China’s Haier sues Samsung, LG over TV patents in New York

Chinese electronics manufacturer Haier filed a lawsuit against South Korean rivals Samsung and LG Electronics and some others over their monopoly on patents related to the production of televisions with a New York court, according to news reports Thursday.

Haier claimed in the suit that Korean TV makers and others pay a patent licensing company named MPEG LA too much for royalties for patents required by the US Federal Communications Commission for manufacturing digital TVs.

Defendants sued by Haier include Zenith Electronics, Philips and Panasonic. 

The patents, chosen as standards by the Advanced Television Systems Committee and adopted as requirements by the FCC, are sold at a fixed price of $7 per digital TV, according to the complaint, which Haier says makes it unfair for companies like low-end product makers to pay the same amount of royalties as those by large premium TV makers like Samsung, whose products are priced north of $2,000.

“Defendants acquired monopoly power in the ATSC standard essential technology market by making false promises to the ATSC and the FCC -- specifically, defendants falsely promised that they would license ATSC essential technology on a fair, reasonable and non-discriminatory basis,” the complaint said.

Claiming such a flat structure of royalties damages lower price-tier television sellers like Haier, the company is likely to demand damages worth of millions of dollars.

It also said MPEG LA’s patent portfolio included some patents not required by the FCC.

Samsung declined to officially comment on the litigation.

“We will be careful until reviewing the suit,” a company official said. “Since we are not the only company sued, it is not likely we will respond to it alone.”

According to the electronics industry, Haier’s lawsuit seems like an unreasonable claim as it is struggles to expand its presence in the US market.

“Haier’s claim sounds like the five companies kind of colluded to fix the royalty, excluding Haier in the negotiations,” an industry official said. “Since the company is a newcomer to the US market, it might be complaining about the small presence of the company.”

Samsung has dominated the US LCD TV market, with a 21.6 percent share last year, retaining the top spot for the past eight years, according to data by market researcher Statista. LG followed with 11.9 percent share.

“There are higher possibilities of legal disputes with Chinese companies that are accelerating growth in the global market, particularly the US,” said another industry official.

Haier acquired the home appliance unit of US-based General Electric last year to boost business.

By Song Su-hyun (song@heraldcorp.com)