By Kim Yoo-chul
Staff Reporter
Korea's top flat-screen panels and memory chip makers have lately been beset by a series of litigation troubles.
Samsung Electronics and LG Display are the targets of foreign rivals in key markets over patents, while Hynix Semiconductor is trying to fight off legal complaints from U.S. chip designer Rambus.
Samsung is the world's biggest producer of LCD panels and computer memory chips, followed by LG Display. Hynix, meanwhile, is No. 2 to Samsung in the global DRAM chip sector.
"Such legal affairs are costly. The worst-case scenario is that an involved company will lose its market share with damage made to their corporate image," said Kim Gee-soo, an analyst at Goodmorning Shinhan Securities.
"Some foreign companies were making 'all-out' efforts to attack Korean companies with unconfirmed patent-related claims in a scheme to get higher royalties amid the global downturn," an industry source told The Korea Times.
The remarks come after Sharp, Japan's largest maker of LCD panels, won a legal battle to stop U.S. imports of Samsung Electronics products.
The U.S. International Trade Commission ruled that Samsung infringed four Sharp patents and recommended that the agency ban the import of Samsung's LCD televisions, computer monitors and professional displays.
The two sides have been fighting in both the United States and Japan over patented technology for the displays.
In March, Sharp appealed to Japan's Intellectual Property High Court against the ruling that it infringed a Samsung patent.
The attack by the Japanese company comes as it suffers from its deteriorating cash reserves, hit by the global downturn.
Sharp reported a loss for its third fiscal quarter, and even warned investors it was headed for its first-ever annual operating loss.
The company was forced to pay for its role in a price-fixing scandal that also nailed LG Display and China's Chunghwa late last year.
Referring to the judgment in the United States, Samsung spokesman Kim Choon-gon said, "The latest ruling is preliminary. Samsung will proceed a next step upon the further situations."
Samsung executives say the Suwon, Gyeonggi-Province-based technology giant has doubled its number of patent experts to 550 from three years ago.
To actively defend increasing patents woes, Samsung hired former Trade Minister Kim Hyun-chong as chief legal officer.
LG Electronics is also strengthening the capability of its legal office to respond to litigation troubles, according to a company spokesman.
In a similar case, Hynix Semiconductor clarified it will appeal a recent U.S. ruling that the Icheon, Gyeonggi Province-based company must pay Rambus damages, interest and royalties for patent infringement based on the former's U.S. memory chip sales.
Shares in the California-based company rose 9 percent Monday, as investors believe an anti-trust probe will go ahead as scheduled.
Rambus accused Samsung Electronics, Hynix and Micron Technology of the United States of illegally fixing prices, hurting the sale of its DRAM chips.
It reported a 31.2-percent decrease in its first quarter sales year-on-year in the wake of lower royalties caused by the expiration of Japan's Elpida patent license agreement at the end of the first quarter of last year.