Creator of blue LED wins ¥20 billion patent payout

Nichia had earlier rewarded him with ¥20,000

The Tokyo District Court on Friday ordered midsize chemical maker Nichia Corp. to pay an unprecedented ¥20 billion to the inventor of a key semiconductor device for his transfer of patent rights to the firm.

The award to Shuji Nakamura, a professor at the University of California at Santa Barbara who developed the blue light-emitting diode while working at Nichia, is the largest ever in Japan for the transfer of patent rights.

Presiding Judge Ryoichi Mimura concluded that the Anan, Tokushima Prefecture-based firm had earned ¥120.8 billion in royalties for the patent.

Nakamura contributed at least 50 percent to the patent earnings and is therefore entitled to ¥60.4 billion from his employer, the judge said.

However, the court ordered Nichia to pay Nakamura ¥20 billion — the amount that he had demanded in the suit.

The blue LED, which emits blue light when electricity passes through it, was a revolutionary invention that enabled the creation of all other color in display panels. It was the last of the three LED types necessary to produce other colors, the green and red LEDs having appeared many years earlier.

Judge Mimura said in handing down the ruling that Nakamura deserves that sum because “the invention was a totally rare example of a world-class invention achieved by the inventor’s individual ability and unique ideas in a poor research environment at a small company.”

“I am very much relieved that the court has awarded an amount that matches the once-in-a-century invention,” Nakamura said after the ruling. “The court decision will give Japanese engineers a chance to dream. . . . I would have been disappointed in Japan as a nation if I had lost. I would have told my fellow researchers to travel to the United States.”

Nakamura said the amount of his court-recognized reward is big “just because the market is big.”

Nichia said it will appeal the ruling to the Tokyo High Court. The district court decision “overestimates” the one patent disputed in the suit and fails to give a fair assessment of the contribution by the company and many other researchers at Nichia to the commercialization of the blue LED technology, it said in a statement.

Nakamura himself said he assumed the case will go all the way up to the Supreme Court.

The lawsuit has drawn widespread attention as an increasing number of former employees in Japan are suing their employers over ownership of their inventions and seeking compensation for what their employers earn from them.

The ruling may have the potential to change the mind-set of Japanese corporate engineers, whose selfless devotion to their employers has long been taken for granted.

The amount awarded to Nakamura far exceeds the 163 million yen awarded one day earlier to a former Hitachi Ltd. employee over the transfer of patent rights related to optical discs — at that time the record figure in such suits.

It is a million times more than the ¥20,000 that Nakamura initially received from Nichia for his contribution to the LED device.

When Nichia filed for a patent for a manufacturing device for the LED in 1990, the year Nakamura invented it, the company said it had no clear-cut provisions on ownership of the patent.

The firm succeeded in commercialization of the device in 1993, the first such device in the world.

Nichia has since seen its sales rise from just over ¥20 billion to more than ¥80 billion in 2001, of which some 60 percent was from blue-light LED products, according to an interim ruling on the case in 2002.

Blue LEDs are used in mobile phone screens and large outdoor displays and are deemed essential for commercializing the next generation of large-capacity DVD systems.

Nakamura’s achievement has long been touted as a “Nobel Prize-class” breakthrough. According to Nakamura, his fellow researchers overseas once teased him for being a “slave” for receiving only a minimum amount for his great achievements.

He earlier commented that rewards for Japanese engineers who support the nation’s economic growth are too low compared with, say, pro baseball players who earn hundreds of millions a year.

Nakamura quit Nichia in 1999 and filed the lawsuit Aug. 23, 2001, claiming the patent was his and he never gave it to the company. He also sought ¥2 billion for Nichia’s use of the patent.

He claimed he invented the technology virtually all by himself as the company ordered him to halt the study on it, viewing blue LED development as an impossible feat. Nichia argued it did not have to pay because it contributed greatly to the invention.

But an interim ruling in September 2002 stated there was an understanding between Nichia and Nakamura that he would give patent rights to inventions to the company.

Nakamura later raised his demand to ¥20 billion to include earnings the company is expected to receive in the future from the patent.

He said two audit firms have estimated Nichia would receive up to ¥280 billion from the patent in the future.

Nakamura, a native of Ehime Prefecture, joined Nichia in 1979 and worked there as an engineer until 1999.

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