Negotiation Skills MRC 4073

Case 5.1 Nichia Corporation versus Shuji Nakamura: The Blue LED Dispute

Submitted to: Tan Sri Prof. Dr. Muhammad Zulkifli B.

Submitted By: Aamir Iqbal MR091168

Q #1: Do you think Nakamuras primary interest in filling the lawsuit was financial compensation? What other interests might Nakamura have had in pursuing his claim with Nichia ten years after the patents had been filed? How are Nakamuras interests consistent or inconsistent with Japanese cultural values?

Basically the financial compensation was not the primary interest of Nakamura, but Nakamura wanted to license the technology to other companies as well to expand the usage of the product and break Nichias stronghold in the industry. But on other side, Nichia do not want to release the patent as they know the potential of the technology that how much it is generating profit to the company. Nichia also hold the patent and it had legal right to Nichia that they can do whatever they want to do with the technology, and they also paid compensation to Nakamura for his efforts.

But as per Japanese culture, Nakamuras law suit was against the law. Because in Japanese patent law employee own the patent until the employee is working with the company, and the company at the same time has the authority to use the patent. Japanese patent law also said that reward should be paid to the employee for his/her contribution in the patent which is transferred to the employer.

Q #2: What rights arguments might Nakamura have made during the initial pre-lawsuit negotiation with Nichia? How are these rights arguments cultural?

Initially Nakamura tries to negotiate with Nichia demanding a greater reward of 100 million ($1 Million). But these negotiations were unsuccessful and in 1999 Nakamura resigned from Nichia. Nichia already compensated Nakamura in return of patent, so this kind of reward demand was not cultural and lawful in Japan.

Q #3: What power options did Nakamura have in his dispute with Nichia? How are these strategic options cultural?

Nakamuras claim for reward against the patent was strong and even the court was supporting Nakamura and rejected Nichias argument. Court supports that Nakamura contribution to invention worth 60 billion based on the profit company received. But as Nakamura only demanded 20 billion only, so court awarded that some of money to Nakamura.

Q #4 What were Nichias positions and interests in this negotiation with Nakamura?

Nichia was more focused on its benefits, and was taking stand that Nakamura was employee of the company when he invented the technology Nakamura was the employee of the

company, and the invention was made with the help of company and other co workers. At that time, Nakamura was awarded sufficient compensation for the patent. Nichia was strict on that argument and do not want to lend transfer patent to Nakamura and even it seems that Nichia was not so interested in giving any kind of compensation again.

Some how Nichia was strong in its arguments but the court was supporting Nakamura in the sense of compensation, as it worth more than Nakamura demanded. In this sense it seems that Nichia does not have any strong position in this negotiation.