03.02.2006 Overview

OSRAM Opto Semiconductors wins patent action in USA against Dominant Semiconductors

Dominant must no longer sell the specified LEDs to the USA. Action also brought in Germany.

Osram Opto Semiconductors has won a patent action in the USA against Dominant Semiconductors Sdn. Bhd., a Malaysian manufacturer of light emitting diodes (LEDs). The US International Trade Commission ruled that Dominant has violated US competition law by infringing fundamental patent rights of Osram Opto Semiconductors. Dominant may therefore no longer import numerous LED products into the USA. Osram has also filed an action for patent infringement against Dominant in Germany.

"The court clearly established that Dominant used our technology illegally and has taken the necessary action in imposing an import ban," said Dr. Rüdiger Müller, President and CEO of Osram Opto Semiconductors. "The decision of the court also highlights Osram’s strength in patents. We are a highly innovative company."

The International Trade Commission (ITC) has informed Dominant that by infringing Osram's patent rights it has violated US competition law. Dominant is forbidden from importing its "Power DomiLED" and "Super Small DomiLED" into the USA. Two US dealers of Dominant LEDs involved in the investigations have already signed declarations that they will no longer import or sell the relevant LEDs from Dominant. Investigations into these two dealers were dropped.

The ITC found that all the patents enforced by Osram are valid in law and that Dominant violated nine of these patents. Osram was able to prove patent infringement by all the Dominant products listed in the complaint filed in July 2004. The "Power" and "Super Small DomiLED" products from Dominant infringe a total of four different Osram patents. The ITC also found that Dominant's LEDs listed in the complaint which emit white light infringe another five Osram patents, but Dominant pointed out that the white LEDs have been modified since the action was filed and no longer infringe these patent rights. Osram however maintains that these modified white Dominant LEDs still infringe Osram patents. In addition, Osram has obtained a dismissal of Dominant's retaliatory lawsuit by the Court in California.

Osram will continue to fight patent violations by Dominant. As part of this fight, it submitted a claim against Dominant in Germany in July 2005. Two German sales partners of Dominant have already announced that they are cancelling their business relationships with Dominant. Osram has filed an action against two further German dealers of Dominant products for violation of ten different patents and utility models. In one case, a judgment by confession on all charges has been passed; in the second case, the defendant admitted violating seven of the ten patents including the white light patents. An initial hearing on the outstanding charges will be taking place soon in front of the civil court in Mannheim.

After many years of intensive research and development Osram now has a large number of patents for LEDs. There are numerous patents still pending, so Osram will be further strengthening its already strong position in this field. Major LED manufacturers such as Nichia and Rohm in Japan, Vishay in the USA and Germany, Everlight, Harvatek, Lite-On and Yashin in Taiwan, Samsung in Korea and Lednium in Australia make use of core Osram technology and have signed license agreements with Osram.

The patents enforced by Osram against Dominant relate to two fundamental technologies. One technology is for producing LEDs that use a phosphor to convert the blue light of a semiconductor chip into white light. A typical application for these LEDs is backlighting displays in mobile phones and car dashboards. Osram Opto Semiconductors developed this technology from the middle to late 1990s and was the first company to launch white single-chip LEDs in the market.

The other technology is for LED structural packages that dissipate heat generated by semiconductor chips in LEDs, such as the chips used in high-power LEDs. A typical application is automotive lighting, including both interior lighting and rear light clusters.

About Osram
OSRAM is one of the two leading lighting manufacturers in the world. In the year ending September 30, 2005 the company, headquartered in Munich, achieved sales of 4.3 billion euros, 88 percent of which came from outside Germany. OSRAM is a high-tech company in the lighting sector. Around 40 percent of sales comes from innovative products. This global player employs more than 38,000 people worldwide, supplies customers in some 150 countries and has 49 production facilities in 19 countries.

About Osram Opto Semiconductors
Osram Opto Semiconductors GmbH, Regensburg, is a wholly owned subsidiary of Osram GmbH. Osram Opto Semiconductors offers its customers solutions based on semiconductor technology for the lighting, sensor and visualisation sectors. It has sites in Regensburg, San José (USA) and Penang (Malaysia). In the 2005 fiscal year (to September 30, 2005) its 3500 employees produced sales totalling EUR 452 million. For more information go to www.osram-os.com.

This report contains statements relating to future events that are based on assumptions and estimations made by the corporate management of Osram. Although we consider that the expectations expressed in these statements are realistic, we cannot guarantee that they will turn out to be true. There may be hidden risks and uncertainties that may in turn cause the actual outcome to be materially different from the statements. Factors that may cause such differences include changes in the economic and social environment, fluctuations in the exchange and interest rates, the launch of competitive products, lack of acceptance of new products or services, and changes in business strategy. Osram does not intend to update the statements, nor does Osram accept any obligation to do so.