Samsung Threatens US Prosperity By Disregarding Intellectual-Property Rights

Once again Samsung has been ordered to pay Apple hundreds of millions of dollars for infringing that company's intellectual property. But early reaction from Samsung seems to suggest another appeal and yet another round in Apple's six-year-old lawsuit against the South Korean tech giant for infringing iPhone patents. But then, courtrooms are familiar venues for Samsung.

An article from Vanity Fair in 2014 tells us why: "According to various court records and people who have worked with Samsung, ignoring competitors' patents is not uncommon for the Korean company. And once it's caught, it launches into the same sort of tactics used in the Apple case: deny, delay, countersue, lose, delay some more, appeal, and then, when defeat is imminent, settle."

But there's more to this story than Samsung's being a sharp-elbowed competitor. Its practice of infringing patents and then using its vast resources to finance protracted, costly litigation is eroding the U.S. patent system. The notion of protecting intellectual property is rooted in the very foundation of our nation. As a result, inspired Americans invented much of what the world uses today: computers, semiconductors, software and miracle drugs. By attacking the process of invention and innovation, Samsung is bluntly threatening the seed corn of the American economy. By snuffing out inventiveness, it threatens America's greatest job-creating asset.

I know this from personal experience. A typical small inventive company, Pictos Technologies, was put out of business after Samsung aggressively infringed its intellectual property.

Pictos invented an inexpensive image sensor that could be used in countless applications such as mobile phones and automobile cameras, to name only two. This next-generation Image Sensor was a follow-on to my dozen or so image-sensing patents that helped launch the solid-state image-sensor business years earlier. The Pictos technology, developed after years of investment and design, was protected by a portfolio of patents obtained at substantial cost.

In 2014, Pictos sued Samsung in federal court, alleging that it had "willfully infringed" its intellectual property. After years of costly litigation, the case went to trial, where Pictos lawyers introduced evidence that proved Samsung began as a Pictos customer, secretly copied its engineering designs and production process, and replicated them in Korea. Using our technology and its sizable scale, it went on to dominate this sector of the world electronics market.

Following lengthy litigation, the jury ruled in our favor and awarded substantial damages. The judge then trebled the damages based on "evidence of (Samsung's) conduct at the time of the accused infringement." Please note: Samsung's behavior was so egregious that the judge tripled the jury determination of the infringement costs to us.

That was just the first round, though. The verdict can be overturned on appeal, which, of course, Samsung has filed.

By disregarding the intellectual-property rights of American companies, Samsung's strategy is to use scorched-earth legal tactics against anyone who challenges their practices.

Few small companies can stand up to this attack. The result: The U.S. loses many of the small companies that create jobs and drive our economy; it loses technologies that can change the world for the better; and, worst of all, the incentive to create and patent new inventions.

What can be done?

U.S.-South Korean trade talks have been put on hold until after the summit meeting with North Korea. The delay creates an opportunity for the U.S. to tell South Korea that Samsung's unprincipled conduct threatens the economic prosperity of its chief ally, the United States of America.

Now is the time to stop these practices.

Dr. Amelio is a leading Silicon Valley executive and inventor. He served as CEO of Apple and National Semiconductor and as president of Rockwell Communications Systems. He's been on the boards of numerous companies, including AT&T, InterDigital, Galectin Therapeutics and Sienna Ventures.