed so much that Nichia's monopolistic structure is giving way.

In September of 2001, Matsushita Electric Industrial Co., Ltd. announced that it has developed parts for the blue laser in cooperation with NGK Insulators, Ltd. The blue laser produced by Nichia is a device that emits blue light when charged with electricity, while the one Matsushita has developed emits blue light when parts are exposed to red light and therefore does not infringe on Nichia's patents.

Meanwhile, NEC Corporation also took its development of blue lasers public at almost the same time as Matsushita. NEC itself is aware of the possibility of infringing Nichia's patents. NEC's point, however, is that NEC has acquired a wide range of patents associated with this laser, and making cross-licensing contracts with Nichia is practical.

Also, in March of 2002, Sanyo Electric Co., Ltd. publicized its successful development of the blue laser. Sanyo claims that the structure of its lasers is different from the one by Nichia, and therefore they do not violate Nichia's patent rights. Moreover, Rohm Co., Ltd. announced that it would put its blue LED on the market in June of 2002.

To summarize, many companies have publicized successful development of or releasing plans for the blue laser or blue LED products. These companies must be well aware of Nichia's strong attitude toward infringement of patent rights. However, these companies put products on the market, arguing that devices were materialized by other technologies or that they can cross-license with Nichia because they have related patent rights.

From an objective point of view, the situation looks as follows:

First, R&D competition in the technological area of the blue laser has been intensifying, and many corporations have acquired their own patents. Second, even Nichia therefore has to accept participation of competitors in the market through exchanging the rights to use the patented technology among them.

In the high-tech field, each company promotes its R&D side by side with others, and therefore monopolization of a technology is considered rare. The market of blue lasers, which depended upon Professor Nakamura's originality, seemed to be an exception, but in the end the same situation has arisen.