April 11, 2024   

Signify Secures $500,000 in LED Licensing Dispute

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Texas lighting maker offers costly sum to settle dispute with the world’s largest lighting company


In what appears to be the end of a 15-month legal dispute between Signify and Texas-based theatrical lighting maker, Mega Systems Inc., Mega Systems has agreed to a $500,000 judgment towards settling Signify’s legal claims. This resolution comes as part of an offer of judgment filed by Mega Systems in the United States District Court Southern District of New York. The agreed sum is intended to cover amounts owed to Signify through the end of 2023, encompassing costs and potentially putting an end to the claims brought forward by Signify in this action.

The dispute arose when Mega Systems allegedly ceased royalty payments under a licensing agreement initially established with Philips in January 2011. At the core of this legal battle is Signify’s EnabLED Licensing Program, initiated by Philips (now under Signify) in 2008. Signify licenses patents ranging from fundamental LED controls to complex system-level technologies.


Signify’s Allegations

Signify's complaint against Mega Systems was filed in January of 2023 and outlines a series of breaches related to the licensing agreement. Notably, in the third and fourth quarters of 2021, Mega Systems is accused of failing to pay the required royalties despite submitting the necessary reporting forms. This non-compliance extended into the first three quarters of 2022, with an estimated magnitude of royalties similar to those of 2021. The complaint further alleges that Mega Systems continued to utilize patented technologies in their products, such as the Mega-Lite Colorlite Q120 and Mega-Lite XS Strobe RGB, without fulfilling the financial obligations stipulated in the licensing agreement.


Above: Excerpt from Signify’s legal complaint filed against Mega Systems

The case, filed in the Southern District of New York, saw Signify demanding both monetary damages and specific performance, including a formal accounting of all revenues received by Mega Systems from LED products starting January 1, 2022. The offer of judgment by Mega Systems, while not an admission of liability, suggests a willingness to resolve the dispute and may lead to the conclusion of this legal chapter, subject to court approval and the provision of accurate financial sales data by Mega Systems.


As lighting companies navigate the complex landscape of patents and innovations, the resolution of disputes such as this one offers critical insights into the enforcement and compliance mechanisms that underpin industry-wide competition and technological advancements.