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Company defends its actions, pointing to Microsoft and Apple's strategy: buy other companies' IP; sue with it

Today Samsung Electronics Comp., Ltd.'s (KSC:005930) smartphones are threatened with bans thanks to Apple, Inc.'s (AAPL) ambiguous patents from a decade ago.  And Samsung pays an estimated $15 USD per handset to Microsoft Corp. (MSFT) for its war chest of patents.  In other words, the world's best-selling smartphone maker has received a cold hard crash course on the twisted state of the U.S. intellectual property system.

Now it's looking to apply those hard-earned lessons and do some patent harassment of its own.

Samsung Electronics' sister-firm Samsung Display announced this week that in March it spent $25M USD to buy up patents on LCD, LED, and OLED display technologies from Japan's struggling Seiko Epson Corp. (TYO:6724) and launch a shell company, Intellectual Keystone Technology (IKT).

Based out of Washington, D.C., the new firm isn't exactly bashful about its objectiveness, which are the same as those of most shell companies: find corporate targets, demand they license, and sue if they don't comply.

Samsung TV
Samsung Display is looking to play the patent litigation game.  [Image Source: Flickr]
An unnamed Samsung spokesperson told The Korea Times, "Companies should be paying licensing fees for patents. We are paying to platform providers such as Microsoft in return for using their patents. IKT will be tasked to find out which patents are helpful and valued for Samsung."

Samsung Display was the world's largest LCD TV shipper in Q1 2013 according to Display Search.

The patents from Epson include a number of patents on organic light-emitting diodes (OLEDs), a new form of display technology that's expected to dominate the television and mobile device display industry over the next few years.  The patents also cover ultra-high definition display technologies, such as the "4K" display format that debuted commercially this year.

In other words, the Samsung Group -- having played the victim in the U.S. -- appears to be embracing the patent industry's dark side, with lots of juicy targets to sue.

Source: The Korea Times

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One Big Ugly Mess... Patent Wars
By ssnova703 on 5/27/2013 12:11:00 PM , Rating: 3
Talk about opening a can of worms.

It sucks, but at the same time you can see their stand point, "if they're doing it, why aren't we doing it too?" Samsung seemed rather passive at first with Apple, trying to be diplomatic in settlement(CEO of Samsung calling Apple, trying to settle it out of court), but NOOO, Apple wanted to stand their ground and sue the opponent for all they could.

It's kind of like if you're not doing it, you're being a sucker, but it's horrible when it has become and what it is becoming.

RE: One Big Ugly Mess... Patent Wars
By Tony Swash on 5/27/13, Rating: -1
RE: One Big Ugly Mess... Patent Wars
By Fleeb on 5/27/2013 3:45:04 PM , Rating: 2
So basically you are not refuting the described behavior of companies such as Apple?

RE: One Big Ugly Mess... Patent Wars
By Tony Swash on 5/27/13, Rating: -1
By Cheesew1z69 on 5/27/2013 7:24:00 PM , Rating: 3
I was pointing out that ssnova703 was talking bollocks
How ironic...

RE: One Big Ugly Mess... Patent Wars
By insurgent on 5/27/2013 8:39:42 PM , Rating: 2
It's not really a negotiation if one side insists on dictating the outcome is it? You're such a tool.

RE: One Big Ugly Mess... Patent Wars
By Boze on 5/27/2013 11:56:46 PM , Rating: 5
You know why I f**kin' hate you and wish you'd get hit by a bus, Tony?

Its not because you like Apple. I know a lot of people who like Apple. My older brother has an iMac, an iPad, an Apple TV, and an iPhone.

Its because you try to excuse away all their bulls**t behavior. They're scumbags. Period. I still wish I had invested in their company in the 80s though. I don't care that they're scumbag patent trolls. They deserve to be scumbag patent trolls because the laws allow them to be.

I bought a substantial portion of Starbucks shares in 1995. The stock's split several times since then. The past couple of years is been paying out some great dividends. But what I don't do, is go around telling everyone how f**kin' amazing Starbucks coffee is. It isn't. I can and do make better coffee at home with my Breville machines.

