Shuji Nakamura was one of a trio recognised for their pioneering work in the creation of the blue LED, a development that paved the way for energy-efficient lighting.
Nakamura was employed at Nichia Corp. when he carried out the research that led to his invention of the blue LED in 1993, with the patent registered under the company name.
His initial bonus from the company was only 20,000 yen (less than $200), despite the huge financial gains for the firm.
Nakamura later sued his employer, demanding 20 billion yen, a record at that time in a Japanese patent trial.
In a landmark ruling in 2004, the Tokyo District Court ordered the company to pay the sum demanded by Nakamura.
"Engineers have long been ignored," Nakamura said afterwards.
Nichia appealed, but settled on a payment of 844 million yen in 2005, more than $8 million.
The case was widely watched for its potential to set a precedent for how Japanese companies treat inventors on their payroll, who generally get a pittance in exchange for sometimes revolutionary and hugely profitable inventions.
After the Nobel Prize was announced on Tuesday, Nakamura said he had been driven to great heights of scientific achievement by anger at the way he was always treated like an outsider.
Nakamura, currently a professor at University of California, Santa Barbara, never lived in Tokyo and was not from an elite university or a giant well-known firm.
He once said students looked down on him when he was studying in the United States - where he had been sent by the company - as he did not have a PhD.
"My desire to get back at them led to the invention of the (blue) LED," he earlier said, according to the Nikkei business daily.
The outspoken scientist, who is now an American citizen, was recognised along with Isamu Akasaki and Hiroshi Amano.
Japanese media effusively welcomed news of the triple win, with newspapers issuing special editions and television stations flashing the news.
Headlines ranged from "Miracle of Blue, Crystalisation of Passion" in the usually sober Nikkei to "Passion Invites Revolution" in the mass circulation Asahi daily.