Daewoo Shipbuilding & Marine Engineering Co. (DSME) will be banned from promoting partial re-liquefaction system technology for liquefied natural gas (LNG) carriers as its proprietary technology after it has lost the three-year-long court battle against its rivals Hyundai Heavy Industries Co. and Samsung Heavy Industries Co.

According to multiple sources from the industry on Wednesday, the Supreme Court has rejected an appeal raised by DSME to review the Patent Court’s January rule in favor of Hyundai Heavy Industries and Samsung Heavy Industries that have sought to make DSME’s patent on partial re-liquefaction technology invalid.

The Supreme Court’s flat rejection without hearing indicates the previous decision by the Patent Court of Korea that has nullified DSME’s patent on the technology citing a lack of any substantial difference between its technology and those of its rivals was indisputable, industry observers said. Following the latest court’s final decision, DSME will not be allowed to promote the partial re-liquefaction technology as its proprietary technology when selling its LNG vessels.

The partial re-liquefaction technology is used to re-liquefy naturally vaporized boil-off gas (BOG) in an LNG carrier’s cargo hold and reuse it as fuel. Recycling of vaporized gas helps significantly boost a vessel’s fuel efficiency, and orders for environmentally-friendly LNG carriers that use a mix of diesel and BOG or natural gas as fuel for operations have been growing amid enhanced environmental regulations on ship operation.

DSME appeared to have benefited from its patent on the partial re-liquefaction technology helping DSME outperform its competitors in winning orders to build LNG carriers. But the technology has been widely used among other shipbuilders in the industry and the patent held by DSME should be nullified, its competitors have argued.

Hyundai Heavy Industries and Samsung Heavy Industries launched patent invalidation battle against DSME to the Intellectual Property Trial and Appeal Board in December 2014 and March 2015, respectively, after DSME registered the patent on the partial re-liquefaction in January 2014.

By Moon Ji-woong

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]