Sharp Settles Employee Invention Suit Over LCD Technology, (Osaka, Japan)

A suit that demanded the Japanese consumer electronics maker pay $4.6 million to a former employer for a flat screen TV technology was settled in the Osaka District Court on April 1, 2007. Neither was willing to comment on the amount, but both expressed satisfaction with the agreement.

The suit was filed back in June of 2004 by a retired chief researcher of Sharp’s liquid crystal display (LCD) department stating that Sharp Corp. did not pay a reasonable compensation for a key component in flat screen TV technology which improved both the speed and energy consumption of the LCD monitor. Due to Sharp’s 2002 revision of their in-house employee compensation policy which for the first time included retirees among those who qualified for remuneration adjustments, the man received an extra $7700 for his part in developing the technology after his retirement in 2001. The man was not satisfied with the amount and filed suit.

He claimed that the company’s total earnings on this invention from domestic and foreign licensing are expected to be 96 billion yen and stated that although his contribution to the invention was 12% and was worth 11.5 billion yen, he was asking for a much smaller compensation amount.

This is the latest in a series of employee invention-related suits in Japan following the high profile suit against Nichia Corp over the LED invention, among others. Weary companies are scrambling to revise their in-house employee compensation policies to avoid future lawsuits such as this one.

(Posted on April 16, 2007)

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