2024-05-23 Multiple Indictments in Largan Precision’s Infringement Case R&D Personnel Accused of Reproducing MVTec’s Patented Software Prosecutors Determine Violation of Copyright Law, Court Hearing Scheduled for the 31st

【Reported by Liu Fang-miao, Taipei】
Largan Precision Co., Ltd. (3008) has been sued by a German company for allegedly using pirated software to manufacture mobile phone lenses. According to informed sources, the Taichung District Prosecutors Office’s investigation determined that Largan and several R&D personnel violated copyright laws by illegally reproducing software. Consequently, they have been indicted for violating copyright laws. The first court hearing at the Taichung District Court is scheduled for the 31st of this month.

As for Largan Precision’s former and current chairmen, Lin En-chou and Lin En-ping, the prosecutors found insufficient evidence to prove their knowledge or involvement in the case, and therefore decided not to indict them. Dissatisfied with this decision, the German company whose rights were infringed has filed an appeal with the Intellectual Property Branch of the Taiwan High Prosecutors Office.

Largan Precision is the world’s largest manufacturer of mobile phone lenses and was Taiwan’s top stock from August 2014 to May 2021. Since 2013, the second generation has fully taken over the company, with the founder Lin Yao-ying’s eldest son, Lin En-chou, and second son, Lin En-ping, serving as chairmen successively. Starting in 2013, Largan Precision initiated a series of patent battles against competitors, filing lawsuits against companies such as Genius Electronic Optical, Samsung Electronics, HP, Ability Opto-Electronics, Newmax Technology, and Motorola Mobility for patent infringement.

It is understood that the German company MVTec received a whistleblower report alleging that after purchasing the “HALCON” software from MVTec, Largan Precision illegally cracked and copied it for extensive use. This software, designed and developed by MVTec, is protected by intellectual property rights and provides a complete set of standard industrial image processing technologies, primarily used for calibrating the curvature of mobile phone lenses.

Informed sources indicate that the HALCON software is available in different versions based on functionality, specifications, and price: a development version and a runtime version. The development version can use all features, while the runtime version can only use a subset of them.

When customers purchase the HALCON software, they must provide a corresponding number of MAC addresses as the “Licensed Host ID”. Each HALCON software license can be bound to only one MAC address. Legal use is only possible after receiving the authorization file from the German company and completing the software setup.

Informed sources revealed that at the end of 2018, during internal discussions about the quantity of “HALCON” software needed, a R&D manager at Largan Precision instructed employees to temporarily halt applications for legally purchasing “HALCON” software. Instead, they were directed to study how to crack and duplicate the same MAC address to deceive the software detection system. This method was used to install the software on thousands of computers, thereby infringing on the intellectual property rights of the German company MVTec.

Although the investigation has concluded and indictments have been made, the prosecution, at Largan Precision’s request, has classified their illegal proceeds as a “trade secret” that could reveal Largan Precision’s production capacity. Therefore, these details have been designated as “non-disclosable” in the case files.

【2024-05-23 / Economic Daily / Page A11】

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