17 Apr

New Korean NPE seeks biometric security royalties from Samsung, Apple

There is a story going around in the Korean, Chinese and English-speaking media suggesting that Samsung Electronics faces a $2.8 billion patent infringement claim related to biometric technologies from US company PACid. This looks like a possible case of media mis-reporting. More interestingly, Samsung is facing down another challenge also based on its touch-to-unlock feature, this one from what looks like a new Korean NPE.

First, in a case that has generated headlines for what is allegedly an eye-watering damages claim, Samsung Electronics is facing a lawsuit from PACid alleging infringement of two US patents related to user authentication. The complaint was filed on 6th April in the Eastern District of Texas, but as far as I can see makes no specific mention of damage amounts. The claim that it is the biggest damages claim ever appears to have originated in the Korean press, which  arrives at the 3 trillion won ($2.82b) figure by assuming that the asking rate is $1/handset, PACid wants treble damages and then multiplying sales figures for all of the models named in the suit. Where that $1 figure comes from is a mystery. At any rate, as of now it’s pure speculation.

PACid is run by Guy Fielder, who is also the original assignee of each patent-in-suit. The company’s website names him as Compaq Employee #18. While the Samsung assertion is this specific entity’s first, similarly named vehicles linked to Fielder have previously litigated against the likes of Apple, Cisco and Asus.

Perhaps more consequential is the emergence of an NPE based in Seoul, which is suing not just Samsung but also Apple over their fingerprint-unlock mechanisms. Firstface and its apparent director Jung Jae Lark both appear to be new to the world of US patent litigation. Against Apple last Friday, the firm asserted three patents, all of which name Jung as an inventor:

  • US 8,831,557 – “Method, system, and mobile communication terminal for performing specific function when mobile communication terminal is activated”
  • US 9,633,373 – “Activating display and performing additional function in mobile terminal with one-time user input”
  • US 9,779,419 – “Activating display and performing user authentication in mobile terminal with one-time user input”

One the same day, Firstface asserted just the ‘557 patent against Samsung Electronics.

The complaint against Samsung Electronics suggests that the Korean firm was presented with the opportunity to license or buy Firstface’s patent portfolio (which appears to be just in the single digits as far as USPTO-issued rights go) in early 2015. Going back to 2013, the complaint says, Firstface, which was then trading as Ideazzan, tried to enter into a “business arrangement” with the electronics giant.

Firstface says it made the same approach to sell or license the patents to Apple, also in 2015. The company was apparently not interested, although it has been known to buy patents from Korean sellers before, as reported on this blog yesterday.

What do these two fairly low-level cases from very different sources tell us?

First, the somewhat over-the-top claims made about the PACid case suggest that especially in Korea, the alarm over NPE activity in the United States has not entirely gone away, despite the headwinds faced by plaintiffs there for some years now. Yes, things might look a bit different from Samsung’s perch, as it remains one of the most frequently targeted defendants; but you can pretty much guarantee that the company’s top IP executives, some of the best in the business, are more concerned about litigation risk in China. Have South Korean policymakers got the message?

Second, Korean companies large and small are thinking more seriously about how to turn their IP rights into revenue streams. And norms around litigation between two Korean parties are not as strong as they may once have been. That may be in part due to an anti-conglomerate mood in the country. Here we have a Korean inventor who says he has spent five years trying to partner with Samsung without getting anywhere and saw his patent infringed anyway. It says a lot that the company is investing in what’s sure to be an uphill battle in US courts.

Next week, IAM hosts IPBC Korea, and represented on the programme will be individuals and firms that have done quite a lot to advance the view of patents as a business asset at the grassroots level in South Korea. We hope you can join us.

Jacob Schindler

Author | Asia-Pacific editor

[email protected]

Jacob Schindler