Boston University Wins $13.7 M Jury Verdict in IP Row against Taiwanese LED Manufacturers

A Massachusetts federal jury in U.S. has decided recently, Epistar, Everlight Electronics and Lite-on need to compensate $ 13.7 million to Boston University (BU)for willfully infringing LED patents, reported Law360.

The jury verdict said BU had shown evidence that Taiwanese LED manufacturers Epistar and its clients Everlight and Lite-On had sold products, such as dimmable LEDs, that infringed U.S. Patent No. 5,686,738. The jury also decided the defendants failed to show the patent was invalid.

The patent involved in the case, U.S. Patent No. 5,686,738, is a patent related to preparing highly insulated GaN single crystal films in a molecular beam epitaxial growth chamber.

The U.S. university accused Epistar had “knowingly and intentionally infringed” various claims of their patent for more than a decade, which the Taiwanese LED chip manufacturer countered that its products features were different from the requirements outlined in the patent.

The university’s lead legal counsel Michael W. Shore of Shore Chan DePumpo LLP said they will ask the court to award costs, attorneys’ fees and enhanced damages based up on the jury’s findings.

“The litigation was hard fought, but the facts, science and law always strongly favored Boston University,” Shore said. “The defendants' lawyers should be commended for taking on an impossible-to-win case and making it a struggle.”

BU sued the electronics companies in December 2012, and sought to separate Epistar’s trial from its clients, but U.S. District Judge Patti B. Saris ordered all three Taiwanese companies to face the jury together.

A breakdown of the jury verdict of compensating Boston University $ 13.7 million, made by Liberty Times shows Epistar will need to pay at least $9.3 million. Its clients Everlight and Lite-On were given a lower penalty of $ 4 million and $365,000 respectively for using the patent infringed LED chips.

Epistar argued in court earlier this month that BU had taken some of their attorneys’ words out of context, and made misleading statements to the jury.

“Defendants said their attorneys never made certain admissions about a technical term involved in the patent dispute, nor did they admit Epistar products had certain characteristics that were described by BU,” wrote Law 360.

However, Shore told Law360 that two engineers in the jury and had asked questions of defense experts during trial that “exposed the fallacy of the defenses.”

The lawsuit is no doubt a huge blow on Epistar’s finances, as it struggles to profit due to the slowdown in backlight demands. The company incurred a loss of NT $1.2 billion in 3Q15, bringing its total net loss for the first three quarters to NT $577 million, reported Liberty Times.

The Taiwanese company is considering to appeal the ruling and enter a second trial against Boston University.

“It will be more costly for Epistar to settle its legal dispute with Boston University right now compared to a decade ago because of how big the LED market value has grown,” said Katsuyuki Akutagawa, Chief Legal & IP Officer and Company Board Director of Nichia at a recent interview in Taipei this week.

Boston University had sued the Japanese LED chip maker in 2002 over patent infringement, but Nichia chose to cross-license its patents with the university at the time. No stranger to lawsuits, Nichia had spent in total US $75 million at one point to settle a lawsuit against Seoul Semiconductor that dragged on for 3.5 years.

Akutagawa’s advice to other LED manufacturers is to settle lawsuits as soon as possible, since it is much costly to enter second trial.

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