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Comment: LG-Sony IP game not over yet

Friday 11 March 2011 17:03

Sony may have won this battle, but the war is still continuing in the saga between two of the world's electronic giants, Sony and LG.

Two weeks ago, LG obtained an injunction against Sony that halted the import of an estimated 300,000 Sony PS3s in the Netherlands. Now LG has lost that the first phase of the case and is liable for substantial damages payable to Sony.

However, Sony will still have to defend LG's patent infringement allegation at a later date - the game playing isn't over yet, says Ilya Kazi, patent attorney from intellectual property advisor Mathys & Squire.

"It is quite common for Border Protection to be used in cases of trademark infringement where counterfeit goods are using someone else's logo as it is relatively straightforward to identify infringements. But it is rare in the patent environment as patent infringement is more complicated and less clear-cut, with issues of validity to determine.

"Should Sony lose the next phase of the case, it would then have to compensate LG for every unit sold, given that a recall of the product would be unworkable and even more expensive. Of course, Sony starts with the financial damages awarded to them from LG yesterday so it won't hit their pocket quite as hard!"

There are still several other separate patent disputes in train between the two electronic giants including one brought by Sony last year citing seven infringements of patents in connection with LG's smartphones that attempted to block imports into the US, and two complaints from LG in connection with Sony's Blu-ray players and PS3s as well as certain televisions in the US.

Three years ago, both companies failed to renew a technology sharing agreement that had been in place for some time. As Kazi says, "It is clear the issue is heating up. Consumer electronics manufacturers generally settle disputes commercially by way of cross-licenses. However LG's action here serves as a poignant reminder that, if a licensing deal is not reached, ultimate success in a patent infringement action might prevent Sony from selling PS3s anywhere in Europe, and would have to pay substantial sums back to LG which would be disastrous for them."

Neither LG nor Sony is currently getting much sympathy within the online gaming community it seems. Somewhat ironically, in what appears to be a very unpopular move, Sony has recently stepped up its legal actions to identify individuals who did nothing more than view YouTube videos showing various hackers unlocking or 'jailbreaking' the secrets of the PS3 console.

On the other side of the coin, LG's original action was viewed as doing nothing more than causing problems and inconvenience for gamers who have yet to receive their PS3s, with one blogger saying 'this makes me feel sick, I refuse to purchase another LG product again'.

In a new twist to the 'push me pull you' nature of the relationship, on the other side of the world in Korea, the two firms are discussing joining forces in a deal surrounding the 3D TV market.

Ilya concludes, '"IP wars' is unlikely to be the next greatest hit for PS3 players but there is no doubt, the story hasn't ended yet. If the two of them team up and decide to play nicely together on the 3D TV playing field, we might start to see IP infringement issues being raised against them by competitors like Samsung. As a patent attorney, whilst it is refreshing to see the importance attached to IP, ultimately I'd like to think commercial pragmatism will win the day."

Colin Hallmark, on behalf of Mathys & Squire

 

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