South Korea's LG Electronics and Japan's Matsushita Electric Industrial -- the world's top two plasma TV makers -- have agreed to end their dispute over patents related to the plasma display panels (PDPs) that go into the TVs.
Under the agreement, which is still being finalised, Matsushita, known for its Panasonic brand, will withdraw an injunction filed with the Tokyo District Court to stop imports into Japan of PDPs by LG's Japanese unit, while LG will withdraw a suit filed in Korea to stop the import of PDPs made by Panasonic.
The agreement includes a cross-licensing agreement for PDPs and certain PC and DVD technologies and means an end to all legal action between the companies, LG spokesperson, Karen Park, said. She would not comment on the terms of the licenses.
Plasma panels are the key component for plasma TVs, shipments of which are rising as consumers replace their bulky CRT TVs with slim-line plasma and LCD TV models. Global plasma TV shipments were a record 1.1 million units for the final three months of last year, up 173 per cent compared to the same period during the prior year, according to US market research firm, DisplaySearch.
Panasonic was the leading plasma TV brand with a 19 per cent global market share in the last quarter of 2004, while LG was number two with 14.5 per cent, according to DisplaySearch.
The agreement comes just over a year-and-a-half after the two companies started talks over various patent issues.
In August 2003, Panasonic contacted LG, alleging that certain LG PDP models sold in Japan were in violation of two of Panasonic's patents, and asked LG to pay royalties. LG responded with claims of its own regarding various patents related to PC and DVD technologies.
After talks broke down, Panasonic last November asked for the injunction to stop the import to Japan of LG-made PDPs. The following day, LG filed a petition with the Korean Trade Commission to ban the import and sales of Panasonic PDPs in South Korea.
Dates for lifting the imports bans were not disclosed.
"During negotiations we have come to an understanding about the dispute and we are confident that we can build a mutually beneficial relationship," Panasonic spokesperson, Sam Iwai, said.