CPT, LG.Philips LCD Continue Battle Over Side-Mounting Technology Patents

A method of mounting liquid-crystal-display (LCD) panels inside televisions and other equipment is proving just as important to two manufacturers' business plans as the LCD technology itself now that a patent dispute between LG.Philips LCD (LPL) and Chunghwa Picture Tubes Ltd. (CPT) has gone through arbitration and is slated for litigation in U.S. federal court.

In late June, LPL and CPT ended a round of arbitration in front of an American Arbitration Association panel in New York over the rights to several patents, including four involving side-mounting technology for LCD TVs. CPT and LPL heralded the resulting verdict, which isn't available to the public, in two very different ways.

While LPL declared the arbitration ruling a categorical victory in its favor, CPT denied LPL's claims and said in a July 25 press release that the New York arbitration panel ruled on June 20 that the side-mounting technology belonged to CPT predecessor Digital Electronic Corp. (DEC).

The side-mounting technology in question comprises four patents involving a method of lateral mounting for LCDs. In this approach, the accommodations (typically open or threaded holes) for mounting brackets are around the sides of the panel instead of on the back, reducing the size of the panel's footprint and eliminating the requirement that the back of the display be structural, according to the abstract summary of one of the patents involved in the recent arbitration.

The arbitration in question involves the interpretation of a 1996 contract to develop a notebook computer between the two companies' predecessors, LG Electronics (LGE) and DEC, according to CPT's attorney in this case, Glenn Rhodes. Rhodes stated that all intellectual property developed under this collaboration was supposed to become the property of DEC. LPL's legal team declined to comment on the joint-development agreement or its terms.

In July 2004, CPT filed in New York for arbitration of ownership rights for intellectual property developed under the 1996 agreement, including several patents related to side-mounting technology. On July 25, 2006, LPL released a statement claiming the arbitration panel had decided in its favor, ruling that LPL "holds exclusive ownership rights for its side-mounting patents, over which CPT filed for arbitration in July 2004."

Rhodes, however, countered: "Nobody won that arbitration. Everybody's requests were denied." A July 25 press release from CPT stated the New York arbitration panel's final ruling awarded ownership rights of the side-mounting technology to DEC. LPL's attorneys declined to comment on the record.

Attorney Bob Perry, a partner of King & Spalding LLP's Intellectual Property Practice Group, called the inconsistency in accounts of the ruling "quite common" given the fact that arbitration rulings aren't a matter of public record.

"That's why you'll have the disparity in the spin that's put on things," Perry explained.

Arbitration is a way to resolve a dispute privately and is used frequently in business disputes because it is typically quicker and less expensive than litigation, explained Mike Bettinger, who heads up the patent and trade-secret litigation practice at Preston Gates & Ellis LLP and deals frequently with high-tech clients' patent disputes. DEC and LGE probably had a clause in their initial joint-development-agreement contract stating that any disputes over ownership would be settled in arbitration, he stated, adding that the results of the arbitration have "nothing to do with the merits of the lawsuit."

"It looks like the arbitration committee has decided who owns the patents," said Steve Rubin, an attorney with WolfBlock'sIntellectual Property/Information Technology Practice Group. Now that the arbitration panel has determined which company owns the patents, litigation likely will look at whether or not those patents were actually infringed upon, he explained.

A patent-infringement trial between LPL and CPT is scheduled for early October 2006 in a California federal court.

Each side has stated it is confident it will be victorious in the pending litigation. While LPL's legal team would not comment on the record, company spokesperson Ellie Choo said the New York arbitration ruling is "expected to give LG.Philips LCD an advantage in the patent dispute with CPT that is currently pending."

However, Rhodes asserted that CPT would continue to defend the position that it owns the side-mounting patents.

"I think…that LG.Philips LCD has a licensing program that was basically stalled because CPT wouldn't take a license from their portfolio," Rhodes said. "LG.Philips is just insistent on CPT taking a license. I guess they believe that if CPT does not take a license, then nobody else will either. But CPT's position is that they're not going to be coerced into taking a license on patents."

In a separate case, a Delaware District Court on July 27 ruled in favor of LPL in a dispute over a patent pertaining to the prevention of electrostatic discharge in the manufacturing of thin-film-transistor (TFT) LCDs. In the suit, filed by LPL against Tatung Co.,Tatung Co. of America Inc., CPT and Viewsonic Corp., the Delaware court found each company had infringed upon the patent to varying degrees. The jury awarded LPL about $52.5 million.

CPT, meanwhile, accused LPL of trying to incorrectly associate this verdict with the case in New York in its July 25 press release.

"Apparently, LPL intentionally released untrue news, trying to deceit (sic) the people in the world and affect the outcome of the pending case," CPT alleged in the release.

The October trial in California will cover the patent questioned in the Delaware dispute, as well as an additional manufacturing patent and the four side-mounting patents, Rhodes said.

— Jessica Quandt

Samsung, Sharp Vie for World's Largest LCD Facility

SEOUL, Korea and TOKYO, Japan – Bucking the recent trend of liquid-crystal-display (LCD) panel manufacturers scaling back production plans, Samsung Electronics Co. Ltd. and Sony Corp. joint venture S-LCD Corp. and Japanese manufacturer Sharp Corp. will be stepping up operations over the next year at two of the largest LCD manufacturing clusters in the world.

S-LCD will add an 8th-generation thin-film-transistor (TFT) LCD line to its existing facility in Tangjung, Korea, creating the largest LCD cluster in Korea and one of the largest in the world. The company expects the plant to be operational by fall 2007. Also vying for the title of world's largest LCD facility, Sharp's own G8 plant in Kameyama City, Japan, began operations at the beginning of August, two months ahead of schedule.

