Settlement in blue LED patent suit could reach 1.5 billion yen

Nichia Corp. and former researcher Shuji Nakamura are negotiating a settlement worth ¥500 million  to ¥1.5 billion over their high-profile dispute on the patent for the blue light-emitting diode, according to sources familiar with the lawsuit.

The Tokyo High Court recommended in December that the 50-year-old researcher, now a professor in the United States, settle with the chemical maker based in Anan, Tokushima Prefecture.

Nichia has appealed a lower court ruling from January 2004 that ordered it to pay Nakamura ¥20 billion in compensation for the invention.

“Although the two parties differ sharply in their arguments, it is desirable that they settle the suit under amicable terms,” presiding Judge Hisao Sato of the high court said in the December court session.

Nakamura and Nichia have since discussed a settlement along a proposal made by the high court. Under the proposal, the amount of compensation Nakamura would receive has been lowered substantially from the 20 billion yen ordered by the district court, apparently in consideration of the serious impact a payment that big would have on the firm, the sources said.

The next round of talks between the two parties is scheduled for this week, the sources said. The high court will hand down a ruling March 28 if no settlement is reached.

The Tokyo District Court ruled that Nakamura’s invention of the blue LED in 1990, when he was a Nichia employee, was worth ¥60.4 billion. It ordered Nichia to pay ¥20 billion, the full amount Nakamura demanded, as a reward for the patent transfer.

Nichia only gave him ¥20,000 for his invention. He left the company in 1999 and sued Nichia in 2001.

The blue LED was put into practical use in 1993. It emits blue light when electricity passes through it and was a revolutionary advance that enabled the creation of all colors in display panels when combined with red and green LEDs.

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