"LG Display to Pay 120 Billion Won in Damages"… Japan's Sharp to Seek Compensation for Patent Contract Breach

The exterior view of Sharp Osaka headquarters, a Japanese company acquired by Taiwanese electronics manufacturer Foxconn.

[Asia Economy Reporter Park Sun-mi] LG Display, which went as far as the Singapore International Arbitration Centre over a patent usage contract with Japan's Sharp, will be able to receive 120 billion KRW in damages.

On the 25th, LG Display announced that Sharp Japan has agreed to comply with the Singapore International Arbitration Centre (SIAC) decision to pay LG Display 11.747 billion yen. According to the announcement, LG Display and Sharp filed an arbitration request with the Singapore International Arbitration Centre on December 6, 2019, regarding a patent usage contract violation.

The two companies had a cross-license agreement signed in December 2013 to mutually use intellectual property in the display field, but LG Display judged that Sharp violated the contract in certain areas and filed for arbitration. Initially, LG Display claimed damages amounting to approximately 840 million USD (1.0605 trillion KRW).

However, LG Display did not disclose the specific contract violations by Sharp as the arbitration matters at the international arbitration center are subject to confidentiality.

The Singapore International Arbitration Centre ruled that Sharp had contract violations and ordered payment of damages amounting to 95.19 million USD, which is 11.747 billion yen, approximately 120 billion KRW. This amount is about three times LG Display's operating profit of 38.3 billion KRW in the first quarter, which sharply declined due to the adverse effect of LCD price drops this year. The timing of LG Display's receipt of the damages has not yet been determined.