LED Industry Witnesses Patent Wars Among Top LED Manufacturers

Time：2015-10-23　Hits：673　Compile：SNL

According to the Chinese language magazine Money Weekly, two of the most prominent LED package manufacturers in the LED industry, LED package manufacturer Everlight and Japan’s leading LED manufacturer Nichia, have been involved in patent wars in Japan, Germany, Taiwan, U.S., and various other countries for the past decade. Nichia is one of the top five global LED manufacturers, and is spending a lot of money on patent lawsuits filed against Everlight. The primary reason behind this is the fact that patents are the only arsenal that Japenese LED manufacturers are left with, as they are rapidly falling behind Chinese and Taiwanese counterparts in production development and expansion.

Patents hold great significance in a knowledge-based economy.

The significance of patents in today’s economy can be understood by knowing the fact that even the OEM leader Foxconn has sold a number of its telecommunication related patents to Google. While the details of the transaction were not made public, it goes a long way in demonstrating the significance and worth of the patents for OEMs. 

“Patents are a company’s assets in a knowledge-based society,” says the Chairman of Foxconn, Terry Kuo. A number of leading IT and technology-related companies, including Microsoft, Intel, and Toyota, are constantly in the process of deploying effective patent strategies and techniques in consideration of the current trends in the knowledge-based economy. Although patent applications, R&D, and commercialization of products can take around 5 to 10 years to develop, these developments are likely to bring about basic structural changes in the industry. The current strategy being employed by the Foxconn will have a major impact over its future outlook and vision. 

As of 2015, Chinese manufacturers have also realized the importance of patents. Previously, Chinese domestic market was adequate enough, and it even witnessed supply shortages for certain products. At that time, no one seemed really concerned about patents. Clients were able to purchase products as long this system functioned, and had affordable retail prices. Consumers as well as manufacturers were used to the product’s quick degradation, while many of them opted for replacing broken inexpensive product with newer ones. 

With that being said, as the Chinese manufacturers took steps to enhance their production capacity, the market has suffered gradual saturation. The local Chinese manufacturers have been forced to look towards foreign markets due to the oversupply conditions and circumstances. When manufacturers look to export their products, they are often confronted with lack of patents, which hinders their access to these markets. Owing to their patent applications, the foreign competitors have banned Chinese manufacturers’ products from being sold into the International market. Now, there is no way left for the Chinese manufacturers to be able to sell their products in the International market, even if they produce and manufacturer high quality products at affordable rates. 

Japanese manufacturers are starting to engage in patent wars, as Chinese and Taiwanese LED manufacturers look to expand production capacity. And, this is probably the only way the Japanese LED manufacturers can challenge the Chinese and Taiwanese LED manufacturers in the LED industry.