Sony Shells Out $40 Million to End Litigation with Ampex

November 30, 2004 – Sony Corporation agreed to shell out $40 million yesterday for patent infringements to Ampex Corporation, a company that designs and licenses digital information technologies. Sony will pay the lump sum in the fourth quarter of 2004, which will allow the company to use the patents on its digital cameras and camcorders until April 2006. After that time, Sony will have to pay Ampex running royalties.

Ampex initiated the patent litigation in July 2004, asking the International Trade Commission to ban Sony digital imaging products from import and sale in the United States. In August, the Commission launched an investigation to determine whether Sony was infringing on Ampex’s patents.

For Ampex, this case is just one in a series of lawsuits this year. In May, Ampex filed suit against Sanyo for patent infringements in their digital cameras and camera phones. The company also filed against Canon for similar reasons. Both lawsuits against Sanyo and Canon were settled in October. The details of each settlement remain confidential because of the terms of the contract, but a press release from Ampex stated the total amount of these two settlements will bring $25.1 million plus royalties. In October, Ampex initiated a lawsuit against Eastman Kodak, citing the same reasons.

Patent infringement lawsuits aren’t new to Sony either. In March 2003, a court ordered Sony to pay a hefty $25 million to St. Clair Intellectual Property Consultants for patent infringements. In March 2004, Eastman Kodak filed a suit against Sony. Two weeks later, Sony returned the favor, initiating a lawsuit for violating its intellectual property. The two companies are still negotiating. Despite all of these lawsuits, Sony Corporation still seems to remain profitable. It had $72 billion in global sales for the fiscal year 2003; $20.4 billion of that revenue came from the United States.