Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. won a suit they had filed against Daewoo Shipbuilding & Marine Engineering Co. (DSME) to seek to nullify DSME’s patent on partial re-liquefaction technology that has helped DSME to outperform its competitors in winning orders to build liquid natural gas (LNG) carriers.

According to sources from the industry on Wednesday, the Patent Court of Korea ruled in favor of the plaintiff on January 13 over the two lawsuits brought against DSME by Hyundai Heavy and Samsung Heavy, saying that DSME’s patent is invalid as there is no substantial difference between DSME’s LNG ship partial re-liquefaction technology and that of others.

The partial re-liquefaction technology refers to a technology that re-liquefies boil-off gas (BOG) to reuse it as fuels on LNG carriers. The nation’s three largest shipbuilders all claiming that they have the technology have been aggressively promoting their re-liquefaction technology in winning LNG orders against global rivals.

However, DSME registered the technology as patent in January 2014, sparking the unprecedentedly fierce patent dispute among the nation’s three biggest shipbuilders over the last three years.

Hyundai Heavy and Samsung Heavy argued that DSME has been wrongfully promoting that the technology was invented by the company even though it has been widely used by other shipbuilders. Hyundai had filed a lawsuit against DSME in December 2014 and Samsung in March 2015 at the Korean Intellectual Property Tribunal, which dismissed the suits in May 2015. By successfully promoting the technology as its own proprietary technology, DSME had been able to clinch orders to build 47 LNG vessels between 2014 and 2016, while Hyundai and Samsung brought home just 12 and 9 orders, respectively.

The patent court overturned the ruling of the tribunal saying that DSME’s technology is no different from that of Hyundai Heavy and Samsung Heavy. DSME said it would immediately appeal to the Supreme Court.

By Kim Jung-hwan

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