Laying Down the Sword

 

South Korean steel maker POSCO has decided to bring an end to proprietary technology lawsuits, which have been filed in 2012, with Nippon Steel & Sumitomo Metal Corp., former Nippon Steel Corporation, with settlement money of ¥30 billion (US$249.59 million or 294.89 billion won).

According to steel industry sources on Sept. 30, POSCO will pay ¥30 billion (US$249.59 million or 294.89 billion won) under the settlement, and Nippon Steel will drop the suit filed with the Tokyo District Court over “grain-oriented electrical steel sheet production technology.” Also, the Japanese steel maker will withdraw the same suit filed in the New Jersey District Court in the U.S., and a court order banning POSCO from producing and selling steel sheet using the technology.

Nippon Steel argued that POSCO illicitly obtained its technology for grain-oriented electrical steel sheets used in transformers at power plants through its retired employees, and sought ¥98.6 billion (US$820.3 million or 969.19 billion won) in damages, along with the lawsuits of trade secrets and infringement of patent.

In this regard, POSCO filed patent nullity suits in the U.S. Patent and Trademark Office and the Korean Intellectual Property Office, respectively, and Nippon Steel brought a counter-suit. The two companies were fighting a legal battle in the South Korean court as well.

Details of the settlement were not revealed, except for the settlement money, due to a secrecy agreement between the two companies. With nearly 300 billion won (US$253.91 million) of the settlement money, POSCO is highly likely to record a net loss during the third quarter of this year.

An official from the steel industry said, “It seems that POSCO thinks it is better to pay the settlement money at reasonable levels than wasting time and money in prolonging legal battles.” 

With the settlement, POSCO is planning to strengthen its strategic partnership with Nippon Steel further, which has been maintaining since 2000.

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution