Wed, Apr 04, 2007 - Page 11 News List

Compal settles with LG Electronics

By Lisa Wang  /  STAFF REPORTER

Compal Electronics Inc (仁寶電腦), the world's second-biggest laptop computer maker on a contract basis, yesterday said it would pay unspecified royalties as part of an out-of-court settlement with LG Electronics Inc over a long-running patent infringement lawsuit.

"We settled the lawsuit on April 3. We will be able to use the patent in designing products for our customers in the future," Compal spokesman Gary Lu (呂清雄) said.

The settlement came after a ruling in favor of the South Korean company by the US Court of Appeals last July.

Lu declined to disclose the amount of the royalty payments. but he said the payment "will not erode the company's first quarter financial result."

Another unlisted Taiwanese computer maker First International Computer Co (大眾電腦) also agreed to settle a patent dispute with LG Electronics yesterday.

LG Electronics had filed patent lawsuits against FIC and Compal with a US court in 2000 and 2001, respectively, claiming the Taiwanese companies had sold computers in the US market that use data-transmitting technology, also known as peripheral component interconnection, without its permission.

"Taiwanese electronics companies like Compal have been facing similar patent disputes as their bigger competitors seek to slow their rapid expansion through legal means," said Sean Hsiao (蕭文良), a computer industry analyst with Fubon Securities Investment Services Co (富邦投顧).

The patent disputes between Acer Inc, the world's No. 4 computer brand, and industry leader Hewlett Packard Co was the latest case, Hsiao said.

Royalty payments, or penalty fines, were usually not the focus of such disputes, Hsiao said. As such, he did not expect Compal to sustain serious losses from the settlement with LG.

Compal shares were unchanged at NT$28 on the Taiwan Stock Exchange yesterday.

"Intellectual property is one of LG's essential assets, which we will always uncompromisingly protect," said Lee Jeong-hwan, executive vice president and head of LG's Intellectual Property Center, in a statement.

"This settlement will positively impact on our negotiations with other PC makers," Lee said.

LG Electronics' patent, which the Taiwanese companies infringed, applies to all computers manufactured worldwide including laptops and desktops.

LG already has royalty contracts with 10 computer makers and is pursuing contracts with 30 other manufacturers, the company said.

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