Korea and Japan’s Second PDP War

Nihon Keizai Shimbun reported yesterday that Matsushita filed for a provisional disposition to ban sales of LG Electronics PDP panels in Japan to the Tokyo District Court, claiming that LG Electronics’ Japanese corporation violated PDP related patent right. Matsushita also applied for an import ban of LG Electronics products to Tokyo customs.

Matsushita said, “LG Electronics used two technical patents concerning the cooling down of heat produced by PDPs without permission, and so we have been discussing patent usage fees for a year. However, LG Electronics did not pay us, and thus we are filing a suit against it.”

On the other hand, LG Electronics, right after hearing the news, claims that it will actively fight this directly and said, “Matsushita only applied for an import ban to receive more patent fees as negotiations about Cross License (exchanging each other’s technology patent) between us is not working in its favor.”

LG Electronics’ Patent Center chief, Managing Director Hahm Soo-young, said, “During the process of negotiation, Matsushita overvalued its patents and devaluated LG Electronics.” He added, “Applying an import ban directly to the customs without going through the machinery of law is clearly an unjustifiable act.”

LG Electronics decided to file a patent violation banning lawsuit and claim for damages against Panasonic Korea, ask the government for an import ban on Matsushita products, file patent violation lawsuit in all LG Electronics Corporation around the world, and also file a lawsuit to the WTO.

PDP modules’ market capacity is expected to grow from $2.3 billion in 2003 to $10 billion in 2007, making it a high-value industry. Until 2001, Japan was the only player, dominating 97 percent of the world market. However, since 2002, Samsung SDI and LG Electronics have increased their market share to 50 percent.

On the other side of the coin, the patent lawsuit between Fujitsu and Samsung SDI, filed earlier this year ended with both companies exchanging their technologies. There is a hope that Matsushita and LG Electronics will follow suit.

Do-Young Kim Hun-Joo Cho nirvana1@donga.com hanscho@donga.com