Thu, Aug 25, 2011 - Page 11 News List

HP files lawsuit against Taiwan’s AU Optronics

LEGAL WOES:Last year, the US Department of Justice said AUO executives and other industry officials met regularly in Taipei hotels and eateries to agree on prices

Staff Writer, with CNA and Reuters

Hewlett-Packard Co (HP) has filed a case in a US court against AU Optronics Corp (AUO, 友達光電), saying the Taiwanese company conspired to fix the prices of thin-film LCD panels, court documents showed.

The complaint, which sought damages from AUO, was filed under seal to protect HP’s confidential information about the company’s process for procuring LCD panels, according to a court filing made by Jun Kim, HP’s general manager for the Displays Business Unit.

AUO, the nation’s second--largest LCD panel maker, said yesterday that it was trying to get a better understanding of the situation.

The company declined to elaborate.

Earlier this month, a South Korean regulator ruled that AUO had infringed competition law, along with other LCD makers such as Chimei Innolux Corp (奇美電子), Taiwan’s top LCD panel maker.

Last year, the US Department of Justice accused AUO executives of participating in a group of industry officials who met regularly in Taipei hotel rooms and restaurants to discuss and agree on prices, from 2001 to 2006.

Apple Inc, Dell Inc and HP were among the companies directly affected by the alleged scheme, the agency said.

After the indictment, AUO repeatedly claimed its innocence and vowed to fight the allegations to clear its name.

In addition to legal concerns, investor worries over the company’s bottom line because of falling product prices have also put pressure on AUO’s share price.

In the second quarter of this year, AUO posted a net loss of NT$10.77 billion (US$371 million), or a loss per share of NT$1.22, considerably higher than the NT$8 billion in losses anticipated by the market.

On the Taiwan Stock Exchange, AUO shares fell 1.20 percent to close at NT$12.35, with 41 million changing hands after news of the suit surfaced.

Market analysts said they expected the weakening pricing power in the global flat-panel -sector to continue to impact the sector’s profitability, as screen makers are incurring a loss every time they sell a panel in the market’s current down cycle.

Lawsuits, especially patent disputes, are common in the technology sector as manufacturers seek to protect their newest technologies from being commoditized and exploited by rivals, but most are settled out of court as big companies prefer to avoid long fights and patented technology can be out of date by the time a case is over.

In April, AUO and Japan’s Sharp Corp signed a patent cross--licensing agreement and agreed to withdraw all lawsuits they had filed against each other.

AUO and South Korea’s Samsung Electronics Co have also filed patent suits against each other this year.

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