IP, Reports & Roadmaps | Jan 29, 2007

U.S. international trade commission administrative law judge rejects Philips Lumileds’ request to prohibit importation into the U.S. of downstream products containing Epistar’s LED products

Hsinchu, Taiwan-- The Administrative Law Judge (“ALJ”) of the U.S. International Trade Commission (“USITC”) issued his Recommended Determination that sets forth the final order the ALJ believes should be issued by the USITC. In his Recommended Determination, the ALJ did not recommend that a cease and desist order be issued, and rejected Philips Lumileds’ request to extend a limited exclusion order to third-party finished products.

On January 8, 2007, the ALJ issued his Initial Determination that Epistar’s Omnidirectional Mirror Adhesion (“OMA”), Glue Bond (“GB”) or Metal Bond (“MB”) LEDs do not infringe any claims of Lumileds’ “wafer bond” patents (U.S. Patents No. 5,502,316 and No. 5,376,580). Furthermore, the ALJ found that the OMA and GB LEDs do not infringe any claims of Philips Lumileds’ U.S. Patent No. 5,008,718 (“the ’718 patent”). Only the previous MB design was found to have infringed two claims of the ’718 patent. Based on that finding, only the older version of the MB products are subject to the Recommended Determination, if it is adopted by the USITC.

The Recommended Determination states that any limited exclusion order would allow third parties to certify that the products they are importing do not contain infringing LEDs. Because Epistar has revised the design of its MB products to remove the feature that the ALJ believes infringes the ’718 patent, the Recommended Determination would allow Epistar’s customers to import the new MB LEDs by stating their understanding that the LEDs do not infringe the ’718 patent.

In addition, Lumileds’ request for exclusion of third party “downstream products” that contain the Epistar MB LEDs was rejected by the ALJ, who found that Lumileds had failed to present any evidence that such a broad order was warranted. The exclusion order recommended by the ALJ would only apply to LED chips, packaged chips, and circuit boards on which such packaged chips are mounted. Manufacturers of finished goods such as traffic signals, automobile turn indicators and cell phones would not be subject to that recommended order at all. Epistar today filed a Petition with the International Trade Commission, asking it to review the determination that the old MB product design infringes the ’718 patent. It remains Epistar’s strong belief that the ALJ’s determination with regard to the old MB LEDs was in error, and Epistar has asked the USITC to issue a Final Determination that there is no infringement by any of Epistar’s products. The USITC is expected to issue its Final Determination on or about May 8, 2007. Any limited exclusion order would not come into force until after a sixty-day period in which the President of the United States will review and, if he deems necessary, veto or modify that order. As such, Epistar does not expect any order, if one is issued, to become effective until July 8, 2007.

About Epistar Corporation
Epistar Corporation, headquartered in the Hsin-chu Science-based Industrial Park, Taiwan since September 1996, focuses on developing, manufacturing and marketing high brightness Light Emitting Diode (LED) products. Applying its own proprietary Metal Organic Vapor Phase Epitaxy (MOVPE) technology, Epistar has successfully commercialized the full spectrum range of high brightness LEDs with the characteristics of compact size, low power consumption and long operation life. For further information, please visit: http://www.epistar.com.tw/news-e.htm

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