Backgrounds of the Case
Patent in suit
Professor Shuji Nakamura at the University of California, Santa Barbara, a former employee of Nichia Corporation, made great inventions concerning the "blue LED" during his employment at Nichia Corporation in the 1990's. Until his inventions came to the fore, no GaN semiconductor of a desirable crystal form had been produced at large-scale facilities that could be used for the industrial production of the blue LED. Attempts by not a few companies met with disastrous failures and no company had ever successfully manufactured the blue LED until Nakamura achieved the feat. Nobody but Nakamura believed that a stable production of blue LEDs could be realized before the turn of the 21st century.
Nakamura had overcome manifold onerous problems that hampered the stable formation of the desirable crystal for the LED through his own vigorous efforts and a flash of genius. He decided to set his hand to the blue LED project by himself. Then he persuaded Nichia's president to send him to the University of Florida to study the blue LED technology for just one year. After returning from his foreign study, he threw himself wholeheartedly into his work to develop the blue LED, but the company wouldn't give him any help that left him doing all the work by himself. Worse still, the top executives constantly kept frustrating his project. One of the board members who is now at the helm of Nichia, repeatedly ordered Nakamura to give up the blue LED because he thought the company's resources were inadequate to develop the technology. Despite the adversity that surrounded him and the obstructions that constrained his work, Nakamura eventually pulled it off and achieved the industrial scale production of GaN type semiconductor having a desirable crystal form for the blue LED by using the equipment he had developed on his own. He filed a series of patent applications in the name of Nichia Corporation. However, the president's open hostility toward Nakamura was persistent and unceasing. When he knew that Nakamura had filed patent applications, the CEO ordered the IP division to withdraw all the patent applications filed by Nakamura. Nakamura put up a good fight against the CEO and managed to keep some important applications alive, though the company skillfully brought off withdrawing significant parts of the applications filed. Some of the applications Nakamura was able to retain and put under his control were later granted patents including the one involving the present suit.
In 1994, Nichia launched the blue LED into the market exploiting the technology created and developed by Nakamura. Nichia's success in the market was promising because the blue LED was a long-awaited technology and Nichia was the sole player in the market then. Nichia had only been a very small company mainly manufacturing phosphor for fluorescent lamps before it launched the blue LED. It has now grown to be the largest "blue LED" manufacturer among the three competitors. It recorded cumulative sales of around US$ 2 billion from 1994 to 2002 and its sales are skyrocketing in recent years, with cumulative sales for 1997 through 2010 projected to be about US$ 10 billion.
After leaving Nichia, Nakamura sued the company claiming remuneration for his employee inventions under Art. 35 of the Japanese Patent Law. Nakamura initially claimed about US$ 1 million in compensation, but during the course of court proceedings he raised it to about US$ 180 million (JP\ 20 billion). The Tokyo District Court closed the case on January 30, 2004 and ordered Nichia to pay Nakamura the full amount, JP\ 20 billion, to compensate for his employee inventions in conformity with Art. 35 of the Patent Law. |