But its a good investment.

I wish you could pull your head out of your rectum and realize this sort of thing.

By retrospooty on 5/28/2013 6:16:59 AM , Rating: 1
"You know why I f**kin' hate you and wish you'd get hit by a bus, Tony? Its not because you like Apple. I know a lot of people who like Apple. My older brother has an iMac, an iPad, an Apple TV, and an iPhone. Its because you try to excuse away all their bulls**t behavior."

LOL +1 ... Yup. Apple can do no wrong. There is nothing more pathetic that someone that gets on the internet on behalf of a company, to promote every product they make and every crappy move they take. What am I missing? I just don't get it. I like Android, and I use it, but I would drop it the second something better comes along. I don't give 2 shits about Google, Samsung, or any other company that makes any product I buy, bought, or intend to buy. WTF is the motivation here?

RE: One Big Ugly Mess... Patent Wars
By Tony Swash on 5/28/13, Rating: -1
RE: One Big Ugly Mess... Patent Wars
By Cheesew1z69 on 5/28/2013 9:20:57 AM , Rating: 2
So because it's the oldest and most successful, that means we should not feel that way towards them? LOL

Who gives a fuck how old or successful they are, besides idiots like you.

You really are stretching in your support for them.

Generally I feel a lot of the more extreme hostility towards Apple is simple based on their success.
And of course, you would bee wrong, as usual.

Go outside and have some fun :)
Follow your own advice and quit sucking the Apple teet...

You are a loser, plain and simple.

RE: One Big Ugly Mess... Patent Wars
By BRB29 on 5/28/2013 9:39:06 AM , Rating: 2
You can hate on a product and it doesn't matter but why hate on the company itself.

I never understood why people wish doom on Apple as a business because their product didn't offer an open platform and features. They definitely stirred up the entire industry and consumers are rewarded with better products because of it.

You don't have to buy their products and people are starting to to do it. You still want apple to be around because it's another strong competitor.

It's clear that their business strategy is not to be a monopoly. They just want the high end market of any product they sell. They used the same ruthless lawsuit tactics every other business have done for decades. Apple just have deeper pockets and went further.

I haven't bought apple products for years but I still want them around so I can have phones like HTC One or tablets like Transformer Prime Infinity/Nexus 10 or 7.

By Cheesew1z69 on 5/28/2013 10:18:13 AM , Rating: 2
It's clear that their business strategy is not to be a monopoly.
Yes, it's TOTALLY clear by trying to BAN the competition they don't want to be a monopoly. Are you retarded?

RE: One Big Ugly Mess... Patent Wars
By bug77 on 5/28/2013 11:23:20 AM , Rating: 2
They used the same ruthless lawsuit tactics every other business have done for decades. Apple just have deeper pockets and went further.

I just used the same greeting as others have done for years (I shook your hand). I just have a lot more muscles and tore your arm off.

By Bound_4_Valhalla on 5/28/2013 12:02:31 PM , Rating: 2
My first post on this site...I stood up and had to clap over your response bug77; very poignant.

By ssnova703 on 5/29/2013 1:04:55 PM , Rating: 2
I never understood why people wish doom on Apple as a business because their product didn't offer an open platform and features. They definitely stirred up the entire industry and consumers are rewarded with better products because of it.

It's the abuse they put on their consumers(sure Apple has that "right" to do so, but as a business tactic it pisses me off), let me explain.

Proprietary standards forced upon us...ok, done! Jk..

I can appreciate some of the industrial design Apple has come out with on their products, but conceptually they were meant to be reliant on Apple(upgrades, repairs, etc.), by design/business tactic, essentially Apple products have a shorter life cycle(as good quality and as well as they may hold their value).

Take for example, the regular MBP, Apple came out with a proprietary screw hole so as to make the consumer go to Apple for upgrades/repairs(with outrageous prices at that).

Their intents were made more obvious with the rMBP, gluing(smothering it with a silicone epoxy like mess) and soldering components, forcing the user to pay higher prices for factory upgrades.

