Should LG fail though they’d be ”liable for damages” to Sony - it’s ”a risky strategy.” Both firms failed to renew licensing 3 years ago. Unclear how this benefits.
”Having already sold three million PS3’s in the UK alone, this is certainly already delaying distribution of more PS3s around Europe, although if these are mostly pre-orders, Sony won’t feel the financial hit immediately,” said Ilya Kazi.
”Consumer electronics manufacturers generally settle disputes commercially by way of cross-licenses. However LG’s action here serves as a poignant reminder that, if a licensing deal is not reached, ultimate success in a patent infringement action might prevent Sony from selling PS3s anywhere in Europe from now on which would be disastrous.”
LG has managed to block the import of PlayStation 3’s into Europe via The Netherlands, although Sony could attempt to circumvent the win by changing what country they import through as each are individually responsible for enforcing patent laws.
”Added to this, a win would, in all likelihood, mean Sony having to compensate LG for every unit sold, given that a recall of the product would be unworkable and even more expensive. Of course, if LG press to hold the seized PS3s and are unsuccessful they will be liable for damages and that won’t be cheap. So it is a risky strategy,” continued Kazi.
”Three years ago, both companies failed to renew a technology sharing agreement that had been in place for some time. I am sure there were reasons on both sides. This latest spat, and the earlier skirmish, show that IP issues are increasingly entering the fray as a tactic in a bigger commercial battle between competitors. However an all-out IP war is unlikely to be in either side’s interest and a commercial deal is likely to be renegotiated.”
LG may have gotten Sony’s full attention with this move but it’s also backfiring with electronic consumers as people are getting upset over potential PS3 stock shortages.
“LG may be getting a lot of publicity through this although Sony is achieving, by default, the same amount of column inches and it is not clear how this is helping either. It will be interesting to see whether this impacts on their bottom line in terms of customer loyalty and perceptions,” they added.
Sony won’t get too much sympathy though what with their ‘Jailbreak’ crusade, which now involves Sony trawling IPs for anyone who has watched YouTube clips of people hacking their PS3 console after the court ruled in their favour.
“It’s highly unlikely that there will be recall of already purchased consoles whatever the outcome, so those already owning a PS3 can go on playing uninterrupted. ‘IP wars’ is unlikely to be the next greatest hit for PS3 players.”
”As a patent attorney, whilst it is refreshing to see the importance attached to IP, ultimately I’d like to think commercial pragmatism will win the day,” concluded Kazi.
