Sony files lawsuit to ban shipments of LG cell to US
NEW YORK: Sony Corp., Japan's biggest exporter of consumer electronics, filed patent-infringement claims seeking to block LG Electronics Inc. from shipping mobile phones to the U.S.
Sony filed the complaints Dec. 28 with the U.S. International Trade Commission in Washington, and in a federal court in Los Angeles. The ITC, which is considering at least a dozen cases related to the expanding market for smartphones, has the power to block imports of products found to violate U.S. patents. The federal court can impose financial penalties.
LG phones including the Lotus Elite, Neon, Remarq, Rumor 2 and Xenon are using Sony technology without permission, Tokyo-based Sony said in the civil lawsuit. LG, the world's third-largest maker of mobile phones, is also being targeted in Sony's patent suit for its Blu-ray disc players. A copy of the ITC complaint wasn't immediately available.
"Sony has been keen to protect its patents," said Yuji Fujimori, a Tokyo-based analyst at Barclays Capital. "U.S. is an important market for Sony as its mobile phone venture with Ericsson is trying to win a bigger share."
The Japanese electronics maker fell 1.3 percent to 2,919 yen as of 1 p.m. in Tokyo trading. LG gained 3.1 percent to 117,500 won in Seoul. The eight Sony patents in the federal court case include ones related to a way to display telephone-number listings, direction keys on a portable phone and signal transmission.
John Taylor, a spokesman in the U.S. for Seoul-based LG, said the company doesn't comment on pending litigation. Sony plans to invest 100 billion yen ($1.2 billion) over the next fiscal year to double production capacity for image sensors used in smartphones. A company spokesman this week said an Asahi newspaper report that Sony may start selling a PSP handheld game machine equipped with a phone was "speculation."
LG, which plans to begin sales in January of the first smartphone built with a dualcore processor, said Dec. 27 it's trying to boost revenue at its consumer electronics, displays and handsets units by 13 percent in 2011. The company lags behind Nokia Oyj and Samsung Electronics Co. in sales of mobile phones, according to researcher Gartner Inc. Global sales of all models of mobile phones to end users rose 35 percent in the third quarter to 417 million units, Stamford, Connecticut-based Gartner said last month. There were 80.5 million smartphones sold. The ITC typically completes its investigations in about 15 months, faster than the district courts.
Sony's ITC case is In the Matter of Certain Mobile Telephones and Modems, Complaint No. 2777, U.S. International Trade Commission (Washington). The civil suit is Sony Corp. v. LG Electronics USA Inc., 10cv9967, U.S. District Court for the Central District of California (Los Angeles).
Moreover, in a separate news item, Nintendo Co. will bar children ages 6 and younger from using the 3-D functions of its new handheld game machine at an introductory event for the device.
"Looking at 3-D images for a long time may harm the growth of children's eyes," Nintendo said in a note to visitors coming to the event next month, posted on its website. The company's new 3DS players will be promoted at the three-day event in Chiba prefecture, near Tokyo. The handheld, which can show 3-D images without using special glasses, is Nintendo's biggest portable product debut since the 2004 release of the touchscreen DS player, which sold more than 132 million units worldwide. The world's largest maker of video-game players will start selling the product in Japan from Feb. 26 and in the U.S. and Europe the following month. Nintendo, based in Kyoto, also said users should take a break every 30 minutes when playing games in 3-D format or stop playing immediately if they feel ill. The company faces intensifying competition from Sony Corp. and Microsoft Corp., which have introduced motion-sensing controllers for their videogame consoles, while Apple Inc.'s iPhone and iPad devices are increasingly being used for gaming. Nintendo fell 1.5 percent to 24,050 yen as of 10:30 a.m. in Osaka trading, narrowing its gain this year to 9.1 percent. Japan's benchmark Nikkei 225 Stock Average slid 1.2 percent. In a separate news item, Private trading that helped spur paper gains of 50 percent or more in companies such as Facebook Inc. and Twitter Inc. is raising questions about how much investors know about their financial condition.
Facebook, Twitter and other venture-backed Internet companies have seen their combined value rise 54 percent since June, according to a report this month by Nyppex LLC that focused on so-called secondary transactions that involve buying stock from existing shareholders. The Wall Street Journal and New York Times reported that the Securities and Exchange Commission is seeking information about transactions in Facebook, Twitter, Zynga Game Network Inc. and LinkedIn Corp.
While backers of venues such as New York-based SecondMarket Inc. that match buyers and sellers in private companies say they meet a demand where no public market exists, Frank Mazzola of Felix Investments says it makes sense regulators would want a clearer picture of trading. Dixon Doll, co-founder of the venture-capital firm DCM, says regulators may be studying how the venues affect rules related to how many people own companies that aren't registered for trading.
"Any time when you have something that's growing and dealing with private investors, scrutiny is a good thing," said Mazzola, a partner at New York-based Felix Investments LLC, which arranges pools to invest in nonpublic companies. His firm's rivals in that business include EB Exchange Funds LLC and GreenCrest Capital LLC. -Courtesy Bloomberg