What can manufacturers do when phosphor powder prices plunge? Should these manufacturers follow others lead and slash prices to keep market shares, or should they stand on the sidelines as spectators? How can manufacturers change their market strategies?

“If you are a lighting manufacturer, you will always worry about patent infringements one day,” said Alex Lee, General Manager, China, Intematix. “Purchasing Intematix’s phosphor powder is a safety guarantee.”

Patents are being used as a protective shield in the industry. Luckily, Intematix has a collection of patents, which can be handy arsenal during patent wars. According to Intematix’s official figures, the manufacturer has more than 160 authorized patents globally including 100 U.S. patents. Up to 30 percent of the company’s employees are R&D staff, who continue to develop new products and make new patent applications.

“The only way to avoid infringing Intematix’s patented solutions is to buy our phosphor powder,” said Yi-Qun Li, the company’s Vice President and Chief Technology Officer. Li made the remarks during a LED phosphor forum on June 10, 2014 at Guangzhou International Lighting Exhibition in Guangzhou, China. To back his point, Li compared the chemical components of patented phosphor between different international manufacturers.

The company is also fully responsible for the products sold, and willing to provide legal guarantee that the products do not infringe other patents, noted Li. Clients using “GAL+XR” will have even better patent protection. “Most importantly, if clients products are sued (for patent infringement), Intematix will pay for lawyer fees and compensation.”

The importance of LED patents cannot be emphasized enough. Nichia and Everlight’s patent wars are still raging on. Earlier, five international manufacturers Nichia, Osram, Cree, Philips and Toyoda Gosei interchanged patent rights for blue LED chips and YAG white phosphor powder. The above five companies LEDs will still dominate the heavily patent protected U.S. and European markets. Seoul Semiconductor, Bridgelux and Epistar have all exchanged blue LED chips with one of the five major international companies, such as Cree, Nichia, or Philips. Nichia has limited YAG white LED patents to related industries including Sharp and Citizen.

Over the past few years, most LED patent wars have involved white light patents. Most YAG white light LEDs outside of the Chinese market face huge risks. Intematix’s advantage lies in patent guarantee and phosphor powder, noted Li. The company has made many contributions assisting LED package manufacturers to avoid Nichia’s patents.

In 2004, Intematix developed silicate series phosphor powder and successfully applied for content and application patents. The company also helped Taiwanese LED package manufacturers bypass YAG patents in the following year. By 2006, Samsung recognized silicate phosphor powder could avoid Nichia’s patent and be widely used in backlight products. The company also helped Chinese package manufacturers solve decorative luminaire export issues.

In more recent years, Intematix’s Gal (LuAG) series provided a solution for high CRI LED lighting applications in 2010. Samsung, Sharp, LG, Everlight and Unity Opto were the first to accept the patent’s value. The company’s latest high CRI white phosphor powder released in 2014 is a guaranteed white LED patent.

Worth noting, no Chinese manufacturers has made it as a global top 10 LED manufacturer. Chinese manufacturers exporting to the European, American and Japanese market tend to choose patent protected LED components.

Adding on top to Chinese manufacturers’ awkward situation has been plunging phosphor powder prices despite of growing phosphor volume and demands. “North American clients are more willing to negotiate prices because they respect patent rights, and also because their products are sold at much higher prices,” said Li. “They are more concerned that the products you purchase do not have patent issues and are safe to use…but in the Chinese market, the industry does not care about patents, and will keep the prices low.”

“It might seem economic to buy cheap phosphor powder, but companies might also pay a very high price if patent infringement is involved,” said Li. “The defendant might lose even more money in compensations.”

(Author: Amber Liu, Chief Editor, LEDinside Chinahttp:// Translator: Judy Lin, Chief Editor, LEDinside)