Korean companies facing patent infringement issues with global IT giants will band together to fight back. Their idea is to raise money for legal fees through a securities token offering (STO) system and return it to STO investors if they win a patent infringement lawsuit and receive compensation.
According to industry sources on Oct. 23, Bizmodeline is promoting a patent monetization STO project based on this structure with securities companies. For each project, it builds an STO service and platform that strategically collects patents held by various companies and monetizes them through litigation.
Bizmodeline focused on the idea that if stakeholders related to a specific business or service join forces around their own patents, a powerful patent pool will be created. The key is to create an STO system that can be commercialized in various forms, including litigation projects.
Bizmodeline is a patent specialist with more than 3,000 important patents developed in-house. The company believes that Apple has infringed upon its patents in the Apple Pay payment process and is considering various responses to it.
Bizmodeline believes that a mobile near-field payment method used in Apple Pay infringes upon a patent it filed in 2005.
Apple Pay’s offline payment requires exchanges and authentication of encrypted user credit card numbers with store terminals. This is similar to how banks use OTPs for online banking authentication and apply them to credit card payments. Bizmodeline believes that Apple infringes upon its patented one-time authentication token code technology in offline payment technology.
While Bizmodeline is confident of winning the patent case, it feels burdensome due to the fact that its opponent is Apple, a global IT powerhouse. Apple has hired the largest law firm in Korea to handle the issue. In addition, it could take years for a judgment to be issued, so Bizmodeline will have to expend huge legal and transportation costs in the litigation process.
To address this problem, Bizmodeline will form a united front with other Korean SMEs, which are having legal battles with Apple or claim that Apple violated their patents.
In particular, Bizmodeline will focus on companies that have business relationships with Apple, which makes it difficult for them to respond directly. Individual companies have been hesitant to file lawsuits because they fear that Apple will end trade with them. But by forming a consortium, Bizmodeline intends to expand legal battlefields and share profits from patent infringement compensation with investors to strengthen its market surveillance capabilities. Industry sources say that many companies have already expressed their intention to join the consortium.