IP Law Daily LED packager fails to shed new light on infringement ruling
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Friday, April 28, 2017

LED packager fails to shed new light on infringement ruling

By Jody Coultas, J.D.

Everlight Electronics Co., Ltd. was unable to show that a Texas district court erred in finding that it infringed Nichia Corp.’s light-emitting diode (LED) patents or that the patents were invalid, according to the U.S. Court of Appeals for the Federal Circuit. The appellate court also declined to overturn the lower court’s denial of an injunction against Everlight (Nichia Corporation v. Everlight Electronics Co., LTD., April 28, 2017, Stoll, K.).

Nichia, the world’s largest supplier of LEDs, also researches and develops LED technology. Everlight, which buys chips from suppliers and packages them into LEDs, was accused by Nichia of infringing its U.S. Patent Nos. 8,530,250 (the ‘250 patent), 7,432,589 (the ‘589 patent), and 7,462,870 (the ‘870 patent), which disclose package designs and methods of manufacturing LED devices. Specifically, the LEDs at issue are smaller than 1 millimeter in height and used in LCD backlights, video displays, automotive applications, and general lighting applications.

A district court in Marshall, Texas, found that Everlight infringed all three patents and that the patents were valid, but denied Nichia’s request for a permanent injunction. Both parties appealed.

The ‘250 patent. The ’250 patent is directed to a process for manufacturing LEDs that purportedly improves production efficiency, and describes making a continuous sheet of LEDs and separating, or "singulating," them to make the final product. The district court found claims 1, 7, 17, 19, and 21 of the patent were infringed and were not invalid.

The Federal Circuit rejected Everlight’s argument that the district court erred in construing disputed terms in the ‘250 patent. Everlight was also unable to show that it did not infringe the ’250 patent. Everlight asserts that the patent was obvious based on "Hitachi," Japanese Patent Pub. Tokukai No. 2007-235085, in combination with "Sanyo," Japanese Patent Pub. Tokukaihei 2011-191562, or "Glenn," U.S. Patent No. 6,433,277. However, a person of ordinary skill would not have considered Glenn or Sanyo to modify Hitachi.

The ‘870 patent. The ’870 patent discloses an LED design that purportedly minimizes structural problems caused by components expanding and contracting at different rates during thermal cycling.

Everlight argued that its products did not meet the ’870 patent’s requirement that its positive and negative lead electrodes are "partially disposed" on the bottom surface of a recess. However, the district and appellate courts rejected Everlight’s position and found the disputed element met. Also, Everlight’s position was contradicted by the patent itself. The ’870 patent discloses several embodiments where the bottom of the recess is multi-featured. Thus, the court correctly concluded that Everlight’s products infringe where the leads are exposed through gaps in the resin.

A person of ordinary skill in the art would not have modified cited prior art in light of other prior art, contrary to Everlight’s argument, according to the court. The references disclosed different structures, resolved dissimilar problems, and proposed dissimilar solutions. Thus, the court affirmed the district court’s conclusion that Everlight failed to prove the ’870 patent invalid as obvious.

The ‘589 patent. The court affirmed the lower court’s holdings with respect to Nichia’s ‘589 patent. The ’589 patent is directed to the design of a semiconductor device and discloses a design seeking to prevent adhesive from overflowing into other areas of the device. Everlight challenged the court’s finding that it infringed the ’589 patent with the same arguments that it made against its infringement of the ’870 patent. Thus, the court affirmed the infringement holding. Also, Everlight’s argument that the ’589 patent was invalid in light of two prior art references was rejected because it would not have been obvious to a person of ordinary skill in the art to combine the two references.

Injunctive relief. It was not an abuse of discretion to deny Nichia an injunction because Nichia failed to prove that it would suffer irreparable harm absent the injunction, according to the Federal Circuit. The district court found that Nichia failed to establish past irreparable harm, or the likelihood of irreparable harm in the future based on lost sales or "based on price erosion." Nichia’s arguments that there was "meaningful competition" between the parties and that it would suffer future irreparable harm because of past lost sales were already heard and decided by the district court, and there was no err in its analysis. Nichia identified only three out of 516 sales opportunities in which Everlight was a competitor. Thus, there was an "absence of actual competition" and the "justification for an injunction" was remote. Nichia only claimed one instances of a lost sale, and failed to establish that Everlight was responsible for causing any lost sales.

The cases are Nos. 2016-1585 and 2016-1618.

Attorneys: Chen Li (Rothwell Figg Ernst & Manbeck) and Collin Michael Maloney (Ireland Carroll & Kelley PC) for Nichia Corp. Richard C. Vasquez (Vasquez Benisek & Lindgren, LLP) and Harry Lee Gillam, Jr. (Gillam & Smith, LLP) for Everlight Electronics Co., Ltd., Everlight Americas, Inc. and Zenaro Lighting, Inc.

Companies: Everlight Electronics Co., Ltd.; Everlight Americas, Inc.; Zenaro Lighting, Inc.; Nichia Corp.

MainStory: TopStory Patent FedCirNews

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