American ITC to Probe AUO-Vs-Sharp Patent Dispute

Taipei, March 8, 2011 (CENS)--The U.S. International Trade Commission (ITC) will investigate AU Optronics Corp.'s (AUO) violation of Sharp's LCD technology patents under the Section 337 of Tariff Act 1930, according to the ITC press release.

In late January, Sharp filed suit with the U.S. ITC and Delaware Federal District Court, accusing AUO, a Taiwanese display panel maker, of manufacturing LCD panels and modules that infringe its technology patents. Also, AUO's downstream clients, including BenQ, Haier, LG, TCL Corp., and Vizio Inc., may be implicated for selling LCD TVs using AUO's LCD panels. If the U.S. ITC and court rule for Sharp, all products made and sold by the said firms will be banned from the U.S.

We respect third party intellectual property rights, expect others to do so in return and will protect our corporate interests and that of our customers, commented AUO regarding the suit.

A similar precedent occurred in 2004 when Sharp sued the Taiwanese TV maker Teco for selling LCD TVs built with AUO's patent-violating display panels. To protect client's interest, AUO settled with Sharp, signing a patent cross-licensing agreement with the Japanese firm in 2005 to end the dispute.

Market observers say that Sharp, to cope with excess output in its 10-generation factories, will likely be forced to reconcile with AUO on the current suit, which may yield the benefit of snapping up orders from AUO's downstream clients.

The patent-infringement sword cuts both ways apparently. Sharp is also accused by Panasonic's subsidiary Sanyo Electric for violating four of the latter's patented LCD technologies in Japan and is asking for compensation.