Siu Han, Taipei; Jackie Chang

 

The big LED lighting pie has been attracting many firms to enter the market, heating up competition between traditional and new firms. Fierce competition can lead to patent wars as the top five LED firms in the world have been expanding the range of patents. These patents will become obstacles to small- and medium-size firms' survival in the long-run.

Currently, Europe-based large-size lighting firms Philips and Osram have been issuing patent permits on LED technologies. According to Philips, when LED lighting customers buy LED light source components from Philips, within the range of the patent permit, customers do not have to pay patent fees. Osram and Philips have also reached an agreement that the former can obtain patent permit from the latter in the future, which means customers of Osram can also enjoy such privilege.

Cree also has an agreement with Osram for the mutual use of LED patents. This agreement includes patents over technologies such as blue LED chips, white LED and items such as phosphor, packaging, LED light bulbs, lighting fixtures, and LED lighting control systems. Cree and Osram also have agreements with Japan-based Nichia and Toyoda Gosei.

According to industry sources, the agreements over patents can help accelerate the growth of LED technologies in applications and lower the risk of infringing on other companies' patent rights.

Philips, Osram, Cree, Nichia and Toyoda Gosei make up the top five LED firms in the world. These firms have long used patented technologies as competitive advantages. But as LED applications have been expanding, the old patents are no longer sufficient to fend off newcomers. Hence the cooperation between these firms.

Nevertheless, the top five firms have been facing challenges from firms such as Samsung, and LG. Osram was the first to file patent infringement lawsuits against Samsung over white LED patents. Samsung and LG returned with a lawsuit against Osram to prevent the sales of any automobiles that are equipped with Osram products in China and South Korea.

Taiwan-based LED packaging house Everlight recently won a lawsuit against Nichia for invalidation of patents.

Small- and medium-size Taiwan-based LED firms are likely to suffer more than strongly funded Samsung and LG if they trip over the landmines of lighting patents owned by large-size international firms. Paying patent fees seems inevitable.

The lighting market has been sparser than other technology fields and as LED lighting diversifies, the firms with the most patents will likely win.