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Asia300

Foxconn's LCD subsidiary files patent suits against mainland Chinese rival

Innolux demands that HKC stop using technology gained through talent poaching

  © Reuters

TAIPEI -- Major Taiwanese liquid crystal display panel maker Innolux is suing two affiliates of its mainland Chinese rival HKC for infringing on 17 of its intellectual property rights.

The move by the subsidiary of Hon Hai Precision Industry, better known as Foxconn, is believed to have been led by its Chairman Terry Gou, who is trying to bolster the group's display panel business.

According to a statement issued by Innolux on Monday evening, its filings were accepted in two Chinese courts -- Guangzhou Intellectual Property Court and Ningbo Intermediate People's Court -- on Feb. 12.

The two HKC affiliates poached several dozen engineers employed at Innolux in 2015 and have since taken advantage of the technology knowledge these people brought in. The lawsuit demands that the companies stop the production and sale of related products and remove them from their inventory and production equipment.

With their stronger financial backing, Chinese panel makers are exerting pressure on their Taiwanese counterparts, whose previous technological advantages over the Chinese appear to be gradually being eroded. Foxconn, however, managed to reboot its panel business in 2016 with the acquisition of Japanese manufacturer Sharp.

In its statement, which was in Mandarin, Innolux harshly criticized technology theft, saying "this is not something companies from a 'strong country' should do." The term "strong country", or "qiangguo" in Mandarin, is a pet phrase of Chinese President Xi Jinping in speeches glorifying the country's position.

Wang Jyh-chao, chairman and president of Innolux, said in the statement that "Innolux will definitely not allow anyone in any way to infringe upon our intellectual property rights." He called upon the Chinese companies to "fully respect intellectual properties and to protect a business environment which upholds honesty and promise." Also, he expressed hope that the Chinese courts would proceed in "accordance to the law and in a fair manner, as to set the record straight."

Innolux shares traded in Taipei edged up by 0.4% to 13.0 New Taiwan dollars on Tuesday, beating the benchmark Taiex Index which fell by 0.2% to close at 10,815.47.

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