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Sony gets slapped with a patent-infringement suit

Sony Corp, the world's largest video-game maker, infringed patents for digital-camera technology and should have to pay US$171.4 million, a patent-licensing company's lawyer told jurors in a federal trial.

Attorney Ronald Schutz said some of Sony's cameras use technology owned by St. Clair Intellectual Property Consultants Inc that can display pictures in various formats on both International Business Machines Corp and Apple Computer Inc.

computers. Sony's lawyer denied the claim.

St. Clair sued Tokyo-based Sony in August 2001 claiming the Japanese company's products infringe equipment and processes for the multiple-format images. Schutz said Sony has sold US$3.01 billion worth of the cameras since 1998, and that St. Clair, which owns four patents for the technology awarded starting in 1992, is entitled to royalties.

"Sony is using this technology, and as a result, they must pay," Schutz told jurors on the first day of the trial.

St. Clair, of Grosse Pointe, Michigan, bought the rights to the patents and will share any jury award with the three inventors, Schutz said.

"Sony's cameras operate in a totally different manner," said the company's lawyer, Sidney David. He said that even if the jury decided Sony infringed the patents, royalties shouldn't exceed US$5.73 million.

Sony, which reported US$21.1 billion in fiscal 2002 sales, got almost half of its profit from games and films in the fiscal third quarter that ended Dec. 31.

Sony last month reported record third-quarter earnings, spurred by sales of video games for its PlayStation2 and receipts from films such as Maid in Manhattan starring Jennifer Lopez.

Sales of products such as digital cameras to holiday shoppers helped Sony increase quarterly operating profit by 14 percent.

The shares fell to a 52-week low of US$38.28 in New York yesterday. Japanese shares of Sony have lost 18 percent of their value in the past year.

Among Sony's bond issues are US$500 million in 4.95 percent notes due in 2006.
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