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Subject : ETRI Questioned Over Patent Management in US   
Date 2010-02-26 Visit 5385

The state-run Electronics and Telecommunications Research Institute (ETRI) boasts that its wireless technologies are becoming increasingly essential for consumer electronics products and mobile phones.

And the agency doesn't seem to mind using an aggressive patent move in the United States against industry heavyweights Apple, Hewlett-Packard (HP), Nokia and Motorola over alleged intellectual property infringement as another opportunity to tout its innovative achievements.

The problem is, however, that ETRI won't be getting the first cut of compensation even should the claims prevail in court as it won't even get listed as a plaintiff.

The series of complaints, which have been filed since 2008 against 23 manufacturers of mobile computing devices and mobile phones, a list that also includes Sony, Panasonic, HTC and Acer, covers seven patents that ETRI claims are fundamental to wideband code division multiple access (WCDMA) technologies.

The patents are related to technologies reducing power consumption in WCDMA-enabled devices, which are designed to handle more data and multimedia features than conventional products, ETRI said.

ETRI officials have been telling journalists here that success in the legal action will allow the agency to reap up to 300 billion won (about $267 million) in royalties.

Two of the companies have already agreed to pay a combined 20 billion won in compensation in exchange for dropping the suit, ETRI said, and some media reports identify them as Apple and HTC.

There is also a possibility that the legal action could be expanded to Korean electronics giants such as Samsung Electronics and LG Electronics, ETRI officials said.

However, ETRI appears to have exaggerated its claims about the possible royalty binge, as court papers filed in the state of Virginia confirm that the agency holds no significant rights over its patents obtained in the U.S.

ETRI has been granted exclusive rights to SPH America, a Virginia-based holding company, to commercially exercise patented technologies and sue for past, current or future infringements.

A suit filed against Apple, HP, Nokia, Sony and others on July 6 states SPH America as the lone plaintiff and that ETRI retains ``no substantial right in the asserted patents.'' SPH America was established in 2007 by Park Choong-soo, a former patent examiner with the Korean Intellectual Property Office (KIPO).

So at least on paper, ETRI is not in a position to receive compensation from the All-Star list of high-tech defendants, and whether it gets a share from the results of the legal proceedings will depend on the conditions of its contract with SPH America.

``Technically, ETRI is not in a position to get a penny directly from the dependents,'' said Kim Soon-woong, a Seoul-based patent lawyer.

``Whether or not ETRI cashes in from the lawsuits depends on its contract with SPH America. The two may have agreed that the earnings from lawsuits should count as revenue from exercising the license, in which case ETRI gets a cut, or they may have not.''

An ETRI official claimed that SPH America merely acts as the agency's legal representative in the U.S., and said the agency has an agreement with the company regarding the sharing of earnings obtained from patent suits.

``We aren't ready to discuss who will be getting how much of a share,'' said an official from the Daejeon-based research institute.

Despite ETRI's explanation, some industry watchers wonder whether the agency has been loosely managing its intellectual property overseas, questioning its decision to grant SPH America exclusive rights to commercialize its innovations when it cost millions of dollars in Korean taxpayer money to develop them.

``The truth about state-run technology organizations in the past years was that many of them were pressured so much to generate early commercial returns that they hastened their negotiations with foreign partners and ended up selling themselves short,'' said an industry official, who didn't want to be named.

``I don't know if this is the case between ETRI and SPH America, but it bears to be seen whether ETRI will manage to get the proper value in return for its innovative achievements.''



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