LG pulls out of US NextGen TV market after losing patent case

TV manufacturer LG has taken the decision to suspend manufacturing and sales of its new range of TV models for the US after losing a court case over a patent relevant to ATSC 3.,0, the US Next Gen TV standard.

The court case was brought by Constellation Designs, a US tech outfit that alleged LG infringed on its patents. The company does not participate the patent pools operated through Avanci and Via Licensing that cover patents essential for ATSC 3.0 and make them available on ‘reasonable and non-discriminatory terms’.

In a submission to the US FCC notice of proposed rulemaking, LG said “ [Constellation Designs] has not made a commitment to license its patents under RAND conditions and has not contributed its patents to any patent pool” but instead “filed litigation alleging infringement by LG of various CD patents”.

The jury in the case heard in Texas that found against LG awarded an effective royalty rate of US$6.77 for all LG TVs labeled with the NextGen TV logo, which LG said represented a 125% increase on the top rate of US$3 for all patents licensable through the Avanci patent pool, which covers about 80% of technologies necessary for ATSC 3.0.

LG criticized the use of patents to demand “excessive per-unit royalty rates resulting from litigation”, which it saisd resulted in “reduced investment and slower deployment of technologies”.

The company asked the FCC to “recognize that actions of certain patent holders present risks (including untenable costs) that impact the continued deployment of advanced technologies”.

In addition to royalty payments, the Texas court ordered LG to pay US41.68 million in damages to Constellation.

The outcome of the court case is that LG will not include ATSC 3.0 in its OLED TV sets going forwards, leading some commentators to wonder whether this will have a knock-on effect on the willingness of other OEMs to supply the NextGen TV market.