LG Chem and Innox Advanced Materials have settled a patent dispute over OLED material

LG Chem and Innox Advanced Materials have settled a patent dispute over LG Display’s organic light-emitting diode (OLED) encapsulant market. 

According to industry sources on the 30th, LG Chem withdrew the patent infringement lawsuit against Innox Advanced Materials on the 25th. It has been 1 year and 8 months after filing a lawsuit in March last year.

LG Chem filed a patent infringement lawsuit at the Seoul Central District Court, claiming that Innox Advanced Materials infringed on its organic light-emitting diode (OLED) encapsulant patent. LG Chem and Innox Advanced Materials occupy half of LG Display’s OLED encapsulant market. Encapsulation refers to the process of protecting the OLED emitting layer from moisture and oxygen.

In the industry, it is believed that LG Chem has filed a lawsuit after Innox Advanced Materials, a latecomer, supplied OLED encapsulants to LG Display from mid-2018 and then increased its market share in LG Display supplies to half. Prior to the entry of Innox Advanced Materials, it was a market that was exclusively supplied by LG Chem. Moreover, when Innox Advanced Materials supplied the encapsulant at a lower price than LG Chem, LG Display requested a price cut from LG Chem.

Innox Advanced Materials, who was sued, filed a trial for invalidation of four LG Chem patents in August last year. 

However, as the two sides settled the patent infringement lawsuit last week, all related disputes are expected to be dropped. On the 23rd, two days before LG Chem withdrew the patent infringement lawsuit, Innox Advanced Materials withdrew from two trials that have not yet come to a conclusion.

LG Chem and Innox Advanced Materials are expected to increase OLED encapsulant supply in the future. As LG Display’s OLED plant in Guangzhou, China began mass production in July, demand for encapsulants increased. Quarterly OLED TV shipments are expected to start at 1.5 million units in the fourth quarter, and more than 1 million units each quarter next year.

Meanwhile, Shinhwa Intertek, an optical film maker, is also aiming to enter the OLED encapsulant market. Shinwha Intertek mainly produced optical films for liquid crystal display (LCD) TVs, but is pushing forward with supplying OLED encapsulants as a new business. LG Display and OLED encapsulant supply are also being discussed. If Shinhwa Intertek supplies OLED encapsulants to LG Display, this market is expected to develop between 3 competitors: LG Chem, Innox Advanced Materials, and Shinhwa Intertek.