Chip manufacturing

Nikon and ASML settle in immersion lithography battle

The major dispute between Nikon and ASML over giant optical-exposure machines for producing computer chips has come to a surprising end. Both companies as well as ASML’s German supplier, Carl Zeiss SMT, agreed last night to end their global dispute.

23 January 2019 by Mathieu Klos

© ThorstenSchmitt/STOCK.ADOBE.COM

The three companies signed a Memorandum of Understanding on what is a comprehensive settlement. According to a joint press release, Nikon, ASML and Zeiss have agreed to a cross-license agreement. The two Japanese competitors Nikon and ASML have battled it out in several countries, above all in the Netherlands. In Germany, ASML supplier Zeiss was brought into the dispute. Smaller suits were also pending in France. These proceedings are now mutually terminated as well as all proceedings in Japan and the United States, including those at the U. S. International Trade Commission.

Bert Oosting

The terms of the Memorandum include a payment to Nikon by ASML and Zeiss totalling €150 million. In addition, the cross-license agreement in the memorandum includes mutual royalty payments of 0.8% for the sales of immersion lithography systems for 10 years.

It is thus the market which will decide which of the two largest manufacturers will profit most from the agreement in the long term. According to market analysts, ASML is currently the market leader in this segment and as such Nikon is seen as profiting from the settlement and comparatively low one-off payment.

One of the top 10 battles in Europe

The case was one of the largest and most important patent disputes in Europe last year and is regarded by lawyers as being the biggest patent dispute at the Netherlands courts.

The two sides had been trying to reach a new license agreement since 2010 after the previous agreement ran out the year before. The dispute started in Europe in May 2017 when Nikon brought eleven claims against Dutch lithography system manufacturer ASML before the Dutch patent court. ASML responded by filing its own suit accusing Nikon of infringing more than ten ASML patents in the manufacture of semiconductors, flat screens and digital cameras. ASML also filed nullity suits against the Nikon patents, with further speculation that ASML had recently filed up to ten more cases.

Willem Hoyng

The dispute then spilled over into Germany. Initially, Nikon filed two infringement suits at the German regional courts against ASML’s supplier Carl Zeiss. Here the dispute saw its first important judgment early last year, which essentially ended in a tie. The number of cases recently rose to four, as Nikon filed an additional suit at the Mannheim court.

It is unclear to observers what triggered the settlement. The Mannheim court had recently resumed proceedings, but there had been no recent verdict in Germany or the Netherlands.

Multi-firm teams

Nikon is represented by an international team of litigators from Hogan Lovells and Freshfields. Both law firms have been involved since the beginning of the trial. However, it is not the first time the two law firms have shared a client: Apple relies on Hogan Lovells and Freshfields for its German and Dutch procedures.

Internationally, the Nikon case is managed by Jack Londen, partner at Morrison Foerster’s San Francisco office. A large in-house team from Japan is also involved.

Klaus Haft

Klaus Haft

The fact that Dutch company ASML retained the largest Dutch IP boutique for this global dispute is not surprising. The instruction of Hoyng ROKH Monegier for the German proceedings in which Nikon attacked Zeiss and not ASML was made independent of ASML’s relationship with the Hoyng ROKH Amsterdam office. The German team has a long-standing relationship with Zeiss.

For Nikon
Hogan Lovells: Bert Oosting, Klaas Bisschop, Ruud Van der Velden (all Amsterdam), Andreas von Falck, Alexander Klicznik (both Düsseldorf) and associates
Freshfields Bruckhaus Deringer: Rutger Kleemans (Amsterdam); Frank-Erich Hufnagel, Wolrad Prinz zu Waldeck und Pyrmont (both Düsseldorf) and associates
Arnold Siedsma (Amsterdam): Arjen Hooiveld (patent attorney)
Hoffmann Eitle: Mark Jones (London), Thomas Becher (Düsseldorf), Christopher Furlong (Munich, all patent attorneys)
Morrison & Foerster (San Francisco): Jack Londen

Hoyng ROKH Monegier (Amsterdam): Willem Hoyng, Bart van den Broek and associates

For Carl Zeiss SMT
Hoyng ROKH Monegier (Düsseldorf): Klaus Haft, Christian Osterrieth, Tobias Hessel, Stefan Richter and associates
Glawe Delfs Moll (Hamburg): Christof Keussen (patent attorney)
Ostertag & Partner (Stuttgart): Gernot Schwanhäußer (patent attorney)
Ruff Wilhelm Beier Dauster & Partner (Stuttgart): Thomas Muschik (patent attorney)
K&L Gates (Frankfurt) Dr. Thorsten Vormann and associates
Brinkhof (Amsterdam): Richard Ebbink
In-house (Oberkochen): Andreas Zeiler (head of patent strategy), Eugen Herrmann (patent department)

Updated at 28.01.2019

You can find more information on this case and the advisors here, here and here.