Verdict on Patent Spat Sends Shock Wave through Corporate Japan.

(From Journal of Japanese Trade & Industry (JJTI))

The development of the blue light-emitting diode (LED) is widely touted as a "Nobel prize-class invention." Nakamura Shuji, 49, a professor at the University of California, Santa Barbara, achieved the feat while working at Nichia Corp., a chemical maker based in Anan, Tokushima Prefecture. On Jan. 30, the Tokyo District Court ordered Nichia to pay an unprecedented \20 billion to the inventor of the key semiconductor device for his transfer of patent rights to the company. Nichia immediately appealed the ruling to the Tokyo High Court.

The court concluded that the patent rights are worth \60.4 billion. But given that the inventor demanded \20 billion in remuneration, the court ordered Nichia to pay \20 billion, the sum he demanded. In handing down the ruling, Presiding Judge Mimura Ryoichi said Nakamura deserves that sum since "the invention was an entirely rare example of a world-class invention attained by the inventor's individual ability and unique ideas" and Nakamura contributed at least 50% to the production of the device.

The court ruled Nichia was able to acquire an outstandingly advantageous position in the market because of its exclusive ownership of the patent, which prevented its rival companies from entering the market. It also said Nichia earned \120.8 billion in royalties, including those projected to be earned by 2010 when the patent will lapse.

"Nakamura invented the device with his individual ability in a poorer research environment than those of big companies which boast abundant personnel and material resources," it said.

Nakamura developed blue LED-manufacturing technology in 1990 while working with Nichia. The company applied for a patent and commercialized the technology to create the world's first blue LED in 1993, paving the way for the creation of flat panel ...