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Samsung, Google agree on patent peace accord

Apple to be isolated as companies use each other’s technologies

Jan 28,2014
Samsung Electronics has signed a 10-year peace treaty with Google that will prevent the two companies from waging a patent war against one another, a move the Korean tech firm believes will help further isolate archrival Apple.

Samsung said yesterday it signed a patent cross-license agreement that covers “a broad range of technologies and business areas” with Google. The “mutually beneficial agreement” covers not only existing patents but also new patents to be filed by 2023, Samsung said.

“We’re pleased to enter into a cross-license with our partner, Samsung,” said Allen Lo, deputy general counsel for patents at Google, in a statement.

Samsung said the deal paves “the way for deeper collaboration on the research and development of current and future products and technologies.”

Samsung declined to detail how many of the two companies’ patents will be subject to the cross-license deal, saying that it is confidential. But a significant portion of the patents held by Samsung and Google are believed to be included. Samsung holds about 100,000 patents, while Google owns around 50,000.

“We can’t say everything, but it is wide ranging and comprehensive,” said a Samsung Electronics official.

The deal, analysts say, will help the two companies improve on each other’s weak points: software in the case of Samsung and hardware for Google. But Samsung is also expected to benefit from some of the hardware technologies that Google has worked on in recent years, such as robotics and wearable devices.

“Google has many patents from the companies it has bought, so there is room for Samsung to use them to develop its own technologies,” said a person in the local information and telecommunications industry.

The Samsung-Google deal will help Samsung’s efforts to brand Apple as some kind of maverick in an otherwise friendly IT ecosystem.

Since making a license deal with InterDigital in 2009, Samsung has signed license or cross-license agreements with other IT global companies including Microsoft, IBM, Toshiba, SanDisk, Kodak, Nokia, SK Hynix, Intellectual Ventures and Intertrust.

With Google’s patents, Samsung could also be more successful in making its case in legal battles with Apple. Samsung owes Apple $930 million from two jury verdicts in Silicon Valley.

The statements of the two companies reflected an intention to keep Apple in check. “By working together on agreements like this, companies can reduce the potential for litigation and focus instead on innovation,” Lo of Google said.

Ahn Seung-ho, the head of Samsung’s Intellectual Property Center, said the deal sends a significant signal to the technology industry.

“Samsung and Google are showing the rest of the industry that there is more to gain from cooperating than engaging in unnecessary patent disputes,” he said.

Samsung formed an alliance with Google in 2007 in response to Apple’s iPhone, which paved the way for Apple’s brief reign as the world’s largest smartphone vendor, supplanting the struggling Nokia.

In the third quarter of last year, though, Android-based phones made up 78.3 percent of the smartphones sold around the world, overwhelming Apple’s 15.8 percent.

Samsung Electronics’ market share at 32.9 percent was more than double Apple’s 15.8 percent last year.

“Global IT companies have suffered fiscal and psychological costs due to reckless litigation over patents,” said an expert in a local IT industry.

“The agreement between Samsung and Google will become an exemplary case of coexisting through cooperation rather than excessive competition.”

So Hyun-chul, an analyst with Shinhan Investment, cautioned about reading too much into the deal but said that it does signal that Samsung’s relationship with Google is better than it seemed.

Samsung has been working to release a phone based on an operating system, which it has been developing with Intel and some other global technology companies, creating speculation that it is moving to wean itself off Google’s Android system. The Tizen Phone is expected to make its debut as early as next month.

“It seems right that Samsung is trying to diversify with its operating system, but this Samsung-Google deal shows that their relationship can’t be easily broken,” said So.

Also, yesterday, Samsung announced it had settled a patent dispute with Ericsson AB and struck a new licensing deal with the company over wireless technology in smartphones, televisions, tablets and Blu-Ray disk players, according to Bloomberg News.


BY MOON GWANG-LIP AND KIM YOUNG-MIN [joe@joongang.co.kr]



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