The US International Trade Commission on Tuesday announced that it would investigate a complaint submitted by Black Hills Media last month regarding alleged patent infringement linked to major Korean and Japanese electronics companies.
If the ITC rules in favour of the Delaware-based electronics firm, Korea's Samsung Electronics and LG Electronics will face a ban of exports of their digital products including televisions, mobile phones and tablet PCs to the United States.
The US company filed a complaint on May 13 alleging that five electronics companies, including Samsung Electronics and LG Electronics, breached the intellectual property law in five separate cases in violation of Section 337 of the US patent law.
Japan's Toshiba Corporation, Panasonic Electronics and Sharp Corporation were also allegedly involved in patent infringement.
The investigation will be mainly on certain digital devices, including televisions, Blu-ray disc players, home theater systems, tablets, mobile phones and the associated software, the ITC said.
A major concern for the two top Korean electronics companies is the possible ban on sales of their products in the US market.
Especially with the television sales, Samsung and LG have a lot to lose as the two currently rank top in terms of their market shares in the US.
If Black Hills Media's claims are proven to be legitimate and the ITC recommends to the US president a ban on importing the products, the damage done to Samsung and LG could be severe.
The investigation is still at an early stage.
As a potential remedy, Black Hills has already requested that the ITC issue a “permanent limited exclusion order and permanent cease and desist orders” directed to the Korean and Japanese companies.
The ITC announced that it will weigh the validity of asserted patents of Black Hills Media, the validity of its assertion and the possible effects the commission's decision may have on the US market, before making its ultimate decision.