Corporations Worldwide Join Hands to Battle Patent Trolls

      November 02, 2009 07:27

      Businesses have declared war on indiscriminate patent infringement suits filed by so-called patent trolls, which seek to profit from patent disputes rather than manufacture products using their patents. Global technology giants such as Samsung Electronics, LG Electronics, Microsoft, and IBM are moving to create a joint fund to cope with patent trolls. They are also working to form a global network to share patents and relevant information. And the government plans to cooperate with local businesses to form a W20 billion (US$1=W1,185) fund by year's end to help them defend against patent suits.

      ◆ Korean Businesses In Patent Trolls' Sights

      Silicon Valley-based Intellectual Ventures (IV), one of best-known companies that hunts for patents to profit from, has been hounding Samsung and LG Electronics for royalty payments for technologies used in their mobile phones, and threatening to sue if they do not pay up. Patent hunters like IV tend to focus their attacks on IT or biotechnology companies. They come in different forms, ranging from venture capital firms, bankruptcy specialists to patent-purchasing funds, and purchase technologies from universities or research institutes at low prices and turn them into weapons against corporations. Lawsuits filed by patent trolls have increased sharply since 2005 and frequently target Korean businesses, which have been less attuned to such threats than American or European companies. "These lawsuits are usually filed in U.S. courts so the legal fees are astronomical," said one businessman who was mired in a patent infringement suit for the past two years. "Unless you're a major business conglomerate there's almost no way to beat them."

      ◆ International Cooperation to Defend Against Suits

      Samsung and LG Electronics recently became members of RPX, a U.S. company specializing in protecting businesses from patent litigation. Established in 2008, RPX gathers funds from member companies to purchase patents, thereby preventing potential disputes. Sixteen multinational companies are members, including Cisco Systems, HP. IBM, Nokia and Sony. Another patent-protection specialist in the U.S. is Allied Security Trust (AST), whose members include Cisco, Ericsson, Google and Motorola. Meanwhile, Samsung Electronics has expanded its corps of patent lawyers from around 300 in 2005 to 540, and LG Electronics has introduced a program to train some 400 employees working in patent-related departments.   

      ◆ Corporate and Governmental Countermeasures

      The government is also working to come up with countermeasures. Yoon Kuk-sup, an official at the Korean Intellectual Property Office (KIPO), said, "We plan to form a W20 billion fund by the end of the year to purchase promising Korean technologies." With contributions from the government and businesses, the fund will grow to some W100 billion by 2014, and the government is considering offering benefits to businesses that invest. The KIPO will select the most promising technologies, and businesses that have contributed to the fund will be given first priority to acquire them. Others have called for businesses to band together against patent suits, rather than each one fending for itself.

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