Most of the PS3 consoles for the European marketplace come through the Netherlands. That’s why the recent lifting of a Dutch court order
that had banned imports of the Sony PlayStation 3 is so important. The reported 300,000 PlayStations seized by Dutch custom officials
can now flow. Otherwise, Sony might have had to establish other distribution routes across Europe.
The cause of the original ban was due to a patent infringement accusation by LG Electronics of South Korea. They claimed that Sony, a Japanese company, used Blu-ray
drives in the PlayStation that infringe on LG patents. The handling of multiple data streams, such as audio and video, and reading data from Blu-ray media caused LG to make similar complaints against Sony in the US, also.
Although the Dutch ban has lifted, the lawsuit is not dismissed. It is directed at Blue-ray DVD technology in general, and is apparently using the PS3 in particular as a test case. LG took advantage of an EU law
on customs action against goods suspected of infringing on intellectual property rights. Normal rules in such cases place a temporary, usually up to ten day, hold on the product. Thus, the restriction has been quickly lifted until the case is settled. The confiscation was more like a firing across the bow, a warning to Sony from LG. This unusual tactic by LG, involving customs in an IP dispute, has the earmarks of a publicity stunt that may have backfired.
For now, the shoe’s on the other foot. LG may have to pony up and pay for damages Sony suffered due to the disruption of its business. LG may have to pay legal fees of approximately $182,000 USD, a pittance compared to what it might gain. If it is eventually proven that Sony did infringe on LG patents, then Sony will have to turn around and pay LG. LG is asking for royalties on every PlayStation 3 console sold in the past, as well as claiming royalties on future sales.
The South Korean company is seeking a patent royalty of around $2.50 to $2.55
for every Blu-ray device sold by Sony, which goes beyond just PS3s. LG estimates that they are already due around between $150 - $180 million for more than 47 million PS3s out there already in customers' hands.
What apparently started the fuss is when Sony alleged that some of the mobiles and modems sold in the US by LG violate its patent laws in Japan
. Well, they say, "Turnabout is fair play". It will be interesting to see how this Asian game of tit-for-tat turns out.
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