Minebea Co. Ltd. (Japan) and Nidec Corporation (Japan) have agreed to settle a series of lawsuits
involving patent disputes over fluid dynamic bearing technology.
In the agreement, Minebea is withdrawing its two remaining actions against Nidec. One was filed in
Tokyo District Court to stop Nidec pursuing action, and the other was filed in the United States
to invalidate the Nidec patent in dispute.
The settlement outline is:
Minebea and Nidec will negotiate mutual cross-license agreements on patents and other intellectual
property covering both fluid dynamic bearings for computer hard drive spindle motors, and hard drive spindle motors.
The agreement involves the parent companies and their subsidiaries and will be complete by the end of 2004.
Minebea will withdraw its two remaining lawsuits against
Nidec, and Nidec will formally agree to these withdrawals.
Minebea and Nidec mutually agree to terminate all intellectual property rights disputes
between the two companies.
The stakes in this battle were extremely high. From a quiet start only three years ago, hydrodynamic bearings
have now replaced miniature precision ball bearings
in computer disk drives in virtually every high-volume application.
Minebea and Nidec are the two dominant forces in miniature hydrodynamic bearings.
In March 2004, Nidec sent a letter to Minebea, accusing it of infringing a key Nidec hydrodynamic bearing
spindle motor patent, and demanding Minebea stop production of products that infringe the patent.
Minebea responded to Nidec that it would reply by April 5.
At the end of March, Nidec verbally informed Minebea it would file suit to stop Minebea production
of hydrodynamic bearing spindle motors unless Minebea agreed to begin pursuing a fee-based license
for the patented hydrodynamic bearing technology.
Minebea believed its motors did not violate Nidec's hydrodynamic bearing patent, but became concerned
a lawsuit by Nidec would scare away customers.
On March 29, Minebea turned the tables and filed a preemptory lawsuit against Nidec, seeking
declaration of "non-existence of cause of injunction" to stop any threatened action by Nidec.
On March 30, however, Nidec issued a press release, publicly alleging Minebea manufactures
hydrodynamic bearing motors in violation of Nidec patents. In addition, Nidec revealed it had filed
a chilling lawsuit against Maxtor, a huge manufacturer of computer disk drives and a key customer of Minebea
for hydrodynamic disk drive motors. The suit aimed to stop Maxtor from importing disk drives
continuing Minebea hydrodynamic bearing motors.
Three days later, Nidec issued another press release, indicating it had abandoned its action
against Maxtor but that the issue of patent infringement by Minebea was still very much alive.
Two days after that, on April 5, Minebea filed a second lawsuit against Nidec, charging Nidec was engaging
in unfair competition and intimidating Minebea customers. The suit also sought to stop Nidec from
contacting Minebea customers, again alleging unfair and intimidating anticompetitive business practices.
On May 18, Minebea withdrew its first lawsuit from March 29 after judging that the two lawsuits overlapped
each other on the key issues. This move, it hoped, would help the second suit move forward more quickly.
In mid-July, Minebea filed another lawsuit against Nidec, this time in the United States. In it, Minebea
and its U.S. affiliate, NMB Technologies, also named Nidec partner Sankyo Seiki Manufacturing Co.; Sankyo
originally developed and patented the technology under dispute, then licensed it to Nidec.
The U.S. suit by Minebea charged Sankyo Seiki and Nidec had no cause for action because key elements
of their patent were not original and were repeatedly represented by prior art (lack of "prior art" is
the basis for awarding a patent). The patent, Minebea charged, is therefore invalid and this lawsuit
seeks to invalidate the patent and stop all action by Nidec and Sankyo Seiki related to its enforcement.
Now, Nidec and Minebea have agreed to settle the matter, drop all lawsuits and agree to work
together under the framework outlined above.
"Good for them," a patent attorney told eBearing. "While dropping the suits obviously doesn't resolve the
underlying patent validity question, the companies have obviously come to their senses. Making disk drives
is already a moneylosing proposition; component vendors don't need to be spending their time and money
on anything but better product. Whoever brokered this agreement deserves credit; when cooler heads
prevail, it stops what often becomes a downward spiral of litigation which can cripple every company
involved. Management is distracted and finances are strained. But but even more importantly, innovation
stalls because of the questions over intellectual property rights. In a hypercompetitive industry such
as this, resources spread too thin and lack of innovation leave the door wide open for competitors."
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- by Bruce A. Carr
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