Samsung Fined $400M in FinFET Patent Dispute

Samsung has been found guilty of patent infringement and ordered to pay a $400M fine to a South Korean university. Two other companies, GlobalFoundries and Qualcomm, were also found guilty, but Samsung is the only firm required to pay damages. Samsung was judged to have infringed on a patent belonging to the Korea Advanced Institute of Science and Technology (KAIST).

If you’ve ever wanted to see just how much fun patent judges have, you can peruse the lawsuit in question and treat yourself to an argument over the precise definition of the word “trapezoidal” and how that word should be read to apply to transistor structures, and whether those structures are covered by the patent in question.

At its heart, the lawsuit is over a key patent tied to FinFETs — the three-dimensional transistor structures that replaced conventional bulk silicon beginning in 2012, when Intel launched its 22nm “Tri-Gate” FinFETs. But, as we’ve discussed before, every technology that makes a sudden and dramatic debut is actually the result of long periods of work and FinFETs are no exception. Early work on FinFETs was a partnership between KAIST and Wonkwang University. KAIST applied for a domestic patent in 2001, eventually extending that patent into an international version through its partnership with one of the key engineers that worked on the technology, Lee Jong-ho.

In 2012, when Intel unveiled its Tri-Gate transistors, KAIST apparently contacted the CPU manufacturer and negotiated a patent license agreement. Intel has paid over $9M to KAIST since it introduced FinFET technology. Negotiations with Samsung for a patent fell through, however, and the Korean electronics company has been building FinFET devices without one since it introduced the technology in 2015. Meanwhile, Samsung attempted to invalidate Lee’s patent in the United States. When that failed, it attempted to prove that the patent should actually belong to a different institution altogether, arguing that the IP in question should belong to Kyungpook National University rather than to KAIST. This effort has also failed.

In a statement, Samsung said: “The FinFet technology we are using is our own technology developed by our employees and executives through studies. This is different from the FinFet technology on which KIP US claims to have patent rights.” The company declined, however, to state exactly how its technology is different from KAIST’s. Based on the judge’s reading of the patent and Samsung’s attempts to redefine the various terms of art, it’s clear the courts aren’t buying this distinction — and it’s not at all clear they should.

As for why Samsung is getting slugged with a massive fine while GlobalFoundries and Qualcomm aren’t, we can hazard a guess as to why. In the first case, GlobalFoundries paid Samsung for a license to use its technology, but may not have been aware of the patent liability or could potentially have been indemnified, given that it didn’t develop Samsung’s technology in-house. Qualcomm, meanwhile, is merely a Samsung customer, rather than the company that chose to infringe on the university’s patent rights.

Because Samsung’s infringement was found to be willful, the judge could theoretically increase the penalty up to 3x above and beyond the jury’s findings. Samsung could find itself on the hook for $1.2B in damages before all is said and done, though the company has stated it will appeal the verdict.

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