White LED royalty

[beerbaron]

Hi, I know that white LEDs have some patents on them. But my problem is that I buy my LEDs in China and that I have to believe the LED manufacturer that he paid it's dues to the right company.

Is there a way to verify that a manufacturer has an agreement with one company?

How can I tell I'm not being ripped off?

Thanks
BeerBaron

 

[IRstuff]

Royalty agreements are usually private contracts.



TTFN

 

[MacGyverS2000]

If the order size is large enough, I don't believe you would have a problem with the company allowing you to verify the authenticity of its manufacturing capabilities. You're not asking for contract specifics (cost to them), only a nod from the patent parent.


Dan - Owner

http://www.Hi-TecDesigns.com

 

[utimgr]

end users cant be sued for patent infringment from a mfg...mfg are the ones that would have to pay the patent holder for loss of revenue.

 

[beerbaron]

That's the problem, we are a manufacturer of lighting equipment, so it's my responsability to make sure that there is no patent infringment.

Regards
Beerbaron

 

[IRstuff]

Lemuelson Foundation sued end users for using infringing bar codes and bar code readers. Obviously, the fact that the defendants had DEEP pockets made it particularly worthwhile.

TTFN

 

[utimgr]

Well...you have to relize that they made a business from sueing others with deep pockets and until they finally had someone that didnt back down, did a pretty nice income from it.

I do see your point on being the mfg of lighting products..but the way it usually works, the patent holder first has to find out that you are using a device that is not paying him royalties on the patent. So the start by sending letters demanding you stop infringing on his patent, that can go for a year or so. If they are not in the business, then not sure they can recover anything because, the way the law is, you cant sue for a billion dollars, you can only sue for loss of revenue from when you started to ship the product. Now, the LED mfg is a better target since they are shipping more product specific to the patent, and can generate a larger settlement than little you (ok..so what if your using 10K/month...they are shipping 1000K/month..do the math)

Bottom line...patents are hard to enforce, takes years to even get to the docket, hard to prosecute, and so if they send you a letter (doubt it would ever happen) you comply and start using someone elses white LEDs. If your using a CM, just tell THEM they must use a approved vendor.

I see patents as a way of not getting sued. If you own it, then nobody can come after you. But if you get violated, be ready to make sure its worth going after.

 

[2dye4]

It has to be the case that a user of a product is isolated from patent infringement on the part of the manufacturer of the product. If not can you imagine the chain of checks that would have be done to assemble a pc. How could you veryify Intel had no infingements on its CPU, or battery makers or pcb suppliers. If the reasoning held why wouldn't you have to verify the suplliers supplier and so on. If just would not be possible.

 

[IRstuff]

One mechanism is an indemnity clause in the contract

TTFN

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[ozmosis]

beerBaron
Is it a wholly-Chinese company, joint venture or non-Chinese company operating in China? In theory it should not make any difference but in practice it will if you are trying to verify if you are "..being ripped off"

 

[VEBill]

Even if you think you have covered all the bases with respect to patents, you can STILL be sued and asked to pay $1.5B.

Recent news about MS and MP3s:

http://www.theinquirer.net/default.aspx?article=37808

 

[utimgr]

again...a story of two companies with deep pockets and an army of company lawyers. If every company was worried about patent infringments, then there wouldnt ever be new products developed.