Not long ago, some media reported that the patent infringement lawsuit filed by WAC Lighting, an American lighting design manufacturer, against Lumien Enterprise, Inc., ended in a settlement agreement. The latter is a subsidiary of Jiangsu Sur Lighting Co., Ltd. in the United States. The reporter understands that the signing of the settlement agreement means that the latter may be forced to give up part of the US market.

This is the latest in the frequent patent litigation in the field of LED lighting in recent years, and the relevant news caused an uproar in the circle as soon as it was released. In this regard, industry insiders said that behind these lawsuits is the patent game of major enterprises, and the results of the patent game directly affect the changes in the market. So, what is the patent layout in the field of LED lighting? Who owns the core patents? How can domestic enterprises break patent barriers?

Status: Frequent patent litigation

In recent years, patent litigation in the field of LED lighting has been reported frequently, in addition to the patent infringement of Lumien Enterprise, Inc., there are also many cases such as patent litigation between Dehao Runda and LUMILED LLC.

Jiangsu Comfort Lighting Co., Ltd. is a foreign trade enterprise of LED lighting, and its products are mainly exported to European and American countries. Similar to the company, another LED upstream company has also been in the spotlight due to an intellectual property lawsuit.

At the end of 2019, DHR announced that the company was issued a warning letter by the regulator due to problems such as failure to disclose major matters in a timely manner, which directly pointed out that the company's intellectual property litigation related to LUMILED LLC was not disclosed in a timely manner, violating the principle of good faith disclosure. Not only that, due to the impact of multiple factors such as intellectual property lawsuits, markets, and profits, at the end of September 2019, the company laid off the production staff of the LED chip factory and sealed the equipment, and the factory has stopped production operations.

From the end of the 19th century to the present, the electric light source has gone through four different stages of development: incandescent lamp, fluorescent lamp, halogen lamp, energy-saving lamp and LED lamp. LED lighting has attracted the attention of more and more countries in the world for its good energy-saving and environmental protection performance, and has been developed and patented by international giants such as Nichia Chemical and Philips. China has also launched green lighting projects and semiconductor lighting projects, initially forming a complete industrial chain, and has certain advantages in upstream and downstream integrated applications.

"China's huge market and integrated innovation have brought development opportunities for local enterprises." The relevant person in charge of the semiconductor lighting industry technology innovation strategic alliance introduced to this reporter. According to the forecast of the LED Research Institute (GGII), China's LED lighting output value will reach 445 billion yuan in 2020, a year-on-year increase of 14.1%, and the proportion of the global market is expected to reach 61%.

China's huge lighting market has given birth to dozens of LED listed companies, such as San'an Optoelectronics, HC Semitek, Lianchuang Optoelectronics, etc., which are upstream of the industry; Lehman Optoelectronics, National Star Optoelectronics, Mulinsen, etc. in the middle of the industry; Opple Lighting, Foshan Lighting, NVC Lighting, etc. in the downstream of the industry. "The complete industrial chain and huge market have made China's LED lighting industry develop from the previous one to the current one." The relevant person in charge of an LED lighting company told reporters.

"The huge market contains huge development opportunities, but also hides greater competitive risks." Liu Hanlun, founder of Beijing Weihao Intellectual Property Agency, who has been concerned about the development of the LED industry for many years, told reporters that at present, LED general lighting has been relatively mature, and the growth of market scale has encountered a bottleneck. In order to maintain the sustainable development of enterprises, lighting companies that occupy the first opportunity in research and development will inevitably take up patent weapons and initiate patent lawsuits. The reporter found that in the past five years, there have been dozens of patent lawsuits in the field of LED lighting, and the companies involved in the litigation include both upstream monocrystalline and epitaxial enterprises, midstream chip companies, and downstream application integration enterprises.

Dilemma: Patent barriers have been erected

"From the perspective of the global LED patent layout, key technology patents are in the hands of international LED giants such as Nichia Chemical and Philips, and a strict patent network has been established in the early stage of development, and the leading power is firmly in hand." Liu Hanlun said that in order to ensure their market share, foreign LED lighting giants have established patent barriers very early, restricted the development of competitors through patent rights protection, and obtained patent infringement compensation.

