LG seeks ban on BMW, Audi sales in Korea over Osram

LG Electronics filed a suit in South Korea, seeking a ban on the sale of BMW and Audi cars, expanding its legal battle over lighting-product patents with Siemens unit Osram to automakers. The sales injunction request filed on Wednesday by LG and its component affiliate LG Innotek said the automakers are using Osram's lighting products that infringe its patents. If the court allows LG's request, that could be a setback to BMW, the world's largest luxury carmaker, and Audi, a unit of Volkswagen . Korean sales account for just around 1 percent of these carmakers' global sales, but European models are steadily gaining market share in Korea following a free-trade deal with the European Union in July.

Taking on the big cars

The lawsuit is the latest in a series of patent litigation involving LG Electronics, Samsung LED and Osram. The Siemens lightbulb unit has filed suits against the South Korean firms in the United States, Germany and Japan. LG's sales injunction request follows a separate complaint filed with the South Korean trade commission in July to ban imports of LED products from Osram. "We've decided to expand the legal case to automakers using LED package products made by Osram, as the infringement is increasingly affecting the fast-growing LED industry," LG said in a statement on Wednesday. Shares in LG closed up 2.5 percent, compared with a 0.7 percent fall in the broader market. BMW shares were up 1.5 percent at 1043 GMT in Frankfurt, while Audi rose 0.9 percent.

BMW, the most popular imported brand in Korea, raised its market share sharply in the country as Japanese rivals lost ground following the earthquake there in March. BMW sold 16,579 cars in the first eight months of this year, up 62 percent from a year ago, and owns 24 percent of the imported-car market in Korea, according to data by Korea Automobile Importers and Distributors Association. Audi also increased sales by a quarter to 6,668 cars in the first eight months of this year to take 9.6 percent of the imported-car market. BMW in South Korea declined to comment on the lawsuit, while a spokesman at the group's German headquarters said BMW would have to examine in detail any possible injunction before providing a statement. A spokesman for Audi said the company had not received anything from the court in South Korea so far and would have to examine any potential injunction should it arrive. An Osram spokesman declined to comment. Imported cars account for less than 10 percent of South Korea's auto market dominated by local brands such as Hyundai Motor, but sales growth is far outstripping that of domestic companies. Sales of imported cars jumped 19 percent in the first eight months of this year, while Hyundai saw its domestic sales rise only 8.6 percent.

LG joined Samsung LED to countersue Osram, after the German firm said in June that it filed lawsuits against the two business groups. Samsung LED countersued in June, filing a patent infringement lawsuit against Osram Korea and two Korean sales agents of the German company at a Seoul district court. Osram is the world's No.2 lighting company after Philips, ahead of General Electric Co. LEDs are semiconductor devices that emit light and boast high energy efficiency, while organic light emitting diodes (OLED) are based on organic compounds and used in a range of products including lighting, automobiles, projectors, mobile phones and TVs. Osram has claimed Samsung and LG infringed its patents on white and surface-mountable LEDs. It said it would seek compensation, adding various prominent companies worldwide have taken royalty-bearing licences on its conversion technology. LG said on Wednesday, products in BMW and Audi infringed seven of its patents relating to LED chips and packaging technologies. The Seoul Central District Court has yet to decide the first hearing date on the LG versus Osram case.