LED lighting company Cree has settled its patent infringement and false advertising complaints against a major competitor and, as a result, expects to exceed its previously announced revenue and net income targets for its current fiscal quarter.
Durham-based Cree reported Tuesday that it reached a confidential settlement of its complaints against Feit Electric and its Taiwanese supplier, Unity Opto Technology, that it filed last year with the U.S. International Trade Commission and in federal court in Wisconsin. In addition to alleging that Feit’s LED bulbs infringed on 10 Cree patents, Cree also contended that Feit was misleading consumers by touting that certain of its bulbs meet Federal Energy Star standards. Cree sought an order barring those products from being imported into the U.S.
The settlement ends the trade commission’s investigation of Feit and Unity. In August an administrative law judge ruled that Feit’s LED bulbs infringed on Cree patents. That sent the case to the commission, which could have adopted, modified or reversed the decision.
Although financial details of the settlement weren’t disclosed, Cree said Feit has entered into a licensing agreement for the patents in dispute and will pay ongoing royalty fees under that agreement.
Never miss a local story.
In addition, Cree also settled a patent infringement lawsuit that Feit filed against it in federal district court in Raleigh last year in the wake of Cree’s legal actions. That settlement calls for Cree to license the rights to two Feit patents.
The net financial impact of the settlement is clearly in Cree’s favor, since the company asserted in its announcement that as a result of the settlement it now expects to exceed “previously announced revenue, net income and EPS (earnings per share) targets” for its second fiscal quarter that ends on Sunday.
“This settlement and license agreement recognizes the value of our pioneering technology and ensures we are properly compensated while protecting consumers and Cree shareholders,” Cree CEO Chuck Swoboda said in a statement issued by the company.
Cree shares closed Tuesday at $27.58, up 11 cents. The company’s shares have risen 3 percent this year.