By Kim Yoo-chul
Korean technology giants Samsung Electronics and LG Electronics have found themselves entangled in messy patent disputes with their rivals in past months.
While LG appears to be coming away from its fight with Sony unscathed, Samsung continues to struggle to cope with Apple’s legal onslaught.
According to industry insiders, the Samsung-Apple conflict could lengthen should the companies fail to reach a cross-licensing arrangement, which LG has been pursuing with Sony.
Apple took legal action against Samsung earlier this year, accusing the Korean electronics maker of “slavishly” copying the look and feel of iPhones and iPads in its own smartphones and touch-screen tablets.
However, there is a possibility that the legal battle could be affected by the complicated relationship between the two companies.
Samsung’s dual strength in both finished products and parts makes it a chief rival of Apple in mobile devices but a partner in components like memory chips and liquid crystal displays (LCDs).
Samsung’s solid supply-chain management and advanced technologies in components have been crucial for Apple in pushing its iProducts with pace and purpose.
``The iPhone boom also benefits Samsung as the company is able to diversify its revenue sources while also enjoying bigger handset sales in an expanded smartphone market. It would also be difficult for Apple to sever business ties with Samsung completely when no other parts provider could provide such as large volume of quality chips and LCDs that quickly,” said the industry source.
``Samsung seems to want a cross-licensing deal with Apple, and due to the partnership over components, Apple will have to consider this.’’
LG and Sony have recently reached an agreement to form a cross-licensing deal to end a slew of legal issues between them.
Sony had accused LG of infringing on its smartphone patents and took the issue to the International Trade Commission (ITC) in the United States seeking an import ban.
LG responded with a countersuit that claimed Sony was infringing its Blu-ray patents on its immensely popular Playstation video game consoles.
This led to tens of thousands of new Playstations confiscated in the Netherlands under a temporary European Union import ban.
``This is why it would be important for Samsung to bring Apple back to the negotiating table. It could be said that Apple’s real target is not Samsung but Google, as Samsung is a leading vendor of smartphones powered by Google’s Android mobile operating system,” said another Korean industry source.
Apple has been expected to buy over $8 billion of parts such as LCDs, mobile application processors (APs) and flash memories from Samsung this year.
Samsung earlier said its chip-making plant in Texas was expanding output to match increased demand from global clients, which include Apple.
Sources close to the issue say Samsung’s legal team has been trying to resume talks with Apple for a settlement, although Samsung's public relations officials declined to confirm this.
Samsung’s lawyers already have their hands full in defending Apple’s fresh patent-infringement accusations filed in Europe.
A Dutch court is planning to decide whether to grant an injunction to temporarily halt the sales of the Korean firm’s smartphones and tablets in the Netherlands.
A German court had earlier ordered Samsung halt the sale of the Galaxy Tab in EU nations.
A successful defense in the Netherlands is crucial for Samsung as the country is the only EU nation that wasn’t affected by the German court’s decision.
``In business, all options are possible, but it’s still too early to talk about a cross-licensing agreement with Apple. And it’s hard to ignore that Samsung has looked quite passive in this legal battle compared to Apple,’’ said a Seoul-based lawyer.
``The LG-Sony case sets an example, but Samsung is in a weaker position than LG was. Samsung generates the largest part of its revenue from chips and LCDs, and it can’t afford to lose Apple as a client.
Separately, Apple lawyers in Seoul insisted that Samsung’s Galaxy S smartphone copied the iPhone and added it is still seeking a complete ban to the sale of the Galaxy S.