[Invest&Law] 'Korean Companies' Hunting Ground' Texas Courts Patent Holders Win Rate Over 80%... Korean Conglomerates as 'Prey'

Lawsuits Against Korean Companies Raised in the US
37% Filed at the Eastern District Court Over 5 Years
Growing Share of Wireless Communication Technology
Rapid Increase in Automobile Patent Lawsuits

Major Korean export companies such as Samsung Electronics, Hyundai Motor, LG, and SK have faced 783 patent infringement lawsuits (defendant cases) filed since 1997 in the U.S. Federal Eastern and Western District Courts of Texas, with 113 of these cases currently ongoing. Most of these cases were filed by NPEs (Non-Practicing Entities, patent assertion entities). The majority of these cases were brought in the U.S. Federal Eastern District Court of Texas.

In Korea, judges typically serve for an average of 2 to 3 years before transferring to other courts, but federal judges in the U.S. often serve at the same court for over 10 years, sometimes until retirement. Judge T. John Ward of the Eastern District of Texas served for 12 years, during which he expedited patent litigation and tended to rule favorably for patent holders. While patent holders’ win rates in other U.S. federal courts range from 60% to 70%, Judge Ward’s win rate reportedly exceeded 80%.

Following Judge Ward, Judge J. Rodney Gilstrap was appointed Chief Judge of the Eastern District in 2018 and has also been known to issue rulings favorable to patent holders. This is why NPEs choose the Eastern District of Texas as a ‘patent hunting ground’ against Korean export companies. According to the ‘IP Trend International Intellectual Property Dispute Annual Report’ published by the Korean Intellectual Property Office and the Korea Intellectual Property Protection Agency, out of 1,137 cases involving Korean companies in the U.S. over the past five years, 416 cases (36.6%) were filed in the Federal Eastern District of Texas.

Recently, the Western District of Texas has shown similar trends, with many patent infringement cases against major Korean companies also being concentrated there.

According to a comprehensive analysis by Law Times of patent lawsuits in the U.S. Federal Eastern and Western District Courts of Texas, Samsung Electronics currently has 87 ongoing patent infringement lawsuits as of the 14th in these courts. LG Electronics has 23 cases, and Hyundai Motor has 3. When broken down by court, these three companies have ▲99 cases in the Eastern District of Texas and ▲14 cases in the Western District of Texas.

Samsung Electronics is currently engaged in multiple lawsuits with major NPEs in the Eastern District of Texas. A representative NPE is Staton Techiya, known as the ‘Samsung sniper.’ In November 2021, Staton Techiya sued Samsung Electronics for infringing 10 patents, including technology related to Bixby (voice recognition platform). This company teamed up with Synergy IP, founded by former Samsung Electronics Vice President Ahn Seung-ho, but lost the lawsuit last month. Subsequently, in 2022 and 2023, Staton Techiya filed additional lawsuits against Samsung Electronics and Harman, all of which are currently in trial.

As wireless communication technology is increasingly integrated into automobiles, patent-related lawsuits in the automotive sector are also on the rise. In April last year, Hyundai and Kia Motors were jointly sued in six patent infringement cases filed by an NPE called Mel NavIP in the Eastern District of Texas. Mel NavIP claimed that the voice recognition function of the navigation system in the Genesis G80 infringed on its patents. Although Mel NavIP withdrew the lawsuits last month following a settlement with Hyundai and Kia, it is reported that the two companies spent a large sum on litigation costs and settlement fees.

Recently, Korean companies have begun to counterattack by filing counterclaims or patent invalidation trials against NPEs’ patent lawsuits. This reflects an intention to respond head-on rather than paying settlement fees to end disputes early amid indiscriminate attacks by NPEs.

On the 21st of last month, Samsung Electronics filed a counterclaim against Secure Wi-Fi in a patent infringement lawsuit. Earlier this year in January, Secure Wi-Fi had sued Samsung Electronics in the Federal Eastern District of Texas, alleging unauthorized use of patents in developing the Galaxy 23 series. The presiding judge in this case is Chief Judge Rodney Gilstrap, who also ruled against former Vice President Ahn and Staton Techiya; Samsung filed counterclaims in the case involving former Vice President Ahn as well.

LG Electronics, which is involved in patent litigation with domestic-based NPE Pantech Corporation in the Federal Eastern District of Texas, also filed a petition for patent invalidation against Pantech’s patents at the U.S. Patent Trial and Appeal Board (PTAB) last year.

Reporters Hong Yoon-ji, Lee Soon-gyu, Ahn Hyun, Lee Jin-young

※This article is based on content supplied by Law Times.