UPDATE 1-LG Display says no action on AU case yet; shares dip

* LG Display down as much as 5 pct; AU up 1 pct

* Patent dispute likely to be settled -analysts

(Adds details)

By Miyoung Kim

SEOUL, May 3 (BestGrowthStock) – Shares of South Korea’s LG Display
tumbled nearly 5 percent on Monday after its Taiwanese rival AU
Optronics (2409.TW: ) said it would seek a sales injunction over
alleged patent infringement by LG in LCD manufacturing.

LG Display (034220.KS: ), the world’s No.2 maker of liquid
crystal display (LCD), said it would take action on AU’s moves
once a U.S. court made a final ruling on the two firms’ patent
dispute.

AU said on Sunday that it would seek an injunction preventing
LG from exporting to and selling in the United States products
found to have infringed AU’s patented technologies.
[ID:nTOE64100B]

“We’ll take take rigorous steps to protect our patents after
a final verdict is made,” a LG Display spokesman said.

LG Display, which reported a stronger than expected quarterly
profit last month, declined to give a detailed breakdown of its
sales in the United States.

By 0120 GMT, shares of LG Display tumbled 3.2 percent to
46,400 won after falling almost 5 percent earlier. The stock has
risen 35 percent over the past two months, driven by an upbeat
industry outlook.

Shares of AU rose 1.1 percent to T$37 after rising as high as
T$37.75.

“LG Display shares have rallied in recent months and a
correction is due. With AU, I think it’s just a common event that
will eventually lead to a settlement,” said Kim Sung-in, an
analyst at Kiwoom Securities.

The dispute, dating from 2006, centres on patents covering
technologies to improve the response time and reliability of LCD.

“It’s probably only a short-term bullish factor for AU,” said
IBTS Investment Consulting Dennis Wang, noting that any legal
process could take years.

Patent disputes are common in the technology sector,
especially in flat screens and semiconductors, as makers aim to
protect their latest technologies from being quickly commoditised
and exploited by rivals.

But most are settled out of court as big companies want to
avoid long fights and patent technology can be out of date by the
time a case is over.

In February Samsung Electronics Co Ltd (005930.KS: ), the
world’s top LCD maker, agreed with Japanese rival Sharp Corp
(6753.T: ) to drop all pending lawsuits over LCD panel and module
technology and to enter a cross-license agreement.
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Investment Research

(Additional reporting by Rhee So-eui in SEOUL and Rachel Lee
in TAIPEI; Editing by Jonathan Hopfner)

UPDATE 1-LG Display says no action on AU case yet; shares dip