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Electronics War: Sony’s Legal Face-off with LG
- By Ikem Okuhu
- Published January 3rd, 2011
- BrandWorld
- Unrated
Sony Corp has filed a patent infringement complaint seeking to block LG Electronics Inc from shipping smartphones such as its Rumor 2 model to the United States.
In a recent filing last Wednesday with the U.S. International Trade Commission, Sony said LG violated U.S. trade rules by importing mobile phones and modems that infringed Sony patents. Sony said LG also infringed patents of some of its licensees, including its Sony Ericsson joint venture, Samsung and Nokia.
The company filed a related complaint with the federal court in Los Angeles, court records show. A copy of that complaint was not immediately available. LG spokesman John Taylor said in an email that it is company policy not to discuss pending litigation. Sony said the patent infringement relates to more than 10 phones including the Encore, LG Accolade, Neon, Quantum, Rumor Touch and others.
The patents in the suit involve audio and microphone devices in phones, caller ID technology and transmission power. LG, South Korea’s fourth-largest conglomerate, this month said it is trying to expand its major businesses, including smartphones, and on Tuesday said it wants to raise 2011 sales by 11 percent to 156 trillion won ($135 billion). Since October, LG has sold 2 million units of the Optimus One smartphone, its most popular smartphone model to date.
Sony reported an operating profit of 68.7 billion yen ($847 million) in the three months ended September 30, reversing a loss the previous year.
Sony Corporation or commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Tokyo, Japan and the world’s fifth largest media conglomerate with revenue exceeding US$77.20 billion. Sony is one of the leading manufacturers of electronics, products for the consumer and professional markets.
Sony Corporation is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its eight operating segments – Consumer Products & Devices (CPD), Networked Products & Services (NPS), B2B & Disc Manufacturing (B2B & Disc), Pictures, Music, Financial Services, Sony Ericsson and All Other. These make Sony one of the most comprehensive entertainment companies in the world. Sony’s principal business operations include Sony Corporation (Sony Electronics in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Ericsson, and Sony Financial. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders.
Its founders Akio Morita and Masaru Ibuka derived the name from sonus, the Latin word for sound, and also from the English slang word “sonny”, since they considered themselves to be “sonny boys”, a loan word into Japanese which in the early 1950s connoted smart and presentable young men.
When Tokyo Tsushin Kogyo was looking for a romanized name to use to market themselves, they strongly considered using their initials, TTK. The primary reason they did not is that the railway company Tokyo Kyuko was known as TKK. The company occasionally used the acronym “Totsuko” in Japan, but during his visit to the United States, Morita discovered that Americans had trouble pronouncing that name. Another early name that was tried out for a while was “Tokyo Teletech” until Morita discovered that there was an American company already using Teletech as a brand name.
The name “Sony” was chosen for the brand as a mix of two words. One was the Latin word Sonus which is the root of “sonic” and “sound” and the other was “sonny,” a familiar term used in 1950s America to call a boy. The first Sony-branded product, the TR-55 transistor radio, appeared in 1955 but the company name did not change to Sony until January 1958.
At the time of the change, it was extremely unusual for a Japanese company to use Roman letters to spell its name. The move was not without opposition: TTK’s principal bank at the time, Mitsui, had strong feelings about the name. They pushed for a name such as Sony Electronic Industries, or Sony Teletech. Akio Morita was firm, however, as he did not want the company name tied to any particular industry. Eventually, both Ibuka and Mitsui Bank’s chairman gave their approval.
Sony has historically been notable for creating its own in-house standards for new recording and storage technologies, instead of adopting those of other manufacturers and standards bodies. The most infamous of these was the videotape format war of the early 1980s, when Sony marketed the Betamax system for video cassette recorders against the VHS format developed by JVC. In the end, VHS gained critical mass in the marketplace and became the worldwide standard for consumer VCRs and Sony adopted the format. While Betamax is for all practical purposes an obsolete format, a professional-oriented component video format called Betacam that was derived from Betamax is still used today, especially in the film and television industry.
1982 saw the launch of Sony’s professional Betacam videotape format and the collaborative Compact Disc format. In 1983 Sony introduced 90 mm micro diskettes (better known as 3.5-inch (89 mm) floppy disks), which it had developed at a time when there were 4" floppy disks and a lot of variations from different companies to replace the then on-going 5.25" floppy disks. Sony had great success and the format became dominant; 3.5" floppy disks gradually became obsolete as they were replaced by current media formats.
In addition to developing consumer-based recording media, after the launch of the CD Sony began development of commercially based recording media. In 1986 they launched Write-Once optical discs (WO) and in 1988 launched Magneto-optical discs which were around 125MB size for the specific use of archival data storage.
Controversial promotions
In July 2006, Sony released a Dutch advertising campaign featuring a white model dressed entirely in white and a black model garbed in black. The first ad featured the white model clutching the face of the black model. The words “White is coming” headlined one of the ads. The ad has been viewed as racist by critics. A Sony spokesperson responded that the ad does not have a racist message, saying that it was only trying to depict the contrast between the black PSP model and the new ceramic white PSP. Other pictures of the ad campaign include the black model overpowering the white model.
LG Electronics
LG Electronics is the world’s second-largest manufacturer of Television sets and third-largest producer of mobile phones. It is the flagship company of LG Group, one of the world’s largest electronic conglomerates.
The company has 75 subsidiaries worldwide that design and manufacture televisions, home appliances, and telecommunications devices. LG Electronics owns Zenith Electronics and controls 37.91 percent of LG Display
By 2005, LG was a Top 100 global brand, and in 2006, LG recorded a brand growth of 14%. Its affiliate, LG Display, is now the world’s largest plasma panel manufacturer. The company was originally established in 1958 as GoldStar, producing radios, TVs, refrigerators, washing machines, and air conditioners. The LG Group was a merger of two Korean companies, Lucky and GoldStar, from which the abbreviation of LG was derived. The current “Life’s Good” slogan is a backronym.
Before the corporate name change to LG, household products were sold under the brand name of Lucky, while electronic products were sold under the brand name of GoldStar. In January 2009 LG was able to buy the domain name, LG.com, placing it among the companies who own their two letter brand’s domain name.
In 1994 GoldStar gained sponsorship from The 3DO Company to make the first 3D Interactive Multiplayer. In 1995, GoldStar was renamed LG Electronics, and acquired Zenith Electronics of the United States. LG Solar Energy is a subsidiary formed in 2007 to allow LG Chem to supply polysilicon to LG Electronics for production of solar cells. In 2008, LG took its first dive into the solar-panel manufacturing pool, as it announced a preliminary deal to form a joint venture with Conergy. Under the deal, set to be completed by year’s end, LG would acquire a 75 percent stake in Conergy’s Frankfurt solar-panel plant. LG has produced camcorders called ARTCAM and DSLRs.
LG Electronics is the world’s third largest handset maker. LG said it expects a significant increase in mobile phone sales this year 2010, while 20 new smartphones present and aims to become one of the leading manufacturers in the sector by 2012.
The Korean company hopes to sell 140 million phones in 2010, said Skott Ahn, CEO of mobile phone unit. That would mean an increase compared to the past year, where an estimated 117 million sold units.
Ahn said LG Electronics reported a global market share in double digits in 2009 for the first time, despite a 5% contraction in the global market.
“In 2010 we will build the foundation to become the global number two in 2012,” said Ahn.
Currently, LG is the third in the area of mobile phones behind leader Nokia, and Samsung.
LG mobile devices are made for GSM networks as well as for CDMA networks worldwide. LG phones are available also in unlocked versions that can be used on any GSM network worldwide and not just for a specific carrier’s network.
