A Strategy for Inroad into US Market
Haier, a Chinese consumer electronics company, sued Samsung Electronics and LG Electronics for violating antitrust law in the US market.
According to foreign news services on August 24, Haier recently filed a lawsuit against Panasonic, Philips, Zenith, Samsung and LG, in the New York court for allegedly fixing TV-related patent fees.
Haier's US subsidiary, Haier America Trading, raised the issue over a license related to the ATSC (Advanced Television System Committee) standard which is a digital transmission control system for terrestrial, cable and satellite networks. Samsung Electronics and LG Electronics have formed a patent pool with the remaining three companies under the patent management company MPEGLA.
The ATSC has a faster transmission rate and better compatibility compared to the DVB in Europe and the ISDB in Japan so was adopted as a digital TV broadcasting standard in North America and Korea among others.
Haier claimed that these five companies hindered fair competition related to the ATSC patent by colluding with MPEGLA, the largest patent management company in the world, and the Colombia University Trust Committee'
In particular, Haier emphasized in the lawsuit paper, "Haier contacted patent holders such as Samsung and LG to utilize a patent for TV tuners, but all of them refused to negotiate individually and repeatedly answered that we should ask MPEGLA."
Haier acknowledged a need for an industry practice to set up standard technical specifications. But the company pointed out, “The standard-setting procedure should be based on accordance with the so-called FRAND principle that the procedure should be provided to anyone in a fair, reasonable and non-discriminatory manner and criticized, MPEGLA, saying, “MPEGLA does not abide by this rule.”
In other words, Haier claims that MPEGLA imposes a burden on consumers by demanding unfair royalties through collusion with Samsung, LG, Philips, etc., thereby hampering fair competition.
In the industry, analysts say that Haier's lawsuit has something to do with Chinese consumer electronics companies’ invasion of the North American market.
"Haier took over the home appliance unit from General Electric (GE) last year and drew up a plan to expand its presence in its global market, going beyond the Chinese market," an industry official said. "There is a possibility that patent disputes with Chinese companies will become frequent."
Meanwhile, it was reported that MPEGLA sued Haier in March for failing to pay patent royalties and honor a contract. So, it is pointed out by some experts that the lawsuit is a countermeasure.
"In the case of early MPEGLA member companies, their situations could be applied to the calculation of patent royalties but since then, it has been not much different from general patent pools," an industry official said. “I think that Haier wanted to lower the proportion of patent royalties as Haier was performing poorly."