BUSINESS

[IP in Korea] ‘Samsung-Apple patent war signaled end of industrial era’

By Bae Hyun-jung

IP experts call for Korean courts to become global hubs for IP disputes

  • Published : Feb 4, 2018 - 15:23
  • Updated : Feb 4, 2018 - 18:44
The fierce commercial battles over the past years -- especially the smartphone patent war between Samsung and Apple -- prove that the world is standing at the very last stage of the third industrial revolution and on the verge of a new era, according to a senior lawyer specializing in intellectual property.

“It is during major transition periods that industrial players tend to be the most active in enforcing their rights in the form of litigations,” Kim Won-il, senior attorney at local law firm Yoon & Yang, told The Korea Herald in an interview.

The range of resources and efforts exerted into the complex legal scuffle -- dubbed the patent war of the century -- showed that the world’s top two smartphone companies were well aware of such ongoing changes, according to the lawyer.

Kim Won-il, senior lawyer specializing in intellectual property at law firm Yoon & Yang. (Park Hyun-koo/The Korea Herald)

“The Samsung-Apple patent war was the two IT giants’ struggle to exploit a declining market in the last phase of the current industrial era,” Kim said.

“Once the Samsung-Apple battle dies down, it will take a while until the next big issue appears in the intellectual property sector.”

Late last year, Samsung Electronics was ordered to pay $119.6 million in damages to Apple over the “slide to unlock” technology as the US Supreme Court dismissed the final appeal.

The brawl between the two industry champions, however, is far from over. The two companies are headed back to a California court in mid-May for a retrial to determine the design infringement damages that Samsung currently owes to Apple.

The Korean conglomerate’s claim is that the US court previously over evaluated the effect of a partial product design infringement and that the $548 million damages ought to be reduced by $339 million.

“When it comes to patents, its entire litigation history can be represented by the legal battle between Samsung and Apple, the two giants that together accounted for over 60 percent of the global market share,” Kim said.

Amid the extensive series of multi-jurisdiction litigations, Yoon & Yang provided legal consultation to Intel, the manufacturer of modem chips for Apple’s iPhone.

Intel constituted a core part of the Samsung-Apple patent war as its chips involved a standard essential patent, which means that the given patent is indispensable in order for the end product to comply with a technical standard.

Yoon & Yang, the nation’s fourth-largest law firm in sales, is recognized for its IP litigation and consultation capacity. In 2016, the company was named a tier 1 patent service provider in Asia IP Rankings by Asian Legal Business and IP Patent Survey by Asia IP.

Kim, included in the list of Asialaw’s Leading Lawyer list for 2017 in the intellectual property field, has been a pioneer in the field of intellectual property since the late 1990s.

His representative cases include the landmark multi-trillion won trade secret suit filed by Toshiba and SanDisk in 2014, accusing Korean chipmaker SK hynix of stealing NAND flash memory technology. Kim provided legal consultation to SK hynix, which later succeeded in a reconciliation at one-tenth of the original amount claimed.

In the trademark sector, he represented the nation’s major banks in 2005 and won the case in demanding the copyright invalidation of Woori Bank, which means “our bank” in Korean. Since the Supreme Court’s final ruling in 2007, the bank has been using its name without an exclusive trademark right.

The expert pointed out that due to the ever-increasing importance of intangible assets in the commercial world, it is no longer just conglomerates such as Samsung that face the risks of costly IP litigations.

“South Korea is an established frontrunner in the IT sector, with a considerable cluster of hidden champions, all of which may at any given time be subject to lawsuits filed by industry rivals or even non-practicing entities,” Kim explained.

According to data compiled by the World Intellectual Property Organization, the Korea Intellectual Property Office was ranked No. 4 in numbers of patents, with 208,830 cases issued in 2016. The country also took the first place in a number of patents per gross domestic product and per population.

“Such active practices over the years have helped Korean companies perceive the impact that intellectual property has on long-term corporate sustainability,” Kim said.

Still, most firms, especially small-sized ones, dread the possibility of facing a patent lawsuit in a foreign court and prefer costly monetary reconciliation in the early stages.

One of the plausible solutions to such a burden would be to promote Korea’s local courts as IP-related jurisdiction and to deal with disputes within the Korean legal system, but such a plan implies various challenges, according to the lawyer.

“Legal procedures in Korea are highly demanding for plaintiffs, especially when compared to the United States and other IP-advanced countries,” Kim said.

“The reality is that disputing parties would find no reason to bring their cases to the Patent Court here, unless our legal system provides them with sufficient credibility and predictability.”

A positive factor nevertheless is that the Unfair Competition Prevention and Trade Secret Protection Act and the Patent Act have recently been revised to compel the defendant to accede to presentation orders, according to the IP lawyer.

“Such gestures for improvement could act as a signal to the international commercial world that the Korean government and court have actively come forward in enforcing IP rights in the technology disputes,” he said.


By Bae Hyun-jung (tellme@heraldcorp.com)


The Korea Herald is publishing a series of interviews on experts in the intellectual property sector. This is the first installment. -- Ed.