|Samsung Electronics' semiconductor manufacturing plant in Hwaseong, Gyeonggi Province / Courtesy of Samsung Electronics|
By Baek Byung-yeul
Samsung Electronics is taking a hardline stance against non-practicing entities (NPEs) that mainly generate profit by "patent trolling." Industry officials said Thursday that Samsung's recent countermeasure strategy against one NPE seeks to hinder further abuse of patent and licensing regulations and proactively protect its intellectual property.
NPE refers to a company or a person who holds a patent or patent rights. Instead of manufacturing or exploiting the patented invention, the NPE generates profits by the negotiation of licenses.
According to an industry source, Samsung recently filed a suit against Longhorn IP and its affiliate Trenchant Blade Technologies in the U.S. District Court for the Northern District of California, Nov. 20, seeking a declaratory judgment of non-infringement and to enforce a covenant not to sue.
Samsung's legal action against Longhorn IP was begun as the Korean tech company believes the NPE breached an agreement they made last year, officials and sources involved with the issue said.
In 2019, the two had been engaged in a legal tussle over semiconductor-related patent rights and reach a deal not to initiate additional lawsuits against each other. However, Samsung decided to take legal action as Longhorn IP's affiliate Trenchant Blade Technologies sent a confirmation letter to Samsung in April admitting that the latter infringed on patented Samsung semiconductor technologies.
The patented technologies, which are said to be required to manufacture DRAM memory chips and system chips such as Exynos, were known to be transferred by Taiwanese chip manufacturing company TSMC. Usually, patent disputes are lengthy, overseen by specialized judges and losers in such lawsuits must pay the winner's legal fees. That creates a high-risk scenario that is unappealing to patent trolls, according to experts.
The "hidden implications" over the NPE's allegation against the world's top manufacturer are unknown. Regarding the lawsuit that Samsung filed, the company said, "There's nothing to comment on regarding the issue."
An industry official said Samsung's move is interpreted as the company's "pre-emptive" action as it increasingly falls prey to such entities. "Samsung took legal action against the NPE in a concerted effort to prevent further patent lawsuits," the official said.
Given Samsung recruited patent attorneys in September for the first time in years, another official added Samsung took the proactive step as it expects there would be growing patent disputes involving its core technologies: system semiconductors, foundry and display technologies.
"It's not uncommon for Samsung to proactively file a lawsuit against NPEs. It seems Samsung is preparing for possible patent disputes targeting its core businesses including not only chip technologies but also other sectors such as display technologies," the official said.
With more devices and semiconductors of Samsung being used in the global market, Samsung has been increasingly exposed to the abusive litigation tactics of patent trolls.
Data from the Korean Intellectual Property Office (KIPO), global NPEs have filed 212 patent lawsuits against Samsung from 2012 to June 2019. The number of patent lawsuits involving not only Samsung but also other Korean companies has increased as local companies rely heavily on exports and other global players try to capitalize on patent conflicts to hinder the advance of Korean businesses in their markets.
During the same period, the KIPO data showed LG Electronics had been embroiled in 227 patent lawsuits with patent trolls.
Last year, Samsung was subject to a series of patent infringement lawsuits filed by NPEs. In June 2019, Mountech IP sued Samsung over the text entry system for the Galaxy Note 10 smartphone. In July the same year, Gui Global Products filed a suit claiming Samsung's wireless earbuds infringed its patented technology.
In 2020, Samsung has been subject to patent infringement claims lodged by various firms including Princeps Secundus, Neodron and Solas OLED.