Samsung’s Patent Alliance
Samsung’s expansion of its patent alliances with other IT companies is drawing a lot of attention in the industry. Experts are saying that the Korean firm’s soft-line policy on patents is intended to prevent patent disputes, which are considered to be one of the potential business risks. Moreover, Samsung’s move is said to be aimed at pressuring and compromising with Apple, which is directly involved in patent disputes with the Korean tech giant.
Samsung announced on February 6 that it signed a 10-year broad patent cross-licensing deal with networking equipment supplier Cisco. With this agreement, both companies will be able to freely use their existing patents and those that will be granted over the next 10 years. Although details were not revealed yet, they reportedly agreed on using a broad range of each other’s patents, including related to networking and the Internet of Things (IoT).
The Korean firm has recently struck a series of wide-ranging patent cross-license deals with other global IT companies as well.
Samsung signed a 10-year broad cross-licensing deal with Google on January 27. The Korean tech company also discontinued a patent lawsuit against Sweden-based Ericsson that lasted more than one year, and reached a comprehensive cross-licensing agreement with the Swedish firm.
Samsung’s recent move is deemed to be aimed at minimizing potential risks for patents and focusing on technical innovation with patent-sharing agreements in the face of its lengthy patent infringement battle with Apple and the offensives of Non-Practicing Entities (NPEs), or patent trolls.
A source in the industry said, “Large-scale patent alliances started in the global market three or four years ago.” The source added, “Samsung apparently changed its course toward patent sharing, since its burden on unnecessary costs of many patent disputes, including its patent battle with Apple, increased.”
Meanwhile, industry analysts are saying that Samsung’s patent-sharing move is intended for Apple, which has been in the patent battle with the Korean tech giant for nearly three years. In fact, the number of patent lawsuits between the two companies has increased to 50 cases in nine countries, after its first case began in April 2011. At first, Samsung’s brand awareness increased tremendously, as the patent battle between the two tech giants was called the lawsuit of the century. However, the efficiency of the dispute decreased over time, owing to enormous costs such as indemnities and attorney’s fees. Furthermore, as the Korean company was defeated in the first patent infringement lawsuit in the US, a second case scheduled at the end of March is becoming a potential risk for the company.
As a result, Samsung’s alliance with other IT companies can be interpreted as a strategic move to strengthen its ability to respond to patent disputes so that it can pressure Apple with the image of a “habitual patent litigator.”
Some in the industry, however, think that Samsung’s move is to create prior conditions for compromising with Apple. The Korean firm needs to renegotiate with its arch-rival before February 19 under the court order. Samsung Mobile Business Chief Shin Jong-kyun and Apple CEO Tim Cook are going to attend the mediation session.
Another industry source said, “Samsung’s basic stance is to end its patent war with Apple,” adding, “This is a crucial moment for the company to negotiate with Apple, so that it can persuade the US tech giant that it is in a more favorable position.” The official concluded by saying, “Samsung probably intends to create a positive negotiation environment with a detour strategy that enlarges its patent alliance with other global IT companies.”