When LG Display filed suit against Tianma Microelectronics in a Texas federal court last June, the move was notable on its face: it marked the first time the Korean panel maker had ever taken legal action against a Chinese company over alleged patent infringement. What was less visible at the time was how favorable the terrain was becoming for exactly this kind of fight.
Nine months later, that terrain has shifted further still. On March 18, USPTO Director John Squires issued a precedential ruling that denied Tianma’s attempt to invalidate the central patent in the dispute through the Patent Trial and Appeal Board, not on the technical merits, but on grounds that Tianma lacked the legal standing to file at all. The ruling closes what had been Chinese panel makers’ most reliable and cost-effective defensive tool in US patent litigation, and it does so in a way that binds all future PTAB proceedings.
For LG Display, the case just got considerably easier to win, or to settle on favorable terms.
The suit, filed June 13, 2025, in the US District Court for the Eastern District of Texas, targets Tianma Microelectronics Co., Ltd., its Hong Kong subsidiary, and Wuhan Tianma Microelectronics, asserting infringement of seven patents spanning LCD and OLED display technologies. The alleged infringements include touch-integration architectures for mobile panels, automotive display technologies, and structures used in home appliance displays.
The filing came after licensing negotiations between the two companies broke down. LG Display described the suit at the time as a decisive response to unauthorized use of technologies representing years of capital and R&D investment. Industry sources indicate the two companies had been in licensing discussions for years without reaching agreement, a stalemate that ultimately produced litigation rather than a cross-licensing deal.
Tianma is not a marginal target. The company is the second-largest automotive display supplier globally by unit volume, with roughly 16% global market share in that segment. It has a US commercial subsidiary, exhibits annually at Display Week and CES, and supplies LCD and OLED panels to OEM customers with significant US operations. The products at issue in the Texas suit are precisely those Tianma sells into the US market.
The PTAB Gambit Failure
Facing a seven-patent infringement suit, Tianma made the move that nearly every defendant in a US patent case makes: it filed an inter partes review petition at the PTAB, the post-grant review body that, since the America Invents Act of 2011, has allowed third parties to challenge granted US patents on prior art grounds. Historically, IPR carried a roughly 60% institution rate and far faster timelines than district court, making it the standard first defensive play, cheaper, quicker, and with higher historical success rates for invalidity challengers than anything available in federal court.
Tianma’s petition, filed in October 2025, targeted US Patent No. 11,251,394 B2, the most recently issued of the seven asserted patents, covering an OLED structure that integrates touch sensing directly into the panel stack. The selection was deliberate: Squires’s office had begun applying settled-expectations denials to older patents, so Tianma’s counsel focused on the one patent least likely to trigger that particular ground for refusal.
It did not matter. LG Display raised a different objection entirely, pointing to Tianma’s ownership structure. Through its subsidiary AVIC Innovation Holding, Aviation Industry Corporation of China holds more than a 10% stake in Tianma. AVIC is 100% owned by the Chinese central government, designated on the US Department of Commerce Entity List, and listed on the Treasury Department’s Non-SDN Chinese Military-Industrial Complex Companies register since June 2021. Tianma had disclosed the AVIC shareholding in its own corporate disclosure statement filed in the Texas litigation.
Once LG Display placed the ownership question in dispute, the burden shifted to Tianma to demonstrate its independence from AVIC affirmatively, with documentation: ownership charts, governance records, shareholder agreements. Tianma submitted a declaration denying government involvement in the IPR proceeding. The Director found that insufficient. Unsupported assertions, the ruling stated, cannot rebut evidence of foreign government ownership.
Director Squires grounded the denial in the Supreme Court’s 2019 decision in Return Mail, Inc. v. United States Postal Service, which held that the US federal government does not qualify as a “person” permitted to petition for AIA review. He extended that holding to foreign governments and, critically, to entities in which a foreign government holds a meaningful ownership stake, on the basis that permitting foreign sovereigns to challenge US patents through corporate intermediaries would create what he called a ready recipe for mischief. The decision is precedential, binding on all future PTAB proceedings. It also applies to post-grant review, closing both PTAB review tracks at once.
As a structural safeguard against appeal, Squires added that even if his Return Mail analysis were overturned, he would independently deny institution on discretionary grounds, citing system integrity and the risk of exploitation of PTAB proceedings by state-linked foreign entities. Federal Circuit precedent makes institution decisions largely unreviewable, making the double-barreled construction highly durable.
