LG Loses Round in U.S. LED Fight With Siemens Unit Osram

LG Electronics Inc. (066570) lost the first round of a trade dispute brought by Siemens AG (SIE)’s Osram unit over patents covering the manufacture of lighting technology that’s replacing the incandescent bulb.

LG and LG Innotek Co. (011070) infringed one Osram patent for light- emitting diodes while a second patent wasn’t infringed, U.S. International Trade Commission Judge David Shaw said yesterday in a notice posted on the agency’s website. The reasons behind the judge’s determination will be made public after both sides get a chance to redact confidential information.

The judge’s findings, if upheld by the full commission, could result in a ban on imports of certain lighting products made by LG Innotek, which is part-owned by LG and supplies LEDs to it. It’s just one case in a global battle for market share, and LG has filed its own complaint with the agency seeking to block Osram products from the U.S. market.

LG said that, while pleased with the part of the case it won, it will challenge the finding of infringement.

“LG is confident that it will prevail in the final ITC determination or on appeal to the United States Court of Appeals for the Federal Circuit, if necessary,” John Taylor, an LG spokesman said.

LEDs, a type of semiconductor, are transforming how light is provided in cars, electronics, utilities and homes as they replace incandescent bulbs, fluorescent tubes and high-pressure sodium lights.

U.S. Imports

Osram, the world’s second-largest maker of lighting products behind Royal Philips NV, is trying to curb LG’s imports into the U.S. of televisions, computer monitors and lights that use LEDs. Its inventions cover ways to make white LEDs, which can have more uses than the traditional red, blue or green diodes.

The patent found to be infringed relates to a semiconductor that emits a blue light and has a layer to convert that light to white. The patent Shaw said wasn’t infringed is for a way to make the components so they are less likely to fail from exposure to heat, such as in the manufacturing process.

The infringement finding “underlines the strength of Osram’s intellectual property in core conversion technology which is commonly used in white LEDs,” said Stefan Schmidt, a spokesman for Osram.

Other Claims

In a separate case, Munich-based Osram is pursuing other patent claims against Seoul-based LG and Samsung Electronics Co. in a trial that’s under way before a different agency judge.

LG and Samsung have each filed patent-infringement cases against Osram at the ITC, with trials scheduled for August. They also have cases pending in Asia and Europe. A court in Hamburg said June 21 that LG infringes an Osram patent on the conversion technology, and LG has a chance to respond to that finding, Schmidt said.

Siemens, Europe’s biggest engineering company, is planning to spin off Osram, which had sales of 5.03 billion euros in the year through Sept. 30, so the unit can better expand in the LED market. Munich-based Siemens is expecting the LED market to increase to 9.8 billion euros ($12 billion) by 2013 and the total lighting market to grow 44 percent by 2016.

Royal Philips has projected that LEDs will grow to about 45 percent of the lighting market by 2015.

The LG case is In the Matter of Certain Light-Emitting Diodes, 337-784, and the Samsung ITC case is In the Matter of Light-Emitting Diodes and Products Containing Same, 337-785, and both U.S. International Trade Commission (Washington).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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