Amid rising patent disputes in the technology sector, AU Optronics Corp (AUO, 友達光電) and Samsung Electronics Co announced an agreement yesterday to cross-license their LCD patent portfolios.
AUO, the nation’s No. 2 LCD panel maker, and Samsung, the world’s largest LCD panel maker, also agreed to withdraw all pending legal actions against each other, the Taiwanese company said in a filing to the Taiwan Stock Exchange yesterday.
In May 2010, AUO won a patent lawsuit against LG Display Co in the US.
The latest legal settlement came a day after Elan Microelectronics Corp (義隆電子), a Taiwanese manufacturer of chips and touch screens, reached an agreement with Apple Inc to stop all patent-infringement litigation against each other and to cross-license patents related to multi-point touch panel technology.
AUO said that its deal with the South Korean company showed their respect for each other’s massive research investment in advanced display technology.
“Through the cross-licensing of our respective patent portfolios, AUO and Samsung can develop more advanced thin-film-transistor (TFT)-LCD display technologies,” the Hsinchu-based company said in the filing.
Samsung accused AUO and its customers, such as Acer Inc (宏碁), BenQ Corp (明基) and Sanyo Electric Co (三洋電機), of infringing on a number of its display patents.
The South Korean company in June last year filed a complaint against AUO with the US International Trade Commission and also started legal proceedings against AUO in US federal courts in Delaware and California.
In response, AUO immediately sued Samsung and its customers, including AT&T Inc and Best Buy Co, later that month in the federal courts in Delaware and Califonia for allegedly infringing some of its LCD panel patents. The Taiwanese company also filed a complaint with the US International Trade Commission against Samsung.
The two companies’ settlement yesterday would likely help them to fend off increased legal attacks by rivals in the flat-display industry.
However, they did not disclose financial terms of the deal or specifics regarding their intellectual property portfolios.
AUO shares fell 1.90 percent to NT$12.9 in Taipei trading yesterday before the company’s announcement of the litigation settlement, while the benchmark TAIEX dropped 0.15 percent, Taiwan Stock Exchange data showed.