Patent trolls target top Korea companies, politician claims

Big Korean companies are being preyed upon by patent trolls, according to a Korean politician.

Some owners of intellectual property do not use technology they own to make products. They charge others to use it, and will often take companies to court claiming infringement and seeking compensation and damages.

At least one politician says some of these companies are patent trolls, which make absurd claims about their ownership of technologies and profit by getting judgements in their favor or getting defendants to settle to avoid expensive trials.

According to data from the office of Rep. Shin Jeong-hoon of the ruling Democratic Party on Sept. 26, 707 lawsuits were filed in the United States against the 20 most-sued local companies for patent infringement since 2017.

Among the 707, 530 cases, or 75 percent, were filed by non-practicing entities (NPEs). NPEs hold patent rights without intention of developing or manufacturing a product. Patent lawsuits filed by manufacturing companies that are non-NPEs made up for 25 percent, or 177 cases.

“Local companies are struggling due to frequent lawsuits filed by the ‘patent trolls,’” said Rep. Shin.

A total of 406 cases, or 57.4 percent, were settled by the parties involved. The court dismissed 113 cases, or 16 percent. Currently, 168 cases, or 23.8 percent, are pending.

“Patent disputes in the United States require a lot of time and money, and many companies try to arrange a settlement before the final ruling,” said Park Seung-kwan, a researcher at the Korea Patent Attorneys Association. “NPEs take advantage of the situation and file numerous lawsuits.”

Many of the patent litigations filed against local companies are aimed at Samsung Electronics. Lawsuits filed against the electronics maker were 413 of the total 707 cases, or 58.4 percent. NPEs lodged 76.3 percent of the suits. The lawsuits were settled for 245 cases, and 107 cases are currently in progress. Of the cases in which judgements have been rendered, Samsung Electronics won three cases and lost 13.

“NPEs who aim to generate profit through lawsuits buy patents and mostly target big name players in the market,” said researcher Park.

McKinney, Texas-based 5G IP Holdings filed a suit against Samsung Electronics in early September claiming the electronics maker infringed on patents related to 5G technology. Dublin’s Scramoge Technology filed six lawsuits in a federal court in Texas in April against Samsung Electronics claiming infringement of its wireless charging technology patents.

The United States International Trade Commission initiated a patent infringement investigation into Samsung Electronics and LG Electronics after Dublin’s Sonrai Memory filed a lawsuit claiming the two companies infringed its patents related to semiconductors in early August.

“It could be that there are a lot of patent litigations against Samsung Electronics because it has over 200,000 patents, but it’s also true that Samsung Electronics is the main target of NPEs,” said an industry source who wished to remain anonymous.

LG Electronics followed, with 199 patent litigations filed against the company since 2017 in the United States. Of them, 118 cases were settled. The company has won one lawsuit and lost none, and 34 have yet to be decided or settled.

Hanwha and Hyundai Motors came next, both with 11 patent lawsuits filed against them.

BY KIM TAE-YUN, LEE TAE-HEE [lee.taehee2@joongang.co.kr]