By Min-Jeong Lee and Jonathan Cheng
SEOUL-- Samsung Electronics Co. and Google Inc. signed a broad
cross-licensing deal on technology patents, strengthening an
existing alliance as they try to fend off stiff competition in the
market from rivals such as Apple Inc.
Samsung and Google, which are closely allied as the primary
backers of the dominant Android mobile operating system, declined
to disclose financial terms of the deal, which covers the two
companies' existing patents, as well as those filed over the next
10 years. However, the agreement doesn't transfer ownership of
patents and as a consequence won't allow Samsung to use Google's
patents to defend itself in litigation with other companies such as
Apple.
Samsung and Google also didn't specify whether the scope of the
deal was limited to Android, which currently powers about four of
every five smartphones sold globally.
The companies said that the agreement paves the way for deeper
collaboration between Samsung and Google on research and
development of current and future products.
Allen Lo, Google's deputy general counsel for patents, said in a
statement that by working together in such a fashion, "companies
can reduce the potential for litigation and focus on
innovation."
The deal comes amid patent litigation between Apple and Samsung,
the world's biggest smartphone maker by shipments, whose
best-selling devices run Google's Android platform.
Apple has accused the South Korean company of allegedly copying
the design and feel of its iPhones and iPads, in a case that dates
back to 2011.
The two technology giants have been asked by a court in
California to hold negotiations to try to settle their legal
dispute before a new case is set to go to trial in March.
The latest litigation involves some of Samsung's newer
smartphones, including the Galaxy S III. Last year, a federal jury
in California ruled that Samsung violated some of Apple's patents
and awarded the Cupertino, Calif.-based company damages of nearly
$1 billion.
"Samsung and Google own a lot of patents, but they haven't been
able to gain much leverage from those patents against Apple,
Microsoft and others," Florian Mueller, an intellectual-property
consultant in Germany who specializes in software patents, wrote on
his blog.
Samsung declined to comment further beyond the joint statement.
Apple wasn't immediately available for comment.
In a separate development, Samsung and Sweden's Ericsson AB on
Monday said they reached a multiyear agreement on global patent
licenses. Ericsson will collect a royalty from Samsung and book an
additional $650 million in the fourth quarter due to an initial
payment from Samsung.
The companies didn't disclose details on the cross-licensing
agreement, which covers patents on cellular technologies.
Both sides said the deal puts an end to complaints that each
company brought against the other with the U.S. International Trade
Commission, under which Ericsson attempted to bar U.S. imports of
Samsung products. The agreement also ends ongoing lawsuits in a
Texas federal court.
"We have always preferred negotiations over litigation," Samsung
said in a statement.
The cross-licensing deal between Google and Samsung also reduces
the likelihood that the two companies would face each other in
future court battles over intellectual property.
The cross-licensing deal also reduces the likelihood that Google
and Samsung might face each other in future court battles over
intellectual property. Samsung and Google have already been
cooperating closely on mobile devices, with the South Korean
company the dominant maker of smartphones running Android.
Even so, Google has become more of a direct competitor since it
purchased Motorola Mobility in 2012 and started making its own
handsets. And the fast pace of technology shifts could alter the
landscape dramatically over the course of the 10-year life of the
agreement.
Still, deeper cooperation on future product development between
Samsung and Google could also give the South Korean tech giant a
boost with development of technologies such as wearable devices,
one analyst said.
Samsung's smartwatch, dubbed the Galaxy Gear, was released last
year to great fanfare, but failed to impress many in the tech
world. But Samsung says it sees the category as a potentially
lucrative channel for future product development.
"This may help Samsung in the developing of wearable devices,
which Google currently has an edge in with its Google Glass
product," said James Song, an analyst with KDB Daewoo
Securities.
The cooperation agreement between Samsung and Google is the
latest in a complex mosaic of alliances in a global patent dispute
among the various players in the smartphone industry.
Last October, a consortium of tech rivals, including Apple,
Microsoft, BlackBerry Ltd., Ericsson and Sony Corp., filed lawsuits
in a federal court in Texas, accusing Google, Samsung and other
manufacturers of Android devices of infringing on patents that the
alliance had purchased from the bankrupt Canadian telecoms company
Nortel Networks Corp.
In November, Samsung also extended a broad licensing deal with
Finland's Nokia Corp. through 2018, allowing Samsung to continue to
use Nokia's patents and lessening the likelihood of lawsuits
between the two companies. The deal, which had been set to expire
last year, came after Microsoft said it would acquire Nokia's
handset business.
Separately, Samsung is also involved in a dispute with Ericsson.
The Swedish mobile-network company filed suit against Samsung in
2012 alleging patent infringement. Ericsson also turned to the U.S.
International Trade Commission to bar U.S. imports of Samsung
products. The commission is expected to issue a ruling early this
year.
Samsung received 4,676 U.S. patents in 2013, the second most of
any company in 2013, according to data from IFI Claims Patent
Services, the patent-research division of Madison, Conn.-based
Fairview Research LLC.
International Business Machines Corp. received 6,809 U.S.
patents, while 11th-place Google received 1,851 patents.
Rolfe Winkler in San Francisco and Sven Grundberg in Stockholm
contributed to this article.
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