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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korean prosecutors have indicted a former Samsung Electronics engineer and executives of a patent assertion entity (PAE), also known as a non-practicing entity (NPE), over allegations that confidential company patent information was leaked in exchange for illicit payments.
According to the Seoul Central District Prosecutors’ Office, the case centers on a senior engineer, identified only as A, who previously oversaw intellectual property management at Samsung Electronics. A was arrested and indicted on charges of accepting a $1 million kickback from the NPE in return for providing confidential internal materials.
Investigators said the NPE sought to profit by collecting licensing fees from companies using patented technologies. In this case, the firm allegedly approached Samsung to negotiate a patent licensing agreement and later claimed that the company had infringed on its patents.
When such claims arise, Samsung typically prepares internal analyses and response materials to evaluate potential infringement and legal strategies. Prosecutors say those confidential documents were secretly passed to the NPE, giving the firm an inside view of Samsung’s legal and technical assessments.
Prosecutors compared the situation to “knowing an opponent’s cards in a poker game.”
“Samsung faces patent lawsuits from NPEs in the United States roughly once every four days,” said Park Kyung-taek, head of the Information Technology Crime Investigation Division at the Seoul Central District Prosecutors’ Office. “Domestic companies are forced to spend enormous resources not on research and development but on litigation costs and settlement payments to deal with these patent entities.”
Authorities said the NPE used the leaked information to gain leverage in negotiations with Samsung, ultimately securing a contract worth about $30 million.
Another Samsung employee, identified as B, was also indicted for allegedly providing confidential information to A despite knowing it could be leaked externally. Prosecutors said B even advised A via an internal company messenger to demand up to $5 million from the NPE, describing the information as a “valuable source,” and offered guidance on the amount the firm should propose to Samsung during negotiations.
Prosecutors warned that attacks by NPEs targeting South Korean companies have been increasing every year and described the case as particularly serious.
“If such illegal activities by NPEs are not addressed properly, Korea’s key industries such as semiconductors, IT, and batteries could fall behind in global technology competition,” Park said.
The NPE involved in the case has denied the allegations, claiming it never used the leaked confidential materials during negotiations with Samsung.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
