Patent infringement had not been a common phrase for the global electronics industry in the past, and companies only had to focus on ramping up the design factor to appeal to customers and create a feel that was different from others.
The software that goes inside the device, or rather, just how much of the technology is really “theirs,” was not so significant.
But that changed completely with the introduction of smartphones and other devices dubbed “smart,” a trend led by Apple Inc. a few years back.
Electronics companies are now entangled in all kinds of patent disputes whether it involves core technology, or the touch, look and even the feel of gadgets.
According to Seoul-based patent attorney Kang Min-soo, the number of patent infringement claims filed in the U.S. totaled up to 2,500 cases in the first two months of the year, up to March 1.
“Until 2011, the figure of patent infringement claims filed in the U.S. was merely a bit over 3,000,” he said. “But as we can see, the trend is on a sharp rise nowadays.”
Rationale behind the disputes
Experts say that there are many reasons behind such cases involving the violation of intellectual property.
With smart gadgets showcasing a wide range of features, it includes numerous technologies that may carry patents filed by those who claim it to be their own.
“Today’s smartphones and tablet PCs are multifunctional devices that incorporate numerous technologies. In the field of technology, there are countless numbers of patents,” said Florian Mueller, a Munich-based intellectual property analyst.
“We’re seeing the phenomenon of convergence with several industries that used to operate independently ― mobile phones, consumer electronics, computer hardware, software and the Internet ― merging into one mega industry, in which major participants use intellectual property as one of the various ways to fight for market share.”
Kang also said that the rise of the so-called “patent trolls,” referring to firms such as intellectual ventures that do not manufacture electronic devices but form a consortium or a group with a strong patent portfolio to collect royalties, has contributed to the increase.
“They are dubbed a non-practical entity in the industry and the problem surrounding this is that the company that this group is going against in the patent dispute can’t make countermoves since there’s nothing to attack them with because they only have patents but no products,” said Kang.
Ongoing patent battles
Most recently, Samsung Electronics and LG Electronics are locking horns over the eye scrolling technology embedded in Samsung’s latest Galaxy S4 unveiled last week.
LG claimed that it had rights to the scrolling technology that recognizes eye movements, stating that it applied for a related patent in Korea in December 2005.
The firm said it also applied for its “Smart Video” patent in August 2009, which pauses a video when the user is not looking at the screen.
Samsung said that it may look similar to consumers but it used the firm’s proprietary technology for the smart scroll and pause functions in the new Galaxy smartphone.
LG is planning to look more closely into the issue as soon as the Galaxy S4 is released and determine whether to push ahead with a legal suit.
The world’s No. 2 TV maker has more than 200 people on its patents team at its “Patent Center” located in Seocho-dong, southern Seoul. It plans to expand the figure by 30 percent within two to three years.
More attention-grabbing is the long-drawn-out patent suit staged worldwide by the two top smartphone makers, Samsung and Apple.
The suit, which was first filed in the U.S. in April 2011, is still in dispute after Samsung received a $1.05-billion fine for patent infringement from a jury at the San Jose court last year.
So far, Samsung has won a reduction of about 45 percent from that amount from U.S. District Judge Lucy Koh on March 1.
The two parties are also waiting for the final determination from the U.S. International Trade Commission involving intellectual property violations.
The trade agency will rule on May 31 on whether Apple’s product infringed on Samsung’s patents. It will also determine on Aug. 1 whether Samsung’s smartphones and tablets violated Apple’s intellectual property.
In the meantime, Apple and HTC announced last November that they have settled their ongoing patent dispute, opting for a 10-year licensing agreement. The two were fighting more than 20 cases worldwide.
“But HTC was relatively small at the time, while Samsung is now the market leader, making this dispute a much more strategic conflict,” said Mueller. “Also, the dispute between Apple and HTC never involved design-related rights, while Apple vs. Samsung is about Google’s Android operating system as well as exterior product design.”
Cross-licensing no longer the trend
For Samsung and Apple, reaching a cross-licensing agreement was one of the most talked-about options throughout the global battle.
Many experts predicted that the two rivals will eventually come to an agreement and pay each other for the opposite’s licenses.
However, that seems to be changing as it has become a nothing-to-lose battle for both of the companies.
Samsung has largely gained brand recognition while becoming the world’s top smartphone manufacturer, whereas Apple is destined to do all it takes to prove that Samsung copied its designs.
“This is the only case involving patent infringement from which both parties benefited” said an industry insider who wished to remain anonymous. “It looks like there is no turning back, at least at this point of time.”
Mueller also said that “it wouldn’t make strategic sense for either party to settle.”
“In particular, I think it’s critical for Apple to win the appeal of (U.S. District) Judge Lucy Koh’s denial of a U.S. sales ban in December last year,” he said.
It also makes more sense for Samsung to maintain its stance against Apple right now as it remains to be the world’s top smartphone and feature phone maker on top of its much improved name value, according to Kang.
By Cho Ji-hyun (
sharon@heraldcorp.com)
