Mangum’s Competition Analysis Prevails in Patent Case News Feed

February 16, 2016—Economic analysis by Russell W. Mangum III, senior vice president at Nathan Associates, prevailed in a patent decision involving LED semiconductor lighting products.

After ruling last month that Everlight Electronics Co. had infringed three patents held by plaintiff Nichia Corp., U.S. District Judge Rodney Gilstrap in Marshall, Texas, declined to issue an injunction. Defendant Everlight continues to sell its lighting products.

In arguing for an injunction, Nichia said that continued sales would result in irreparable injury to its business. Judge Gilstrap rejected that claim, agreeing with Dr. Mangum’s assessment of the competitive relationship between the parties. In particular, Dr. Mangum was persuasive in refuting the claim from Nichia’s economic expert that the infringement caused any lost sales or price erosion.

“An interesting element of this case is where the legal boundary lies between getting and not getting an injunction on future sales,” Dr. Mangum said after the Jan. 25 ruling.  “Of critical importance is the economic meaning of ‘competition.’  It takes thorough, detailed economic analysis to understand the degree of competition and how that relates to the issue of irreparable harm.”

Dr. Mangum testified, and Judge Gilstrap agreed, that Nichia’s licensure of its technology to over 40 percent of the worldwide LED market, including firms that were major competitive threats to Nichia, indicated that Everlight’s competitive presence did not lead to irreparable harm.

“My conclusions regarding competition were very different from the opposing expert,” Dr. Mangum said. “I concluded that Everlight did not pose a competitive threat to Nichia and Nichia’s licensing activity is not consistent with irreparable harm from Everlight. And the judge agreed.”

Nichia, based in Japan, had filed the initial complaint against Everlight, based in Taiwan, in September 2013. The case is Nichia Corporation, plaintiff, v. Everlight Electronics Co., Ltd., Everlight Americas, Inc., Zenaro Lighting, Inc. And Zitroz LLC, in the United States District Court for the Eastern District of Texas, Marshall Division, Case No. 02:13-cv-702.

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