The Supreme Court ended a three-year-old patent dispute among Korea’s three major shipbuilders Wednesday, siding with Hyundai Heavy Industries (HHI) and Samsung Heavy Industries.
The nation’s top court dismissed an appeal filed by Daewoo Shipbuilding and Marine Engineering (DSME), nullifying its patent over a technology that reliquefies evaporated liquefied natural gas (LNG).
In January, DSME took the case to the Supreme Court after the Patent Court of Korea issued a ruling which invalidated the struggling shipbuilder’s patent over boil-off gas (BOG) liquefaction technology.
The patent court said DSME’s knowhow is not different from those developed and used by the two other shipbuilders.
The BOG liquefaction technology is important for LNG makers as it is a must to liquefy evaporated LNG gas into a liquid form while being transported in carriers.
The dispute began in January 2014 when DSME registered the technology as a patent. The shipbuilder then began threatening HHI and Samsung Heavy not to use the technologies when building LNG ships.
In protest, HHI and Samsung filed a lawsuit against DSME with the Intellectual Property Trial and Appeal Board. But the court sided with DSME, ruling its patent valid in May 2015.
Following the ruling, DSME secured the most orders of LNG carriers of the three shipbuilders from 2014 to 2016, at 47. In contrast, Hyundai and Samsung won only 12 and eight orders, respectively.
“Both Hyundai and Samsung were misunderstood by some foreign buyers that they infringed on DSME’s patents. This made it more difficult for them to secure LNG carrier deals over the past three years,” said an industry analyst, who declined to be named.
“But the Supreme Court’s ruling will clear any obstacles for the two shipbuilders and make it easier for them to win new orders. But this is definitely not good for DSME, which has been struggling to stay afloat under huge debt,” he said.