By Susan Decker

Nov. 19 (Bloomberg) -- Samsung SDI Co., the world's second- biggest maker of plasma screens, and bigger rival Matsushita Electric Industrial Co. are near a settlement of a two-year-old legal dispute in the U.S. over patents for the televisions.

The two companies ``have entered into a memorandum of understanding in which they have agreed in principle on terms and conditions of a formal settlement and cross-license agreement,'' they said in a joint court filing.

Samsung SDI, based in Suwon, South Korea, and Osaka, Japan- based Matsushita, maker of Panasonic televisions, have accused each other of infringing patents for plasma televisions in a suit pending in federal court in Los Angeles. In a separate suit in Pittsburgh filed in 2005, Samsung SDI accused Matsushita of infringing three additional plasma TV patents.

Analysts project plasma television sales will peak next year as consumers seek bigger TVs and then fall in 2009 because of competition from liquid-crystal displays and declining prices. Matsushita has about a third of the global market for plasma panels, and Samsung has more than a quarter.

Last month, Matsushita projected it will ship 5 million plasma TVs in the 12 months ending March 2008.

Revenue from plasma display panels is projected to rise 18.5 percent to $10.2 billion next year, declining to $9.05 billion in 2009 and $8.7 billion by 2011, El Segundo, California-based researcher iSuppli Corp. said in August.

Matsushita spokesman Jim Reilly declined to comment on a possible settlement. A spokesperson for Samsung didn't immediately return a message seeking comment.

The cases are Samsung SDI Co. v. Matsushita Electric Industrial Co., 05cv1680, U.S. District Court for the Western District of Pennsylvania; and Samsung SDI v. Matsushita, 05cv8493, U.S. District Court for the Central District of California, Western Division (Los Angeles).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net .

Last Updated: November 19, 2007 18:03 EST

http://www.bloomberg.com/apps/news?p...