Li Hui, an intellectual property data expert in Hexiang, found that as of March 14, 2020, there were hundreds of thousands of patent applications in the global LED field, and the top three countries in terms of the number of patent layouts were Japan, the United States and China, with 103,811, 68,292 and 66,446 related patent applications respectively. "From the perspective of the global invention patent application trend in the LED field, from the birth of the technology in 1962 to 1994, the number of invention patent applications in this field is in a stable development stage, with an average annual application volume of no more than 3,000; From 1994 to 2010, the number of related invention patent applications showed a gradual growth trend, of which the peak in 2010 was more than 25,000 related invention patent applications worldwide, and after 2010, the number of related invention patent applications showed a gradual downward trend, and by 2018, the number of global invention patent applications in the LED field dropped to about 12,000. Li Hui believes that the decline in the number of relevant invention patent applications is closely related to the technology entering the mature industry period.

From the ranking of global patent applicants in the LED field, the top ten patent applicants are OSRAM, LG, Philips, Sharp, Samsung Electronics, Toshiba, Rohm Semiconductor, Stanley Electric, Nichia Chemical, Panasonic Electric, etc. Among them, there are more than 6,000 patent applications related to OSRAM and LG. From the perspective of China's patent applications, the top 10 applicants are LG Innot, Royal Philips, LG Display, Epistar Optoelectronics, Sharp, Zhanjing Technology, Rongchuang Energy, Osram, Osram Opto, Nichia Chemical, these companies have more than 600 related patent applications in the field of LED in China.

Patent assignment is one of the indicators to measure high-value patents. Li Hui found that up to now, the five companies with the most patents transferred in the field of LED in the world are Osram, Corninglik Philips, Royal Philips, Samsung LED, LUMILED LLC, and the number of related patent transfers involved is 1959, 1803, 1157, 1107 and 1094 respectively. It is worth mentioning that from the perspective of patent litigation in the field of LEDs, OSRAM and its related companies have the highest degree of patent litigation activity in this field, and the number of patents involved in patent litigation in this field is the largest, followed by Seoul Semiconductor and Seoul Viosy, Nichia Chemical and its related companies, Cree, SATCO Products, etc.

Breaking the game: deeply cultivating subdivisions

"LED is a relatively mature industry, and R&D efforts and product iteration have slowed down." Liu Hanlun believes that it is not easy for Chinese enterprises, as latecomers, to achieve major breakthroughs in patents. The relevant person in charge of the above-mentioned LED lighting enterprises also believes that the LED industry has developed so far, it has been difficult to have major innovations and breakthroughs, and the company is ready to work epitaxial products.

In the face of patent barriers, many domestic industry associations and industrial alliances have taken practical measures. For example, the Guangdong Semiconductor Lighting Industry Joint Innovation Center, together with leading enterprises in the industry, initiated the establishment of the "LED Industry Patent Alliance", established a standardized system on the basis of industry development, key technology and key enterprise cultivation, established an LED industry patent pool, and promoted the alliance's internal patent management and external licensing. However, the above-mentioned person in charge of the semiconductor lighting industry technology innovation strategic alliance said frankly that at present, although the patent pool has been established and achieved certain results, it is not significant enough, mainly due to the lack of patent operation talents and high-value patents.

On the one hand, San'an Optoelectronics, a listed LED lighting company, supports the construction of patent pools, and on the other hand, it has sufficient patent ammunition arsenal by acquiring high-value patents. Since 2015, Sanan Optoelectronics has received 65 patents from Sharp Co., Ltd., involving technologies such as light-emitting devices, semiconductor light-emitting devices and their manufacturing methods, semiconductor light-emitting components, light-emitting diode arrays and their manufacturing methods. There are also LED lighting companies that explore high-value patents by cooperating with scientific research institutes. For example, Lehman Optoelectronics cooperated with Shenzhen University to develop and submit a patent application for "a COB encapsulant and preparation method thereof" (application number: CN201910954167.4). The patent application discloses a small-pitch chip-on-board encapsulant and its preparation method, aiming to solve the problem of serious warpage of PCB board caused by curing shrinkage and thermal expansion effect of existing COB encapsulant resin.

In order to increase innovation, many LED companies have crossed over into other subdivisions (such as the electrical industry, etc.) to seek diversified development, such as BOE and TCL R&D layout of MiniLED. There are also companies that aim at high gross profit market segments such as automotive lighting, smart lighting, and horticultural lighting. For example, the home improvement cutting-edge love space announced an in-depth cooperation with Xiaomi IOT, and jointly launched a whole-house smart lighting package including Xiaoai speakers, wall switches, wireless switches, body sensors, Xiaomi Xiaoai alarm clocks, and multi-functional gateways.

In Liu Hanlun's view, at present, a hurdle in front of domestic enterprises is still the five patent giants of LED lighting. However, the good news is that some foreign patent giants see that LED lighting has matured and intend to withdraw from this industry, and Chinese companies can take the opportunity to enhance their competitiveness by acquiring patents or investing in related companies. (Reporter Chen Jingqiu)