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Court awards Nakamura $189m

03 Feb 2004

A judge has ordered Nichia to pay Shuji Nakamura ¥20b in compensation for the blue LED patents he filed while working for the company.

Shuji Nakamura, the researcher credited with Nichia’s phenomenal success in the nitride LED and laser field, has been awarded a sum of 20 billion yen ($189 million) in compensation for patents that he filed while working for the Japanese company.

Nakamura, who left Nichia in 2000 to take an academic post at the University of California at Santa Barbara, was paid 20,000 yen for each of the many patents that he filed while working for Nichia. At one stage, he continued his ground-breaking research in violation of written instructions from his superiors to stop working on nitride-based devices.

In September 2002, Nakamura lost his claim that he, rather than Nichia, owned the patents. However, the court recognized that Nakamura was entitled to compensation based on the amount of profit generated by the intellectual property for which he was responsible.

In his ruling announced on January 30, presiding judge Ryoichi Mimura estimated that the patents in question could have generated a total of 120.8 billion yen ($1.14 billion) for Nichia by the time they expire in 2010. The judge also ruled that Nakamura’s contribution was “not less than 50%”, saying that the patents “had made possible the commercialization of blue LEDs.”

With the total value of the transfer of patent rights from Nakamura to Nichia valued at $60.4 billion yen, the judge awarded Nakamura the 20 billion yen that he had requested when filing the lawsuit.

The judge commented that Nakamura deserved the 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 pleased that my contribution was recognized as 50%,” said Shuji Nakamura. “This ruling will increase the incentive for researchers to invent, and companies will profit from it over the long run as well.”

However, rather than reaching for the company check-book, Nichia appealed the decision later in the day. A company spokesperson said that “the unfair ruling overvalued the patent rights in dispute while failing to properly assess the contributions of the company and many other researchers.”

Nichia argued that, as of 2002, the cost of building its manufacturing infrastructure and continuing its research and development programs had exceeded the revenue generated from the patents by 1.5 billion yen.

•  The patent ruling in the Nichia-Nakamura case came one day after another judge awarded 163 million yen to a former employee of Hitachi for the transfer of patent rights in the filed of optical discs. However, since the patent in question had expired, future profits were not a factor.

Tim Whitaker is Consulting Editor with Compound Semiconductor magazine.

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