[Editorial] Conglomerates Stealing Venture Technology

The Intellectual Property Tribunal has sided with the venture company Shubur in its case against Samsung Electronics accusing it of steeling its patent. It is a precious victory by a small venture company against a dinosaur-sized conglomerate, and it gives hope to many medium sized companies that have suffered all alone while being unable to fight conglomerate coercion.

In 1999 Shubur started supplying Samsung Electronics with mobile phone parts that it had developed, but then in 2001 it suddenly received notice that Samsung would no longer be buying. What had happened was that Samsung Electro-Mechanics, a fellow Samsung subsidiary, got a patent for something similar to what Shubur had been supplying and then that Samsung subsidiary started supplying the parts instead. When a promising venture company has its market blocked of a sudden it goes bankrupt. Shubur's demands for the situation to be corrected were not listened to, so it sued and now four years of dispute later it has won this judgment. There's no knowing when the whole episode will actually end, since Samsung Electro-Mechanics says it will appeal.

Industry insiders say that when most mid-sized companies feel wronged they can't even think of standing up to fight conglomerates. They put up with it because they could be greatly disadvantaged after offending a conglomerate. It is also hard for them to put up a long legal fight since those cases take years and they lack the financial resources.

There are increasing calls for coexistence and cooperation as the gap between conglomerates and mid-sized companies continues to grow. True mutual prosperity will impossible as long as mid-sized companies are going to have their determination to engage in technological hurt like what happened in this case. The best thing that could happen would be for the conglomerates to establish a gentleman's agreement to protect the technology of mid-sized companies. If the conglomerates do not do so voluntarily then the government will have to take action. If necessary, there can be a process of selecting patents belonging to mid-sized companies through review, and then have the government actively guarantee their protection. Mid-sized companies must not have their hard-earned technology taken away from them any longer.

The Hankyoreh, 13 October 2005.

[Translations by Seoul Selection (PMS)]