Although major LCD manufacturers such as Chei Mei Optoelectronics, LG.Philips LCD and AU Optronics have announced in recent months that they will be delaying or cutting capacity expansion, S-LCD's partner companies are confident consumer demand for large-sized LCD TVs will continue to grow and make their investment profitable. LG.Philips LCD's long-term capital-spending plans have been clouded further by rumors that Philips was looking to sell off its 33% interest in the company (a joint venture with LG Electronics); those rumors have picked up steam since Philips' early August sale of its semiconductor business. For more on the shifting paradigms of the panel business, see "Business of Displays," p. 8.

"Sony believes the market for large-screen TVs will expand even further, and thus needs to invest in G8 LCD panel production as soon as possible," explained Mina Naito, a spokesperson for Sony.

The S-LCD facility is currently home to a 7th-generation line, which S-LCD will continue to operate. With the combination G7-G8 facility, both companies will be able to expand capacity for 50-in.-plus LCD TVs, a joint press release from Sony and Samsung stated. The joint invest-ment in the G8 line from Sony and Samsung will total approximately $1.9 billion, with each company contributing half. Production of the G8 line is slated to begin in fall of 2007 with a planned production capacity of 50,000 panels per month.

S-LCD Corp. was established in April 2004, with the original G7 plant opening in July of that year. The G8 factory will be built on the same site, Naito said.

In addition to Sharp's new ¥150 billion G8 facility, the company currently operates a G6 plant in Kameyama City. Sharp puts the G8 line's capacity at 15,000 2,160 x 2,460 mm substrates per month, with an increase to 30,000 per month by March 2007, according to a company statement.

— Jessica Quandt


Planar to Enter New Markets With Acquisition of Clarity Visual Systems

BEAVERTON, Ore. – In a move that the company hopes will allow it to access new markets and increase profits after several tumultuous years, Planar Systems Inc. on July 19 announced its acquisition of electronic-signage company Clarity Visual Systems for $46 million in cash and stocks.

A Planar representative wouldn't comment on whether or not the purchase of Clarity signals an attempt to revitalize the company, which has suffered since its 2001 foray into the computer-monitor business resulted in declining profits. Still, Planar has been very enthusiastic about its entrance into the large-sized electronic-signage market in which Clarity is a major player.

"(The digital-signage market) is very fast-growing, and we feel that it's definitely a market that's a natural one for us to go into, given our experience in customized ruggedized displays for the industrial segment," said Planar Vice President and Chief Financial OfficerScott Hildebrandt. "If you look at our business model, we could do a lot of things that are adjacent to our existing business, or we could venture out into new territories. Obviously, the risk profile is less if we stay close to what our core competencies are, and this is certainly one of them—designing specialized displays that have higher margins attached to them and more value added is what we do. So the digital-signage business and the command-and-control-room business are both kind of natural progressions for the company."

Headquartered in Wilsonville, Ore., Clarity is a provider of command-and-control digital displays and digital-signage hardware and software systems. Its Coolsign brand produces signage systems including specialized signage monitors and networking software to the retail banking, indoor public vendor advertising, casino, and hospitality market segments. While Planar has had previous initiatives in retail signage and kiosk systems, it will look to leverage Clarity's market position in digital signage.

"(Clarity has) some definite patents and technology on the software side of things, good networking, and a lot of technical know-how in how to fit all this together and network it appropriately," Hildebrandt explained. "This market is very fragmented right now, and they have the industry experience and the technical know-how. So we're looking to carve out a space in the market with that technical know-how that they offer."

Planar, which underwent a management change in 2005 when it replaced President and Chief Executive Officer Balaji Krishnamurthy with Gerald Perkel, will install two new executives from Clarity once the acquisition is finalized at the end of 2006 or during the first fiscal quarter of 2007. Clarity President and CEO Paul Gulick will take over as Planar's vice president and chief technology officer, and Clarity Senior Vice President of Sales and Marketing Kris Gorriaran will become vice president and general manager of the newly acquired business group.

— Jessica Quandt

Display Briefs

Polymer organic-light-emitting-diode (P-OLED) development company Cambridge Display Technology (CDT) announced at the end of July its sale of ink-jet printing equipment to the Genius Institute of Technology in Brazil. The Institute will use the equipment and CDT's process know-how to develop its expertise in ink-jet printing for P-OLED technology, CDT said in a company statement.

Panasonic Consumer Electronics Co. will have its record-setting103-in. plasma TV ready for U.S. consumer purchase by the holiday season of 2006, the company said in mid-July. The display will be built to order and will cost about $70,000.

AU Optronics (AUO) and Toppan Printing Co. Ltd. on Aug. 8 announced they have combined efforts in their color-filter supply and business operation for liquid-crystal displays (LCDs) in Taiwan. This partnership between Taiwanese display manufacturer AUO and Japanese color-filter supplier Toppan marks a synergy of the ties between two leading multinationals in the global flat-panel-display industry, and also enhances AUO's supply chain in the color-filter business and its long-term cost competitiveness, an AUO company release stated.

Planar Systems Inc. will enter the home-theater market with the launch of a new business division, the company announced on Aug. 10. The new division's debut product is a front-projection display called the Xscreen that reduces glare and comes housed in a sleek, plasma-like casing. The company said the move to home-theater displays fits with its recent strategies to increase shareholder value and profit over time.

In mid-July, the Institut Für Angewandte Photophysik (IAAP) of Technische Universität Dresden in Dresden, Germany, announced that a team of its scientists had achieved a new world record in operational stability of organic light-emitting diodes (OLEDs), demonstrating lifetime of up to 10 million hours at 100 cd/m2 initial luminance.

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