LG sues Hisense
While Hisense (009921.CH) is a relatively new TV brand in the US, it is the 4th largest TV manufacturer worldwide, and grew TV sales in the North American market by 34.3% and in the US by 65.1% at the mid-point of this year. LG Electronics (066570.KS) is the 2nd largest TV brand in the US, and while not growing as fast as Hisense, has an almost 18% share of the North American market. LG also owns a number of patents involving LED backlighting and networking that have been used by Hisense in a variety of TV products assembled in Mexico and then sold in the US. In particular, when a TV is used as a ‘smart’ device, meaning it is connected to the internet directly, it can use protocols that are covered by a number of LG’s patents, as do a number of the Hisense TV sets sold here.
LG notified Hisense of potential patent violations at the end of January and widened that notification in June, entering into a back and forth letter exchange between the two companies that continued until they met in China last July. Again, letters passed back and forth, with LG entertaining the idea of license negotiations, but Hisense continually asked for additional information while maintaining sales of the affected products in the US. Yesterday LG filed a complaint against Hisense for the unlicensed use of their backlighting, WLAN technology, and two additional patents. LG is asking for an end to the infringement, adequate compensation, and court costs, which will likely translate into a final license fee that gets negotiated right before the trial begins.
LG notified Hisense of potential patent violations at the end of January and widened that notification in June, entering into a back and forth letter exchange between the two companies that continued until they met in China last July. Again, letters passed back and forth, with LG entertaining the idea of license negotiations, but Hisense continually asked for additional information while maintaining sales of the affected products in the US. Yesterday LG filed a complaint against Hisense for the unlicensed use of their backlighting, WLAN technology, and two additional patents. LG is asking for an end to the infringement, adequate compensation, and court costs, which will likely translate into a final license fee that gets negotiated right before the trial begins.
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