LG Electronics and Matsushita have ended their plasma patent dispute.

Under the agreement, which is still being finalised, Matsushita (known for its Panasonic brand), will withdraw an injunction filed with the Tokyo District Court to stop imports into Japan of plasma screens from LG's Japanese unit, while LG will withdraw a suit filed in Korea to stop the import of plasma screens made by Panasonic, the two companies said.

The agreement includes a cross-licensing agreement for plasma screens and certain PC and DVD technologies and brings to an end all legal action between the companies.

Plasma panels are the key component for plasma TVs, shipments of which are rising as consumers replace their bulky CRT (cathode ray tube) TVs with slim-line plasma and LCD models. Global plasma TV shipments were a record 1.1 million units for the final three months of last year, up 173 percent compared to the same period during the prior year.

Panasonic was the leading plasma TV brand with a 19 percent global market share in the last quarter of 2004, while LG was number two with 14.5 percent. The agreement comes just over a year-and-a-half after the two companies started talks over various patent issues.

In August 2003, Panasonic contacted LG alleging that certain plasma models sold in Japan were in violation of two of Panasonic's patents, and asked LG to pay royalties. LG responded with claims of its own regarding various patents related to PC and DVD technologies.

After talks broke down in November, Panasonic asked for the injunction to stop the import to Japan of LG-made plasma screens. The following day, LG filed a petition with the Korean Trade Commission to ban the import and sales of Panasonic plasma screens in South Korea. Dates for lifting the imports bans were not disclosed.

"During negotiations we have come to an understanding about the dispute and we are confident that we can build a mutually beneficial relationship," said a spokesman for Panasonic.