By Susan Decker
Nov. 10 (Bloomberg) -- Samsung Electronics Co., the world’s largest maker of liquid-crystal display televisions, should be banned from selling certain LCD-TVs and computer monitors in the U.S. after losing a patent case filed by Sharp Corp., a U.S. trade agency said.
Yesterday’s decision from the U.S. International Trade Commission in Washington now heads to President Barack Obama, who can overturn the ban if he finds it’s contrary to the public interest. Samsung also asked an appeals court that specializes in patent law to put the ban on hold while a challenge to the underlying patent case is pending.
It’s unlikely that the ban would take effect before the December holidays because of the 60-day presidential review period. Samsung, which can sell LCD-TVs that don’t use Sharp inventions, said the ITC ruling doesn’t have any impact on its business because it’s already using technology that bypasses the Japanese company’s patents, according to spokesman James Chung.
“There will be no problems for Samsung with products that have workaround technology,” said Park Young, an analyst at Woori Investment & Securities Co. in Seoul. The possibility of an actual ban may be low because it would be counter to the public interest for U.S. consumers, according to Park.
Samsung rose 0.8 percent to 730,000 won as of 12:11 p.m. on the Korea Exchange, while the benchmark Kospi stock index added 0.6 percent.
U.S. Market Share
U.S. LCD-TV shipments by all companies are expected to rise 7.3 percent to 8 million units in the fourth quarter, according to market research firm ISuppli Corp. of El Segundo, California. Samsung had 19.9 percent of the U.S. market in the second quarter, the most recent period for which figures are available, ISuppli said. Vizio Inc. had 20.5 percent to maintain its top spot and Sharp was seventh with 5 percent, according to the researcher.
The order prevents Samsung from selling any LCD TVs or monitors that have inventions covered by four patents owned by Osaka, Japan-based Sharp. The patents are for a way to control the alignment of the liquid crystals to improve brightness and response speed; an LCD with a wider viewing angle; and two inventions related to techniques to reduce flickering in the display.
The ITC said that Suwon, South Korea-based Samsung will have to post a bond that covers 100 percent of the value of the imported products during the presidential review period so it can continue sales. Samsung declined to put a value on the bond.
The commission previously upheld an ITC judge’s finding that Samsung infringed the Sharp patents. The commission said yesterday that the public-interest factors “do not preclude issuance” of an order banning imports or sales of imported products.
“We believe that ITC’s ruling has made it clear that ITC has consistently supported Sharp’s claim that LCD products of Samsung are violating Sharp’s patents,” said Christopher Loncto, a spokesman for Sharp.
Lee Soo Jeong, a spokeswoman at Samsung, said the company will take “appropriate” legal action.
“We are fully committed to honor our responsibilities to our business partners and are taking appropriate action to meet the market demand for Samsung LCD panels and products without any interruption,” she said by telephone today.
The ITC also has issued exclusion orders on TVs made by both Vizio and Sharp. Sharp is not allowed to import Sharp LCD televisions, including ones sold under the Aquos name, that infringe a Samsung patent for an LCD with a wider viewing angle. That case, which also affected some computer monitors, is on appeal.
“We continue to ship Aquos LCD TVs to the U.S., as we have launched models with technology not affected by that ruling,” Loncto said.
Vizio, based in Irvine, California, is under investigation by the ITC as to whether it is violating an order that precludes it from importing LCD-TVs that infringe a patent owned by Japan’s Funai Electric Co. for a method that lets digital TV receivers identify programs, broadcast channels and program descriptions to viewers. Vizio contends it has worked around the Funai patent.
The case is In the Matter of Certain Liquid Crystal Display Modules, 337-634.