February 13, 2006 – Nichia Corp. has agreed to a 600 million yen (US $5.1 million) settlement with former employee Shuji Nakamura, effectively ending litigation concerning royalties over patented blue LED technology, according to the Nihon Keizai Shimbun.

The compensation gives the company rights to 191 patents, which Nakamura (now a professor at the U. of California-Santa Barbara) developed while at Nichia. They including the core “404” patent involving a device used to produce high-quality gallium nitride crystals. Nichia, which already holds ~400 LED-related patents, says it has a production system that does not use that technology and no longer needs the patent to make blue LEDs.

Two years ago the Tokyo District Court ruled that Nichia could be liable for up to 20 billion yen (~$190 million), the largest-ever amount awarded in Japan for patent rights, a ruling quickly appealed by Nichia. In early 2005 the Tokyo High Court lowered that to ~843 million yen (~$8.2 million), with 243 million yen of the total assessed as penalties for late payment.