Samsung, Sony Sign Agreement to Share Patent Portfolios

December 14, 2004

Samsung, Sony Sign Agreement to Share Patent Portfolios
Samsung Electronics Co. Ltd. and Sony Corporation announced on Tuesday that they have signed a Cross-License Agreement, detailing mutual usage of patent portfolios owned by the two companies.

Over the past several decades, Samsung and Sony, have each built strong patent portfolios through vigorous R&D efforts on a wide range of electronic technologies, especially those related to digitalization and broadband network capability.

According to a press release by Sony, this announcement is the culmination of negotiations that have occurred between the two companies since December 2003. It is noteworthy that the two leading companies in the electronics industry will share patents across major product lines through a cross-license agreement.

The goal was to construct a mutually beneficial relationship whereby Samsung and Sony could use each other's patent portfolios to effectively keep pace with the fast and sophisticated advancement of digital technologies. This indicates a new patent relationship appropriate for the broadband/network era.

To enable greater business growth through efficient product development, the Agreement licenses those patents which are considered to be the basic technologies necessary for product development. They are associated with technologies, such as basic semiconductor technology and industry standard technologies.

On the other hand, to foster the uniqueness of each company, and healthy competition in the market, so called "Differentiation Technology Patents" and design rights are excluded from the Agreement.

Examples of "Differentiation Technology Patents" that are not licensed from Sony to Samsung, are those related to Digital Reality Creation (DRC), and PlayStation Architecture. Patents not licensed from Samsung to Sony are those related to Digital Natural Image Engine (DNIe), and Samsung's Home Networking Technology. Furthermore, the agreement does not apply to TFT-LCD and Organic Light Emitting Diode (OLED) display patents.

Both Sony and Samsung recognize that the Cross-License Agreement will reinforce their ability to provide better products and services to consumers worldwide, while at the same time, maintain each company's uniqueness and competitiveness.

The Cross License Agreement between Samsung and Sony includes the subsidiaries of both companies.