By Kim Yoo-chul
Staff Reporter
Quanta, a Taiwanese computer maker, is to pay some $17 million in royalties for the use of LG Electronics' patents on microprocessor chips and chipsets, industry sources said, Tuesday.
"Quanta will pay $17 million in licensing fees for the use of distinctive LG patents," a high-level industry source told The Korea Times.
"But the amount will be subject to further royalty talks between the two sides," the source added.
LG said it has agreed to settle eight years of legal disputes with Quanta over the Korean company’s PC-related technology.
Upon the agreement, both players also agreed to drop all related pending lawsuits against each other, according to an LG spokesman.
"LG and Quanta finally reached a resolution to the lawsuits with the Taiwanese maker giving the green light to pay licensing fees for the use of LG's data processing technology of Peripheral Component Interconnection (PCI)," the spokesman said.
The bilateral agreement comes after a U.S. Supreme Court ruled in favor of Quanta, rejecting LG's argument that it had placed explicit limits on how its patent technology could be passed on.
The decision by the U.S. court in California had big implications for both sides, which license patents, since the court unanimously overturned a federal appeals court ruling with the practical effect of voiding an agreement between LG and Quanta.
Initially, the U.S. court decided Quanta didn't infringe the LG patents.
In 2000, LG accused Quanta of violating its distinctive PCI patents when using components to manufacture a PC. Quanta claimed LG had licensed the PCI technology to Intel, which in turn manufactured microprocessor chips that it sold to Quanta.
Quanta used the chips to make PCs on a contract-basis for Dell, Hewlett-Packard and Gateway.
In April 2007, LG settled with Intel, allowing it to make PC chips and chipsets using LG technology.