By Cho Jin-seo
Staff Reporter
Samsung Electronics has set an ambitious goal of ending IBM's 14-year dominance as the United States' top patent holder within two or three years, its patent manager said.
The versatile electronics maker was the closest rival to IBM last year, receiving 2,453 U.S. patents against IBM's 3,651. And it won't take too long to take IBM down from the throne, said Lee Dong-geun, general manager of Samsung's intellectual property strategy group.
``We will soon be competing with IBM for the top place. In two or three years, we will produce more patents than IBM,'' Lee said in a recent meeting with reporters in Seoul.
Samsung placed 11th in the 2002 rankings, but since then it has surged to sixth in 2004 and fifth in 2005. The reason behind such rapid growth is the firm's active patent management policies. According to Lee, Samsung has some 400 employees specializing in the patent management business and one-fifth of them are lawyers or certified patent attorneys. It also guarantees incentives of up to $300,000 to engineers who produce patents, he said.
The number of U.S. patents is one of the most frequently used indicators of a firm's technological competence. Computer maker and technology service firm IBM has long been the most prolific patent generator. The next five players after IBM and Samsung were all electronics and optics firms _ Canon, Matsushita, Hewlett-Packard, Intel and Sony.
Patents can be a lucrative source of revenue for technology companies as they can license the intellectual property to others. But Samsung is still far from making a net profit out of the patent business as it is relatively a newcomer in the field, Lee said. It was in 1984 that Samsung first received a patent in the United States.
``We still pay more royalties than what we receive. I think we will be able to break-even around 2015,'' he said, adding that a single laptop PC, for example, is built on more than 1,000 patents that needed to be paid royalties.
For Samsung, the most lucrative patent ever produced was a video transmission protocol called MPEG-2, which is used in DVD players, digital TVs and other video players. As a member of the MPEG licensing team, Samsung collects several dozen billions of won every year in royalties, he said.