Being Charged with Patent Infringement in the US – Taiwan LED Enterprises Joined Together to Save Billions of Litigation Expenses.

Many Taiwan technology enterprises were being charged in the US with infringing on LED patent right by patent right holder in February 2008.  The patent right holder filed a complaint with the International Trade Commission (ITC) and requested an investigation to be conducted according to Section 337 of the Tariff Act of the United States.  A total of 34 defendants, including upper, middle and lower streams enterprises, were being charged for using the LED patent right in issue.  Industrial Development Bureau (IDB), Industrial Technology Research Institute (ITRI), and Optoelectronic Semiconductors Industry Association (OSIA) jointly established a special project team to assist some defendants which are Taiwanese enterprises.  With the assistance from those organizations, defendants adopt a pattern of joint resources sharing for reaching settlement agreement with plaintiff.  By estimation, a maximum of 70% of the attorney fee can be saved by these technology enterprises.

Taiwan Optoelectronic Semiconductor Industry Association (TOSIA) indicates that for filing complaints in the US, a minimum of USD5 million attorney fees should be ready in hand for retaining the top-ranked law firms.

With regard to the settlement amount, calculating by taking 2-3% of the revenue on the infringing products, one enterprise is estimated to pay around several ten thousand to several hundred thousand New Taiwan Dollars in damages.  After considering the several hundred million litigation expenses that might cost them, Taiwan enterprises normally tend to reach settlement agreement.

Taiwan has a complete LED industry chain; in 2000 Taiwan’s production ranked No. 1 globally, whereas production value ranked No. 2 globally.  In 2007, global LED production value totaled to USD6.678 billion whereas Taiwan’s production value accounts for 25.2% of the total global production value, an equivalent amount of USD1.683 billion.  IDB estimates that in 2010, Taiwan LED industry will contribute a total production value of USD2.859 billion.

IDB indicates that the ITC requests defendants submitting a response within 40 days.  The special project team has retained proficient American lawyers to evaluate the various risks and costs if defendants decide to defend for themselves or for reaching settlement with the patent right holder(s).  In the future, the same pattern will be adopted for solving patent litigation issues in other industry; namely, enterprises can share the expenses of attorney fee by using the common pool resources consisting of data compiled by impartial organization, information offered by enterprises and evidences collected by lawyers.  (2008.8)
/DC