China's Hisense Electric Co will continue to promote Sharp brand TVs in the U.S. market under the brand-licensing contract between the two sides while defending its legal rights in a lawsuit, according to a note Hisense sent to the Global Times on Monday.
Sharp sued Hisense in a local court in the state of New York for Hisense's alleged infringement of Sharp's WLAN-related property technologies among some TV sets sold in the US, Japan's Asahi Shimbun newspaper reported on July 18.
Besides damage compensation, Sharp also sought a permanent injunction that would forbid Hisense from manufacturing and selling infringing products, the report said.
"Our lawyer is handling the lawsuit at the moment, and I will not comment on the case itself. Hisense has never stirred up any trouble and will definitely not cower in the face of trouble," Zhu Dan, vice president of Hisense International, told the Global Times on Monday.
"As a company with a 50-year history, Hisense has accumulated some experience and property rights in the TV line," Zhu said, noting the company will continue to promote Sharp's brand and products, and carry out the terms under the brand-licensing contract between the two in a more discreet way.
Sharp Corp initially sued Hisense in June, claiming that the Chinese company is tarnishing its brand by selling poor-quality TVs in the U.S. and deceptively advertising them.
"We were very shocked by Sharp's one-sided announcement that it would take back the brand in the North American market without any pre-communication with Hisense," Zhu said, adding this not only went against the spirit of the contract, but also showed extreme disrespect for Hisense.
Hisense took over Sharp's plant in Mexico and its brand sales in North America from January 2016 to January 2021 when Sharp was going through financial problems with serious losses in the market in 2015.
"Hisense went all out to improve the structure and market shares of Sharp's products after taking it over by assigning talent, revitalizing the plant and injecting technologies, and the results are obvious," Zhu said.
The sales of Sharp brand TVs are expected to increase 47 percent in the U.S. market in 2017, including 3.6-fold growth for 4K TVs. The market share of the product is estimated to reach 7.8 percent, according to Zhu.
Sharp Corp and Taiwan's Hon Hai Precision Industry Co, known as Foxconn, the current parent of Sharp, will build a plant to assemble big-screen TVs in the U.S., expanding plans for local production that already include a liquid crystal display factory, Japanese business publication Nikkei reported on July 22.
The two companies will aim for high-end TVs for the North American market with products like ultrahigh-definition 8K models, it said.
Zhu said that the company will stick to its strategy in making advanced products, adding they have set up seven research institutions in overseas.
Both Sharp Corp and Foxconn cannot be reached as of press time.
