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Nakamura loses Nichia patent battle

23 Sep 2002

A Japanese court has ruled that Shuji Nakamura does not own the patents he filed while working for Nichia - but he is still eligible for a reward.

Shuji Nakamura has lost his claim against his former employer, Nichia Corporation, that he is the rightful owner of a patent filed when he still worked for the Japanese LED manufacturer. However, the court recognized that Nakamura is entitled to a reward for the patent, and is now deciding how much he should receive.

Nakamura filed his lawsuit on August 23, 2001, claiming ownership of Japanese patent number 2,628,404 and requesting ¥2 billion ($16 million) in compensation. The 404 patent dates back to 1991 and relates to two-flow MOCVD technology, which was a key factor in allowing Nichia to develop high-brightness, long-lifetime InGaN/GaN LEDs and lasers.

After commercializing the technology, Nichia's annual sales grew from just over ¥20 billion ($160 million) to ¥80 billion ($650 million) in 2001, around 60% of which was generated by nitride LED products.

When Nakamura filed each of the dozens of patents that he authored while at Nichia he received ¥10,000 ($81) and the same amount when they were granted. During the development of the two-flow technology, Nakamura ignored written instructions from his superiors to stop working on blue LEDs.

Under Japan's Patent Law, an employee owns a patent filed while working for a company, although the company also has rights to use the invention. However, the court accepted Nichia's claim that it owned the patent because Nakamura "received ¥20,000 in reward and filed no objection for over 10 years after the patent application."

The Patent Law also requires companies to reward their employees for patents that are transferred to the employer. The court in Nakamura's case ruled that he is eligible for a "proper amount of rewards" and is now considering that aspect of the lawsuit.

Nakamura's attorney said the decision upholding Nichia's ownership of the patent was "totally unexpected" and that an appeal would be filed.

Tim Whitaker is editor of Compound Semiconductor magazine.

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