Tianma cannot refile. The one-year window from service of the complaint has closed. The PTAB route for this patent is permanently shut.
With the IPR option gone, Tianma retains one avenue for challenging patent validity: the Eastern District of Texas itself. That path is substantially more expensive, slower, and carries lower historical success rates for defendants seeking invalidity rulings than the PTAB route would have. Meanwhile, the infringement case proceeds on all seven patents, and a successful outcome for LG Display creates real exposure: an import ban on Tianma products entering the US market is the logical endpoint of a favorable final judgment.
Tianma has not been passive. In December 2025, it filed a countersuit against LG Display in the US District Court for the Western District of Texas, asserting four of its own LCD and OLED patents. Both cases now sit within the Fifth Circuit, both are active, and each has the potential to influence the other’s trajectory. Cross-suits of this kind often accelerate the path to licensing negotiation, giving both parties leverage while creating mutual litigation cost pressure.
The Samsung Display vs. BOE arc is instructive here. Samsung filed at the ITC in December 2022 alleging OLED patent infringement, added a trade secret misappropriation case in October 2023, and by March 2025 had won an ITC ruling finding BOE had infringed three of its OLED patents. A July 2025 preliminary ruling recommended a near-15-year export ban on BOE OLED panels to the US market based on trade secret theft. The threat of that ban, combined with Samsung’s accumulating patent victories, produced a settlement in November 2025. BOE agreed to pay royalties under a licensing arrangement that preserved its ability to continue shipping into the US The ITC investigation was withdrawn.
That outcome established a market reference point: Korean OLED IP is assertable in US proceedings and will be upheld, and Chinese panel makers operating in the US market ultimately require licensing arrangements rather than litigation wins. LG Display is building toward the same leverage position in Texas that Samsung built at the ITC, but with the PTAB now removed from Tianma’s toolkit, the path there is more direct.
The Tianma ruling did not emerge in isolation. It is the product of a deliberate restructuring of PTAB practice that Squires has been executing since taking office.
In October 2025, he assumed personal authority over all IPR institution decisions and restored strict real-party-in-interest disclosure requirements, requiring petitioners to identify all RPIs in the original petition with no opportunity for later correction. The institution rate, which had run near 60% historically, collapsed almost immediately. On March 11, 2026, Squires added new discretionary denial factors favoring patent owners with domestic US manufacturing presence and small business petitioners, a formulation that structurally advantages Korean and US panel makers asserting patents against imported Chinese panels. One week later came the Tianma ruling, adding categorical ineligibility for petitioners with foreign government ownership stakes.
The sequence reads as a coherent policy: reduce PTAB access broadly, redirect it away from foreign state-linked entities specifically, and tilt the economics of US patent litigation toward companies with domestic manufacturing investment. For LG Display, which operates OLED production in Paju, South Korea and is actively planning capacity expansion, the policy alignment is favorable even if the domestic-manufacturing factor was designed with US manufacturers primarily in mind.
For Chinese panel makers, the cumulative effect is structural. The disclosure requirement has become a trap: failing to disclose state ownership gets the petition denied; disclosing it confirms the eligibility barrier and gets it denied anyway. Nearly every major Chinese display manufacturer, BOE, CSOT, HKC, Visionox, Truly, has some degree of state-connected shareholding. All of them now face the same barrier Tianma encountered, meaning the cost of operating in the US market, whether through licensing fees, litigation exposure, or the loss of the PTAB as a defensive tool, has risen materially and without a clear path to reversal.
The Eastern District of Texas infringement case (5:2025cv00078) and Tianma’s Western District countersuit (1:2025cv02021) are both active. No trial date has been set in either proceeding. Both cases are at early stages, and the litigation could run for years before reaching a final merits resolution. The more likely outcome, given the BOE precedent and the economics now facing Tianma, is a negotiated licensing agreement, the same outcome the two companies failed to reach through years of direct negotiation before the lawsuits began.
What has changed is the negotiating position. LG Display filed this suit with a deliberate plan, seven patents across two technology categories, a favorable jurisdiction, and the ability to point to the Samsung-BOE outcome as evidence that the US legal system will sustain Korean IP claims against Chinese panel makers. The March 18 ruling removed Tianma’s most cost-effective response and added a national-security dimension to the dispute that was not present before.
The licensing conversation that Tianma and LG Display failed to complete years ago will eventually resume. When it does, it will resume on different terms.
