Hitachi has been ordered to pay 163 million yen (1.37 million dollars) to one of its former engineers as compensation for inventing optical disc technologies patented by the firm.

The Supreme Court upheld a Tokyo High Court ruling in favor of Seiji Yonezawa, who retired from Hitachi in 1996 after transferring three patents linked to optical disc technologies such as DVD to the firm from 1973 to 1977.

Yonezawa argued that a 2.3 million yen reward that he received earlier from Hitachi was unfairly low.

Hitachi criticized the court decision to grant the employer remuneration for royalties obtained from patents registered abroad.

"It is extremely regrettable that the ruling denied our argument that the employee was not entitled to compensation for granting the company the patent rights overseas," Hitachi said in a statement.

"We are concerned that this case would greatly affect corporate research activities and business operations in Japan," it said.

The lower Tokyo District Court in 2002 ordered Hitachi to pay Yonezawa 34.9 million yen, which was at the time the largest ever court-brokered award for the transfer of patent rights.

The original decision only took into account royalties Hitachi earned in Japan, disregarding money made through patents registered abroad.

In 2004 the Tokyo High Court ordered Hitachi to pay 163 million yen, including compensation for the foreign-registered patents to compensate for the substantial royalties and related contracts.