Mature LED applications are driving the industry into a new lighting era, and has opened up a new round of patent strategies. Taiwanese LED manufacturers have invested in technology R&D and patent strategies to acquire a niche in upcoming patent competition. On Feb. 26, 2014 Taiwanese LED chip manufacturer Epistar announced a cross licensed patent agreement with Philips. This is the first time Philips has entered into a patent agreement with a Taiwanese company, showing that Epistar’s technology and patent capability has already reached international recognition. This provides the company with extra protection against any possible future infringements.
Basic LED patents were controlled by Philips, Osram, Cree, Nichia, and Toyoda Gosei. The companies who created a Patent Protection Network through cross licensed patent agreements. However, as these patents reach expiration date in the next few years and with continual LED application field growth, companies such as Epistar, Samsung, LG, and Seoul Semiconductor have recently been investing in R&D to increase their patent strength as well as become part of the patent protection network through patent license agreements.
Epistar signed a cross licensed patent agreement before with Toyoda Gosei in 2010 before its recent agreement with Philips in 2014. This is the first time that Philips’ entered a patent agreement with a Taiwanese manufacturer. The cross licensed patent agreement between Epistar and Philips will not only help strengthen Epistar’s global position in the LED industry, but also reduce production costs, decrease dangers of patent infringement, and secure order sources, said Morgan Stanley.
Following the cross license patent agreement, Epistar said it plans to focus more on technology R&D, increasing chip efficiency, and lowering costs. In the past, the company mainly focused on how to avoid infringing competitor’s patents. Now the company can develop patents according to user needs. As the industry enters into the lighting era, the supply chain has put an emphasis on speed. Securing cross licensed patent agreements with large manufacturers will allow them to increase the pace of product R&D and development.
The cross license patent agreement between Epistar and Philips will be a win-win situation for both, said industry insiders. This shows a deepening cooperation between the two companies. Over the past two years, Epistar has been working on a secret project and has often leaked news that Philips was interested in the company’s stocks.
Taiwanese manufacturers active patent strategies
Aside from Epistar’s patent success, Taiwanese chip manufacturer Forepi, LED package manufacturer Everlight, and LED manufacturer Lextar are actively strategizing patents. Lextar applied for 208 patents in 2013, with a total of 177 being developed, putting them at the top for domestic LED patent applications. Everlight recently has also been increasing its patent strength over the past few years, going head to head with Nichia over patent litigations. Forepi has also entered into a cross license patent agreement with Toyoda Gosei, similar to Epistar. The two companies signed the agreement in 2012.
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