In addition...and yes, one could argue it's Apple's right... but as a someone who wants to develop for iOS due to market demand from the sheeple.. Apple forces a developer to buy a Mac to develop... I hear ignorant sheeple all day long raving, "that's because pc's are inferior or can't handle it"... but it's not that at all(PC's have superior hardware when configured, not to mention they are both x86), it's solely a business tactic... I'm forced to buy a mac if I want to develop for iOS(yes I know about OSX86, however you have to sign the apps and they register your machine...bottomline it's not legit).

All the while, everyone's drooling over Apple products like an accessory item that's "cute" or "purty".

Product life cycle as well... it's all planned and designed(not saying they don't have a right to do so, but it's nasty tactic on the consumer)... for example, even if the hardware could handle the progression of newer updates, they plan a lifecycle cut off so you have to buy the "newest thing". I would go as far to say that almost every Apple product released is purposely hampered/lacking in order to force the user to upgrade to a newer model...this is by their design/business plan This can be foreseen with the ipad mini,intently hampered on release with the older processor and lower resolution... people buy into the buzz(not saying it's a bad product, just it was designed to be axed).. new ipad mini2 comes out... retina screen, A6(maybe x) proc, new camera, BUT... they will probably intently hamper one aspect(my guess is RAM)... and then comes the cut off point ipad mini3 with 2gb ram(all the rest of the specs) for say ios 8, etc. etc. rinse/repeat... they play the same pattern and it's easy to see, which is why I'm annoyed by them, yes it's smart, yes they have the right to do so, yes they have the muscle to force the users/followers to do so.. but with that, I don't like being played... and the sad thing is.... it seems like MS is copying this tactic too to an extent but they haven't gotten their *bleep* together yet.

Samsung on the other hand seems to be catching on to this slightly as well... releasing slightly "hampered" down products in anticipation for the next(Galaxy Note 2, had just enough to make consumers buy it, but with some dissappointment, G Note 3 will not only attract new users, but maybe people upgrading from the Note 2... this is a page from Apple's book, which I despise, but it's not nearly as bad as what Apple is doing.. and with their shiny new releases many don't care)... but not nearly as bad as apple, hence I don't mind them as much. Plus they aren't using proprietary plugs(well, let's face it, if they had the "muscle" to push something, they would, like any company... why? to make money... why? it's a corporation's duty to increase stock value, among other things....but that's a whole different discussion..)

RE: One Big Ugly Mess... Patent Wars
By bug77 on 5/28/2013 10:51:30 AM , Rating: 3
That seems an awful of intense negative energy to feel about one of the oldest and most successful companies to ever come out of the original Silicon Valley...

Compared to IBM, it not that old and is not that successful either. Building your arguments on trivia, just as always.
Fwiw I don't hate Apple because of their success, I hate them because I'd hate to live in a world where all companies were conducting business the way Apple does.

RE: One Big Ugly Mess... Patent Wars
By evo slevven on 5/29/2013 1:18:11 AM , Rating: 1
There is a saying that goes sometimes asking nicely doesn't help anything unless you have the power to enforce. However if success is the factor to which then, logically speaking, shouldn't you correct your statement to reflect the manner that while Apple is the current dominant tech firm in the smartphone industry it is equally failing to show the growth as well .

IF we were to be rather "vulcan" about it (to take a Trekkie term rather) about the situation and take the emotion away from the argument then based on the failure to achieve expected growth, its current revenue forecast, sales that are typically indicative of the growth and ability of a company to expand then it'd be logical to say that Apple is closer to where Microsoft was in its prime and that the outlook for Apple looks rather bleak.

Even to this emotionless and rather logical argument we could also include all quantitative data regarding the higher adoption rates, usage, activation of Android~based phones as well as further subdivide the quantity of them as Samsung phones.

