Sankyo Co., a subsidiary of TECO Electric & Machinery Co., has been suing Sharp for patent infringement concerning domestic sales of LCD TVs that were using AUO panels. Sharp settled with Sankyo/TECO and cross-licensed with AUO.
Sharp’s internal LCD capacity is not enough to fulfill all the demand from its Sharp TV BU. So, Sharp went looking for LCD merchants and found AUO to be suitable. My guess is that AUO’s LCD TV panel technology infringed on Sanky/TECO’s patents. The settlement of the lawsuit and cross-licensing with a supplier of LCD TV panels that are much needed to continue competing, is a plus plus for Sharp.
Source: Nikkei Electronics Asia