SEOUL, Feb. 21 (Korea Bizwire) — South Korean firms are being targeted by U.S.-based non-practicing entities (NPEs) or patent trolls that acquire patents to make profits by filing patent infringement lawsuits. Rather than actually going through with the lawsuits, they seek to extort early settlements.
NPEs are those who make profits by acquiring and managing the patent rights of other companies without being engaged in technological developments or manufacturing activities.
The number of cases where South Korean companies were sued by patent trolls in the U.S. increased from 90 in 2019 to 111 in 2020, according to the Korea Intellectual Property Protection Agency.
In the January to September period of last year, the number of such cases totaled 130, a sharp increase from a year ago.
When it comes to the patent infringement suits filed in the U.S., the process from litigation to settlement takes about two to three years on average.
There are many cases in which the accused businesses attempt to settle the cases by paying royalties to NPEs due to the risks they have to bear when losing the suits, including the prohibition of their sale.
Against this backdrop, large Korean companies are easy prey for NPEs. Among the 111 suits that patent trolls filed against Korean companies in 2020, 105 suits were filed against large conglomerate companies.
In particular, Samsung Electronics Co. has become the main target since it has a wide business portfolio ranging from semiconductors to smartphones, TVs and home electronics, with a large portion of its revenue stemming from the U.S. market.
Over the past five years, NPEs filed more than 300 patent infringement suits against Samsung in the U.S.
M. H. Lee (email@example.com)