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Nichia settled with former employee over "Reasonable Remuneration"

Nichia Corporation announced today that it has reached settlement with Professor Shuji Nakamura, in accordance with the Tokyo High Court's recommendation for settlement, which is reflected in the attached document. The lawsuit was about the "reasonable remuneration" Professor Nakamura is entitled to receive under Article 35 of Japan's Patent Law. The settlement agreement covers all the inventions that Professor Nakamura invented while he was employed by Nichia, which includes 191 registered patents, 4 registered utility models and 112 pending patent applications and their respective foreign counterparts, as well as all unpublished know-how. Nichia will pay to Professor Nakamura JPY608,570,000 (six-hundred and eight million and five-hundred and seventy thousand Japanese yen) as "reasonable remuneration" and JPY235,340,000 as interest damages (5% per year). This is the entire total settlement, and both parties agreed that no residual amount remains payable or due from each other.

Nichia's statements regarding this settlement are as follows:
1.    According to the calculation method of the court recommendation, the amount of remuneration for the patent-in-suit (Japanese Patent number 26228404) alone can be calculated to be approximately 10 million yen, which is 1/6,000 of the finding by the Tokyo District Court. This indicates that Nichia's legal argument prevailed.
2.    Nichia believes that the amount of JPY608,570,000 overvalues the remuneration due Professor Nakamura under the Patent Law for all of his inventions. However, the settlement eliminates all potential disputes with Professor Nakamura, which would disrupt management and regular business. The settlement also saves the costs of litigation.
3.    The court proposal properly recognized that the employers, not employees, assume large risks. Also the court proposal clearly recognized that an employee is different from a business partner that shares business risks.
4.    Nichia appreciates the calculation method that is presented in the court proposal.

a.    The High Court determined the contribution ratio for various technologies (195 patents and utility models registered by the Japan Patent Office alone), not only for "the 404 patent".
b.    The High Court recognized that technologies of the Blue LED have been rapidly developing and advancing.
c.    Cross licenses that Nichia entered into in 2002, which had been disregarded by the Tokyo District Court, were recognized and reflected in the High Court's calculation.
d.    Nichia' contribution ratio was recognized to be as high as 95%.

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Public Relations, Nichia Corporation