If you had to really be honest and "enjoy" the argument, then it seems Apple is in a decline and that the usage of patents to leverage towards competitors is nothing more than a ploy to either limit the actual scenario of loosing the sector dominance to Samsung eventually as well as a reflection of the inability to continually innovate in a field? OF course this part is a hypothetical but strictly looking at the data, one thing is for certain and that is Apple isn't achieving the same momentum it used to nor is it growing by the same standard and rate as Samsung. This part is quantitatively factual.

I thought though I'd correct some of the stuff for you in a wall~o~text for the sake of correctness and facts. Feel free to also check Apples earning reports regarding its first ever year-over-year revenue decline since 2003. Not a doomsday scenario but indeed not a positive sign.

Corrections courtesy of my Samsung Chromebook tethered to my samsung s2 because obviously Chromebooks get far fewer viruses than any Apple OS :D

By Cerin218 on 5/31/2013 5:15:12 PM , Rating: 1
Because in reality, Apple only exists because it got lucky. It made an MP3 player that people liked which kept the company alive long enough to create the iPhone. If it weren't for those two products Apple would have been RIM and they MIGHT exist today as a graphic design niche. Schools stopped using Mac because there was no purpose to teaching children on a computer that the business world didn't use. I lost my love for them during PowerPC simply because I could get a better PC compatible cheaper, and with all of the third party vendors I could get parts WAY cheaper.

By ven1ger on 5/31/2013 5:11:34 PM , Rating: 2
I wouldn't hate someone like him, just pity him. People like Tony are a bit extreme about their choices and will do anything to defend it. But, at least he isn't advocating violence.

People like Tony are the tech version of the crazy nuts that hang out on public streets by public transportation that goes off on anything, at least that's the way I view him. But like the crazy person on the street, best not to engage them, but ignore them, unless they get violent then you put them away or put them down.

By ssnova703 on 5/27/2013 5:37:04 PM , Rating: 2

Regarding some diplomatic talks, there were other ones I can't dig up from further back.

Now, regarding your statement, I believe it's used out of context, not negotiating as in they don't intend to totally bow down to Apple's monetary requests.

"It may be true that HTC may have agreed to pay 300 billion won (US$276 million) to Apple, but we don't intend to [negotiate] at all"

By Xplorer4x4 on 5/29/2013 7:20:13 PM , Rating: 1
November 14th 2012 you say? Apple filed suit Spring of 2011. The first day of trial was July 30, 2012. The trial lasted until September 7, 2012.

So essentially the quote says nothing about what Samsung did or did not do in the year prior to court? Typical Tony Bullocks.

RE: One Big Ugly Mess... Patent Wars
By retrospooty on 5/27/2013 4:54:29 PM , Rating: 2
Yup... There can be no denying it now. Samsung really is copying Apple now. Lovely. Another reason not to buy anything from either company ever again.

RE: One Big Ugly Mess... Patent Wars
By ssnova703 on 5/27/2013 5:41:58 PM , Rating: 2
"They play dirty? Fine! Two can play this game!"

But who can we really support? Even if we did try to support the smaller guy who is being bullied by Apple and doesn't have the muscle to fight back, it could be a loss cause if they go belly up.

At the end of the day, the "superior" will get my vote, regardless... but when the big boys play together, they don't play nice... it's unfortunate, but it's what makes them compete at that level...NOT saying they "have to" do it, but if MS and Apple have a chest of patents to sue for(whether it's legit or trolling/abusing power for their benefit), you gotta do it too for leverage....otherwise, it won't be long until you're out. Yes, it sucks, yes the system is broken, business politics is nasty, etc. etc. that's reality.

By retrospooty on 5/27/2013 10:59:41 PM , Rating: 2
"when the big boys play together, they don't play nice... it's unfortunate, but it's what makes them compete at that level...NOT saying they "have to" do it, but if MS and Apple have a chest of patents to sue for(whether it's legit or trolling/abusing power for their benefit), you gotta do it too for leverage....otherwise, it won't be long until you're out."

LOL... It's totally game of thrones.

By ssnova703 on 5/27/2013 5:43:35 PM , Rating: 2
Crap meant "superior product"... typo and when I was referring to the little guy, I meant smaller companies like HTC, lol... obviously not Samsung.

