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Tech giant urged to enhance in-company patent management, sign cross-licenses
By Baek Byung-yeul
Samsung Electronics has increasingly become a target for non-practicing entities (NPEs), also known as patent trolls, who file lawsuits against the tech giant, demanding royalties based on their patents for similar technologies, according to industry analysts, Wednesday.
Concerns have been growing that Korean companies are easy prey for these patent trolls, as seen in a recent case where Samsung was hit with a lawsuit from a former executive who had been in charge of intellectual property management of the company.
Korean companies will continue to be embroiled in such lawsuits as they are at the top of the world in terms of the number of intellectual property, the analysts said, adding that the more patents they hold, the more lawsuits against them will increase.
An NPE is a company or person holding patent rights. Instead of engaging in manufacturing or otherwise making use of their intellectual property, NPEs generate profits by patent trolling, or seeking licensing deals via negotiation.
According to data by the Korea Intellectual Property Protection Agency, Samsung was sued for patent infringements 403 times in the United States between 2017 and May 2021. During the same period, LG Electronics was involved in 199 cases, Hanwha and Hyundai Motor were each involved in 11 cases and SK hynix in seven cases.
The latest lawsuits Samsung is fighting are patent lawsuits filed by a company led by former Samsung Vice President Ahn Seung-ho. The executive is a U.S. patent attorney who worked for Samsung's patent law department from 2010 to 2019. After leaving the company, he established an NPE called Synergy IP and submitted 10 patent lawsuits in partnership with U.S.-based company Staton Techiya LLC.
Despite Samsung being embroiled in numerous lawsuits, this case was especially unusual, due to the direct involvement of its former executive, who had overseen the company's patent management. The patent technologies claimed by Ahn are related mainly to wireless audio technologies, applied to Samsung's smartphones, wireless earbuds and its Bixby artificial intelligence platform.
A Samsung Electronics official said, "The lawsuit was made known to the public by a court in the U.S. state of Texas. It is our principle not to discuss any legal disputes we are currently going through."
An IT industry official said that Korean tech companies ― especially Samsung ― that operate various businesses, such as semiconductors, smartphones, TVs and home appliances, have become easy targets for patent trolls, as these high-tech industries are intertwined with a large number of patented technologies.
"As Korean companies have secured a lot of patents, they are increasingly facing lawsuits. Moreover, Samsung is the main target of NPEs as it occupies the largest shares of many IT sectors, such as phones and chips," the official said.
To defend themselves from such lawsuits, companies here are increasing their defense capabilities by strengthening in-company patent management organizations and signing cross-licenses with global companies in various business areas.
Ryan Song, a law professor at Kyung Hee University, said that protecting patent-related rights is an important part of doing business in the West ― such as in the U.S. and Europe. In this regard, Korean companies should increase their measures against patent infringement.
"Since Korea is technologically advanced and has a higher number of patent applications compared to other developed countries, many issues related to patents arise. I think the ability of Korean companies to combat infringement is not strong overall in the industry. In patent lawsuits, big law firms here lack techniques compared to overseas law firms ― perhaps because they have not participated much in such areas yet," Song said.
