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Cree fights on against Rothschild LED patents

The Durham, NC, firm has failed to win a bargaining chip to reduce the potentially onerous royalties being demanded by a retired Columbia professor.

A New York judge has thwarted Cree s bid to restrict the scope of a patent infringement lawsuit brought by retired academic Gertrude Neumark Rothschild.

The judge rejected the LED maker's argument that US patent 5,252,499 only applies to substrate doping, but Cree has asked that the judgment be reconsidered.

In one of the first legal tests of Rothschild's patents, Counsel Albert Jacobs Jr. indicated that the professor emerita's team was in the process of opposing that appeal.

“Cree clearly doesn't want to pay any significant amount of money for a license so it was hoping to get a favorable judgment on one of the two patents in suit,” Jacobs told compoundsemiconductor.net on July 30.

“We think our position in the case has been good from the beginning and we think it is better since the court denied Cree's bid for a summary judgment.”

Rothschild originally also filed suit against Toyoda Gosei, Philips Lumileds and Osram in the US District Court for the Southern District of New York. Although these companies chose to accept the licensing settlement on offer, Cree now looks set to proceed to a jury trial.

Another case is due to be heard at the US International Trade Committee, where Rothschild complained against 31 companies that import products containing laser diodes and LEDs. 13 of these companies have already reached licensing deals "“ which ask for a percentage of the company s revenues "“ including Sony and three Samsung subsidiaries.

“One would not say that these are companies that don't know how to litigate patents,” observed Jacobs. “A number of very substantial companies have decided that buying business certainty is more important than trying to successfully knock the patents out.”

Now, Rothschild is considering extending her action to even more companies, and Jacobs says that some who haven't already been named are opening licensing negotiations.

The Columbia University professor is suing on the basis of the "˜499 patent and US patent 4,904,618, which mainly cover doping in wide-bandgap semiconductor devices. Although her patents describe II-VI devices, the claims extend to GaN-based technologies like blue LEDs and laser diodes.

When compoundsemiconductor.net asked Cree why it hadn't also reached a license agreement, it declined to make any comment on the case. In the year ended June 2007 the Durham, North Carolina company recorded $365 million in sales, of which 78 percent was derived directly from LEDs.

Jacobs says that this level of business gives Cree “significant exposure” to any royalties that might be due to Rothschild. This in turn is likely to be more than enough encouragement to defend the case, he points out.

“Cree has a reputation for litigating cases as opposed to settling them,” he said. “That reputation is well known, but my personal view is that one needs to always weigh the risks.”

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