On August 4, Cree and Epistar announced the signing of a worldwide patent cross-license agreement. The agreement lays out the strategies these two global LED manufacturers have on maintaining marketing positions through patent advantages.
Under the cross-license patent agreement, Cree and Epistar will each receive a license to the other’s nitride LED chip patents and will be granted certain rights to non-nitride LED chip patents. During the term of the agreement, Epistar will be paying Cree a licensing fee and royalty payments, assuming that the two companies maintain their clientele relationships and a sustainable business model. Both companies have extensive blue and white LED patent portfolios.
Over the past year, LED industry patent infringement lawsuits include those between Nichia and Everlight, and Cree’s patent lawsuits against Unity Opto and Feit Electric. These ongoing LED patent disputes demonstrate the industry’s top five LED manufacturers’ determination to utilize patent portfolio advantages to maintain their leading market positions.
In the U.S., federal government policies, the strength of the U.S. dollar, and product promotions set forth by lighting manufacturers show that the demand for LED lighting in construction projects, commercial lighting and residential lighting markets is rising steadily.
Major lighting brands light bulb shipments will grow exponentially in 2015. Responding to this trend, Cree filed a patent infringement lawsuit against Unity Opto and Feit Electric in January 2015 to retain its market position. The scope of the lawsuit includes LED package, LED chip, bulb and operation designs. In total, the suits allege infringement covered 10 patents related to LED lighting includes eight invention patents and two design patents.
The recent global LED patent cross-license agreement signed between Cree and Epistar is another example of the U.S. LED manufacturer’s strategy in the lighting application sector. The patent license agreement is aimed at boosting revenue growth in the LED lighting and LED bulb markets.
This trend in patent related alliances and lawsuits is expected to continue into the near future as large lighting manufacturers take actions to consolidate their positions in the global market.