Sony Says Playstation 3 Game Consoles Seized by Dutch Customs Authorities

Sony Corp. (6758) said some of its PlayStation 3 game consoles were seized by Dutch customs authorities following a patent-infringement complaint lodged by South Korea’s LG Electronics Inc. (066570)

The consoles were seized late last month, said Yasuhiro Okada, a Tokyo-based Sony spokesman, declining to specify the number of consoles taken. Ken Hong, a spokesman at Seoul-based LG, said the company doesn’t comment on pending legal matters.

The move highlights the widening legal feud between the two Asian electronics makers, which compete in products ranging from televisions to mobile phones. Sony’s earnings may be hurt if the injunction continues for more than a month, according to Shiro Mikoshiba, an analyst at Nomura Holdings Inc.

“If this is resolved within a month or so, Sony can probably avoid an impact by using its products in inventory,” Mikoshiba said.

The Netherlands confiscated thousands of Sony PS3s after LG Electronics won a court injunction over a patent claim, the Financial Times reported today, without saying where it got the information.

Sony is considering ways to divert to other shipping points in Europe, according to a person with knowledge of the plan. The Japanese maker is also considering a move to overturn the Dutch ruling, the person said, declining to be identified because the plans haven’t been made public. PS3 consoles are distributed to other parts of Europe from the Netherlands, the person said.

Patent Disputes

Sony sold 12.2 million PS3s in the nine months ended Dec. 31, or 81 percent of its annual sales target of 15 million, the company said last month. Sony’s networked products group, which handles games, posted a profit of 45.7 billion yen in the quarter ended Dec. 31, cushioning a slump in the consumer product group that makes TV and cameras.

Sony doesn’t disclose regional breakdowns of its PS3 shipments.

“Patent disputes between Japanese and South Korean manufacturers will probably continue,” said Yoshio Takahashi, a Tokyo-based analyst for Moody’s Investors Service. “Consciousness for managing patent rights is rising, especially at South Korean companies, as competition intensifies.”

Sony, Japan’s biggest exporter of consumer electronics, brought cases in Los Angeles federal court and the International Trade Commission in Washington on Dec. 28 seeking to block LG’s shipments of mobile phones, saying LG handsets use Sony’s technology without permission.

LG, the world’s third-largest maker of mobile phones, on Feb. 4 countered with complaints with the ITC seeking to block sales of Sony Bravia televisions and PS3 consoles, claiming they use LG’s patented technology without permission.

On Feb. 9, Sony filed two separate complaints with the Los Angeles court and the ITC against the South Korean company’s LCD televisions and monitors.

Sony rose 1.2 percent to close at 2,978 yen in Tokyo trading. LG climbed 1.3 percent to 115,000 won in Seoul.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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