Fri, May 13, 2011 - Page 12 News List

ITRI denies Samsung deal is unfair

Staff Writer, with CNA

Democratic Progressive Party Legislator Pan Men-an speaks during a press conference yesterday, saying that agreements signed by the Industrial Technology Research Institute with Samsung in 2009 over patent infringement lawsuits could adversely affect Taiwanese electronics companies.

Photo: Chang Chia-ming, Taipei Times

The government-funded Industrial Technology Research Institute (ITRI, 工研院) denied yesterday that its patent lawsuit settlement with Samsung Electronics Co last year has negatively affected the interests of Taiwanese companies.

However, ITRI president Shyu Jyuo-min (徐爵民) refused to disclose the details of the settlement, citing confidentiality.

The ITRI’s denial came after Democratic Progressive Party (DPP) Legislator Pan Men-an (潘孟安) yesterday accused the Hsinchu-based research institute of signing unfair agreements with Samsung to settle several patent lawsuits, citing a report by the Chinese-language Wealth Magazine (財訊).

The magazine reported that the settlement could affect patent rights that local companies, including flat panel maker AU Optronics Corp (友達光電), purchased from the institute.

In June and October of 2009, the ITRI filed a total of seven patent infringement lawsuits against Samsung and its US unit with a US court in Arkansas.

Citing the magazine report, Pan told a press conference yesterday that the ITRI settled the lawsuits with Samsung last year for less than NT$2 billion (US$70 million), while authorizing Samsung to use more than 100 of its patents.

However, under the settlement, the ITRI also signed an agreement with Samsung not to sue, agreeing not to pursue its patent claims against the South Korean firm in the fields of consumer electronics, flat-panel displays, -communications and semiconductors where the institute now owns patents or is applying for patents over the next six years, Pan said, citing the magazine report.

If the ITRI sells these patents to a third party, the third party should also not sue Samsung, according to the report.

Pan said the number of patents included in the covenant not to sue accounted for about two-thirds of the ITRI’s roughly 14,000 patents, worth more than NT$10 billion.

As these patents are valid for 20 years, the signing of the agreement not to sue would mean Taiwanese firms could not pursue patent claims against Samsung for the next 26 years, thus posing a huge threat to local electronics firms, Pan said.

Pan said he would ask the Ministry of Economic Affairs and the ITRI to submit a special report on the settlement to the legislature.

In response, Shyu said that the ITRI did not agree to sell patents involved in the settlement exclusively to Samsung when it reached the deal last year with the South Korean company, which is seen as a rival by local electronics companies. Nor did the ITRI ink any deal with Samsung on cross-licensing, he added.

In a statement, the ITRI described the accusation as “false” and said that it has continued to work closely with local companies in patent lawsuits and technology development.

The ITRI, which said it was considering taking legal action against Wealth Magazine, said the report has caused a “major impact” on the ITRI’s ongoing lawsuit against LG Electronics Inc of South Korea.

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