By cyberguyz on 5/28/2013 8:31:45 AM , Rating: 2
Samsung couldn't ask for a better role model. It has been learning from the best - Apple - one of the litigation giants of the world.

Line the lawyers up against a brick wall...
By Amiga500 on 5/27/2013 1:20:57 PM , Rating: 4
Shoot the f**king lot of them and let the rest of us get on with our (relatively extremely productive) lives.
</disgusted engineer>

How long does this have to go on before there is a case in the courts for this patent-litigation culture detrimentally affecting consumers? Who would take it on anyway? The FTC? Unlikely.

It definitely is a major, major influence on companies' R&D, with many fearful of "wasting" money developing "new" technology independently that has been patented by someone else. This stifling of R&D results in a poorer product for consumers.

The 5 line Amiga500 reform of the patent system would be:
- Cannot patent software algorithms.
- Cannot patent natural phenomena (such as gene sequences).
- If you do not bring a product to market, or show verifiable and serious development of a product which uses the patent within 3 years of applying for the patent, you lose the patent.
- If you buy a company, that company's patents becomes open to everyone. [i.e. trading of patents is void.]
- Subtle iterations to previous technology or products is not patentable and is considered natural product evolution.

By FishTankX on 5/27/2013 7:41:44 PM , Rating: 2
how would your patent rules work with licensing? as normal?

By TheEinstein on 5/27/2013 11:15:43 PM , Rating: 2
I am not sure how the purchasing of companies would pan out. I might be in favor of a reduced time span rather than an outright 'end'

By Strunf on 5/28/2013 7:38:35 AM , Rating: 2
A good start would be to limit patents to 5 years tops, regardless of what you do with it.

Another thing is that you shouldn't be able to patent concepts that exist in other forms, example your rectangular phone with round corners is still a rectangle with round corners which is a known shape since the dawn of times, the same with interactions it's not cause you use 2 fingers to zoom in and out that you made something new, the zoom in zoom out exists since a long time and it's logical that the way to do it will keep changing and adapt to people.

By ssnova703 on 5/29/2013 12:36:03 PM , Rating: 2

The saying goes, "don't hate the player, hate the game"

Lawyers use the law/legal system to get what their clients want. Name of the game, as they play for money. As many would argue, perhaps our system needs to be re-examined/re-vamped a little...

Good for legal departments.
By jammo on 5/27/2013 12:16:06 PM , Rating: 4
Yay! Let's spend more money on our legal depts by suing one another, than what we spend on R&D! Heaven forbid developing products, and IP, to generate a profit.

RE: Good for legal departments.
By Solandri on 5/27/2013 3:46:15 PM , Rating: 1
Ultimately, it's the legal system which is to blame. If suing for patent infringement is more lucrative than spending money on R&D, then that's where companies will spend money.

That's what everyone's been saying about patents (and copyrights) in a roundabout fashion. But the judges, lawyers, and lawmakers have a stick up their collective *sses thinking that adherence to the letter of the law is more important than making sure those laws are written and interpreted in a manner which a net positive for the economy.

The fundamental premise behind IP is that the benefit to the IP holder is greater than the harm to everyone else. That way if (theoretically) everyone were an IP holder, it would be a net gain for society. But the instant the harm to others becomes greater than the benefit to the IP holder, the rationale for IP ceases to exist. If suing over IP is more lucrative than investing in R&D, that's a pretty good sign we've crossed that threshold.

RE: Good for legal departments.
By ven1ger on 5/31/2013 5:03:04 PM , Rating: 2
The USPTO needs to share blame in this. For some reason, it started granting what is basically software patents. Software patents should never have been allowed, but its now snowballing where even the legal system can't deal with it nor can it do it consistently as every judge has a different opinion on it.

The USPTO left it up to the courts to determine the validity of the patents it granted.

Happy Hunting
By morgan12x on 5/27/2013 11:24:02 AM , Rating: 2
I'm not particularly a Samsung fan but after all the crap they've gotten from MS and Apple all I can say is happy hunting. I hope they can make the other guys realize that you reap what you sow.

