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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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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.

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