Thu, Jun 03, 2004 - Page 11 News List

Chunghwa Picture says it will sue LG Philips

By Lisa Wang  /  STAFF REPORTER , WITH BLOOMBERG

Chunghwa Picture Tubes Ltd (中華映管), the nation's No. 3 flat-display panel supplier, has decided to file a libel lawsuit against LG Philips LCD Co over a patent suit involving its parent company, Tatung Co (大同), a company official said yesterday.

"We'll file a libel lawsuit against LG Philips some time soon," Liu Chih-chun (劉治軍), a vice president of Chunghwa Picture, told the Taipei Times.

Liu's comments were in response to a lawsuit filed last Thursday by LG Philips in the US against Tatung and ViewSonic Corp, claiming they are infringing on LG Philips' patents for portable computers with flat-panel screens.

LG Philips is a joint venture of South Korea's LG Electronics Inc and Royal Philips Electronics NV of the Netherlands. The company filed the lawsuit in a US federal court in Wilmington, Delaware, asking for a jury trial and unspecified damages.

Chunghwa Picture owns the rights to four of the six patents, which LG Philips says are a violation of its intellectual property rights, Liu said.

Despite Chunghwa's immediate response, Tatung said it has no plan to take action now.

"We will take action after receiving the US court's formal notification," Tatung spokesman Chang I-hwa (張益華) said. He declined to reveal how many laptops the company has shipped to the US.

Tatung is importing and selling "large quantities" of the allegedly infringing products through US retailers, including Wal-Mart Stores Inc and Best Buy Co, the suit says. ViewSonic of Walnut, California is also selling "a variety of products," that infringe on LG Philips' patents, according to the suit.

ViewSonic spokesman Trevor Bratton didn't immediately return calls seeking comment.

Alex Wu (吳興國), a flat-panel display industry analyst with KGI Securities (中信證券), expects the lawsuit will not have an immediate impact on Chughwa Picture Tubes' sales, citing the prolonged investigation process.

"It's not the first time Chunghwa Picture has encountered similar legal problems. I think LG Philips' accusation will not pose a threat to Chunghwa Picture and Tantung," Wu said.

Last year, the Taoyuan-based flat-panel maker resolved a patent infringement suit by paying an unspecified amount, he added.

But the legal problem could cause jitters among Tatung's customers, including US computer giant Hewlett-Packard Co, said an analyst surnamed Wei at Yuanta Core Pacific Capital Management (元大京華投顧).

Furthermore, Tatung could suffer a severe setback in profits if high-margin LCD-TVs are one of the items targeted by LG Philips.

Tatung and Chunghwa Picture shares fell 3.77 percent and 3.17 percent to NT$12.75 and NT$18.3, respectively yesterday.

In the year's first quarter, Chunghwa Picture earned NT$5.46 billion, or NT$0.87 per share, on revenues of NT$31.12 billion.

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