US ITC’s Decision Partially Reversed in Favor of Philips.　Gigastorage And Princo Defeated in Philip’s Appeal to CAFC.

The US ITC’s decision on Philips’s patent infringement suit against Gigastorage and Princo is partially reversed. The CAFC reversed the ITC’s decision on the impermissible tying arrangement issue saying Philips’s patent pooling practice involves nothing unlawful. The case is remanded to the ITC for further proceedings with respect to the other issues including improper price control, price discrimination and unreasonable royalty structure. Princo’s and Gigastorage’s stock price both fell in response to the CAFC decision.

 

The demand for CD-R disks declined over the years while the suit moved along. Therefore, the CAFC’s decision will have no substantial impact on the industry except on future negotiation between Philips and prospective Taiwanese licensees with respect to royalty rate.

 

The US ITC ruled in October 2003 in favor of Gigastorage and Princo saying Philips had “misused patent” by employing an impermissible tying arrangement, improper price control, price discrimination, and unreasonable royalty structure with respect to the package licensing of the CD-R technology patents. Philips’ claim for banning imports of the CD-R products made by Gigastorage and Princo to the US market for distribution was thus dismissed. Philips subsequently appealed the case to the CAFC. Gigastorage said it would appeal the case. (2005.9)

CYJ/EMA