RE: Happy Hunting
By Mitch101 on 5/27/2013 11:56:51 AM , Rating: 2
Microsoft and Apple don't make displays but Apple uses them in products. This will effect Apple more than Microsoft. What Samsung can do is pressure all other manufacturers with a fee. Sure sounds like a good idea but Samsung could be alienating themselves in the process.

By mchentz on 5/27/2013 11:39:28 AM , Rating: 2
I'm not a Samsung fan or Apple fan. I tend to like Microsoft but life's a bitc# get a helmet as far as I'm concerned about Microsoft. The raw deal that Android in particular is getting from Microsoft irritates me.

RE: Karma
By BifurcatedBoat on 5/28/2013 6:05:57 PM , Rating: 2
I tend to like Google, but I fear what will happen when the original founders are no longer running the company, for whatever reason.

Whoever takes over next may not really have much concern for ethics, and will be inheriting control over a huge database of information.

By A11 on 5/27/2013 12:55:23 PM , Rating: 2
Wouldn't this be much more about Samsung's patent dispute with LG than anything MS/Apple ?

To my knowledge neither MS nor Apple is in the display business.

RE: ?
By bill.rookard on 5/27/2013 4:31:13 PM , Rating: 2
Well, think about the direction that the mobile world is going. Devices like that need built in screens, those screens are increasingly going to be newer tech such as OLED which Samsung now owns patents for - so Samsung will have a pretty significant hold on those (now) very important patented tech. Apple at that point would be tied to either using older tech or having to pay Samsung to sell their devices.

I see what they're doing. Not happy about the direction this is all going and we really need to start getting this under control.

By DanNeely on 5/27/2013 1:16:56 PM , Rating: 3
If these were strong patents they've gone for a lot more than $25m.

In the event that they actually are only interested in fair market value licensing they might be able to get their moneys worth out of them; but I don't see anything that sold this cheaply making any progress against the big companies if they use it as ammunition for lawfare.

Samsung is the new Apple
By superflex on 5/28/2013 11:39:33 AM , Rating: 2
and so are its followers.
How do sheep bleat in Korean?

RE: Samsung is the new Apple
By Cheesew1z69 on 5/28/2013 12:10:16 PM , Rating: 1
I think it's "I am a troll", like you are...

Makes you think
By bug77 on 5/27/2013 12:59:07 PM , Rating: 2
Is it time for a patent reform NOW?

By timothyd97402 on 5/27/2013 1:45:37 PM , Rating: 2
An innovative technology that has been expensive and risky to develop is worthy of patent protection and those who infringe on such a patented technology deserve to be sued if they refuse to license it.

Unfortunately lack of action by our Congress and inappropriate action by our courts have combined to produce a horribly broken patent system on the U.S. and elsewhere.

People today seem to be able to patent a ham sandwich. Patents are too vague and far too broad in scope. Proper attention is not paid to "Prior Art" in excluding patent applications either.

Courts created software patents and that has created a big mess. Apple decides to have their IOS devices do a rubber band effect on screen when a display reaches the end of a list, so they can patent that? I'm sorry, it's cute, but there is no way that should be patentable. It is a simple software trick. Like as not someone has done it before. Apple should not be able to tell me that I can't write a program on my own hardware that does something similar. It is like an author being able to patent a particular plot twist in a book. He can't do it because patents don't apply to authorship and neither should they apply to software.

By kamiller422 on 5/28/2013 4:49:15 PM , Rating: 2
Apple, Microsoft, etc. do not manufacture displays. They have devices that use them, but wouldn't Samsung have to take that up with Apple & MS' parts supplier?

Just what we needed
By BifurcatedBoat on 5/28/2013 6:02:58 PM , Rating: 2
I'm actually only surprised that it took them this long to make it a business strategy.

I figured as soon as companies saw what they could get away with under IP law as illustrated by the likes of Apple and MS, they would secretly move to get this plan in motion immediately. Maybe they did.

By SherryMorris41 on 5/28/13, Rating: 0
"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs

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