[‘Patent Judgment Emergency’ K-Semiconductor]③ The Entire Value Chain Is a Patent Minefield... "Preemptive Lawsuits Increase Chances of Success"

Semiconductor 'Patent War' Enters New Phase with Changing Patterns
"Overseas Companies Seek Monopoly Even on Small Consumables"
Seoul Semiconductor Sets Example with Proactive Victory
KIPO Expands Support Projects for Response Strategies

The semiconductor 'patent war' among global companies is unfolding in a new form, as recently demonstrated by a Supreme Court ruling. While the focus of patent disputes used to be on the similarity of core technologies or equipment, the current situation, which even scrutinizes consumables, has expanded the patent battlefield across the entire value chain. Industry voices are increasingly calling for thorough analysis and response. Research institutions and organizations are closely monitoring trends in advanced countries to find effective support measures.

According to the industry on the 12th, the Korea Intellectual Property Protection Agency, after investigating legal disputes faced by Korean companies such as the lawsuit between Lam Research and SMT, noted in a report written in June that "(recent disputes) suggest that overseas semiconductor companies are trying to monopolize the entire 'value chain,' including small consumables." This confirms the reality that patent offensives, which were previously limited to a single semiconductor product, have now expanded to the entire process of semiconductor manufacturing, i.e., the 'value chain.'

The Semiconductor Value Chain Is a Minefield

Generally, semiconductors can be broadly divided into three stages (design-production-packaging and testing), and when broken down further, can be segmented into more than 30 parts, according to industry insiders. Considering this, the number of potential points for disputes can reach hundreds. If laid out on a single map, it would be covered with a 'minefield' where explosions could occur at any time. Each lawsuit is becoming more detailed and sophisticated, making responses difficult. Legal disputes now involve not only design but also components, operating principles, and purposes. The patent war is undoubtedly a process that companies, which must constantly compete over new technologies in the semiconductor market, must overcome. However, recently, the intensity has increased due to the advent of the artificial intelligence (AI) era and the restructuring of supply chains following various U.S. sanctions against China, causing anxiety among Korean companies.

Patent Lawsuits Concentrated in Semiconductors

Looking across Korean companies in various industrial sectors, disputes are concentrated in semiconductors. According to the 'Patent Management Specialized Company (NPE) Litigation Statistics by Technology Field' received by Asia Economy from the Korean Intellectual Property Office, over the past five years, patent infringement lawsuits filed by NPEs against Korean companies overseas have been concentrated in the electrical and electronic fields, including semiconductors. NPEs are specialized companies entrusted by corporate clients to manage patents, protect them, and engage in disputes if necessary. Korean electrical and electronic companies have been sued 310 times from 2020 to August of this year. Compared to 4 cases in machinery and transportation, 35 in mechanical devices, and 1 in furniture and other businesses, the number is overwhelming. This year, as semiconductor technology has advanced and diversified, analysis suggests that disputes have become an inevitable process.

Considering the current market situation of semiconductors, which are evaluated to have already surpassed 'Moore's Law'?the principle that microchip performance doubles every two years?there is also a forecast that patent disputes surrounding semiconductors will exponentially increase in the future.

Korea Broadens Response Targets... "Self-Help Efforts Also Needed"

Experts advise vigilance against overseas technology leakage and proactive responses when disputes are suspected. The case of Seoul Semiconductor winning a lawsuit last month at the Unified Patent Court (UPC) in Europe against the German major retailer 'Expert Ecommerce' is regarded as exemplary. Seoul Semiconductor filed the lawsuit first, claiming that products sold by 'Expert Ecommerce' infringed on its technology for 'light extraction enhancement through light reflection and current dispersion,' and won. Notably, Seoul Semiconductor focused on the fact that the UPC is a court formed by the union of 18 European countries that issues a single integrated ruling instead of individual national judgments, and filed the complaint there. As a result, a single ruling from this court banned the sale of all patent-infringing products sold in eight European countries and mandated their recall and destruction. This saved enormous time and costs that would have been incurred if lawsuits had been filed separately in each country. The carefully observed situation and efficiently devised litigation strategy were credited for success. Since 2003, when patent lawsuits became active, Seoul Semiconductor holds the remarkable record of winning all approximately 100 lawsuits against foreign companies.

Starting this year, the Korean Intellectual Property Office has expanded the 'Patent Dispute Response Strategy Support Project,' which was previously targeted at small and medium-sized enterprises, to include universities and public research institutions. Through this project, the Patent Office provides customized response strategies according to the dispute situation for Korean companies expecting or experiencing patent disputes with overseas companies. If disputes are prolonged or similar disputes occur simultaneously, companies can receive financial support of about 200 million KRW annually for up to four times a year over three years. The application documents have also been simplified from the previous 10 types to 4 recently.