A landmark case: Patent lawsuit costs Japanese chemical company 20 billion yen


On January 30, the Tokyo High Court ordered Nichia Chemical, a leading manufacturer of fine chemicals in Japan, to pay 20 billion yen to a key inventor of various blue LED patents.  This amount equals more than $186 million.

Shuji Nakamura, Professor of the University of California, invented the formula for a high-intensity blue light-emitting diode, and filed for a patent through Nichia Chemical in October 1990.

The Court decided that the total compensation from Nakamura’s invention was 60.4 billion yen.  Nakamura had initially claimed he should receive 20 billion yen from Nichia, where he was once employed.  The Court realized that Nakamura should receive that amount of 20 billion yen, as the appropriate portion of the total remuneration for his invention.

In the verdict, the Court recognized that Nichia’s exclusive right to the LED patent contributed to a substantial benefit for the company, and that Nakamura’s invention played a crucial role in manufacturing the high-intensity blue LED.

The defendant, Nichia Chemical, filed an appeal against the verdict.

Nakamura, on the other hand, intends to further claim approximately 40 billion yen, the rest of the 60.4 billion yen remuneration for his invention that the Court determined.

Japan seems to be the only country, among all of the leading nations, where the number of lawsuits involving crucial inventors has been increasing, and the amount of remuneration (compensation for their inventions) they claim has also been increasing.  This is said to be because of Japanese Patent Law Article 35, which says, “the employer must pay the employee a reasonable compensation separately from his or her salary,” which does not clearly define what “a reasonable compensation” is.

(Posted January 30, 2004)