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August 2015: Patent Trial Victory for Everlight Electronics

August 2015

On April 22, 2015, the firm achieved a complete victory for Everlight Electronics Co., Ltd. over Nichia Corporation in the Eastern District of Michigan following a two-week jury trial. The jury found that Nichia’s U.S. Patent Nos. 5,998,925 and 7,531,960 were invalid as obvious and separately found that certain claims of the ’960 patent were also invalid for lack of enablement.

Nichia is the world’s largest manufacturer of LEDs and has a large portfolio of patents. Nichia has aggressively asserted its patent portfolio against most of the major LED manufacturers. Everlight is a much smaller Taiwanese LED manufacturer which began increasing its sales of white LEDs. In the face of this increased competition from Everlight, Nichia began threatening Everlight’s customers with patent infringement.

To protect its customers from Nichia’s threats, Everlight commenced an action seeking a declaratory judgment that two Nichia patents, U.S. Patent Nos. 5,998,925 and 7,531,960, were invalid, not infringed and/or unenforceable. Nichia quickly counterclaimed with assertions of infringement of these two patents. Both patents relate to white LEDs made by mixing a blue LED with a yellow phosphor to make white light. Nichia’s “white light” LED patents are considered among Nichia’s most valuable patents and allegedly have been widely adopted by the LED industry. Nichia’s infringement allegations included hundreds of Everlight’s LED products sold for a variety of applications.

After the Court bifurcated issues of damages and willfulness as well as equitable issues, a two-week jury trial limited to invalidity and infringement commenced on April 7, 2015. As declaratory judgment plaintiff, Everlight presented its invalidity case first. Everlight’s expert successfully explained to the jury how the claimed inventions of the two Nichia patents were nothing more than the next logical step in LED technology after the development of an efficient blue LED.

Following presentation of Everlight’s invalidity case, Nichia presented its infringement case and its rebuttal to Everlight’s invalidity case. Based on the strength of its cross-examination of Nichia’s expert, Everlight made the strategic decision to forego its non-infringement rebuttal case and move right to closing arguments. By doing so, Everlight was able once again to focus the jury on its core invalidity arguments. The jury’s verdict fully vindicated this strategy and Everlight is now free to sell its white LED products without further interference from Nichia.