Samsung Fights Back Against Beijing’s Tech Theft, Sues Chinese Firm BOE Over Patent Infringement

The South Korean company skips Shanghai’s Mobile World Congress for first time in 6 years

A woman walks past a new flagship store of Samsung Electronics at the Gangnam district in Seoul on June 28, 2023. Jung Yeon-je / AFP via Getty Images

Amid escalating tension between South Korea and China, Samsung has drawn attention by pulling out of the Shanghai Mobile World Congress for the first time in six years and initiating its maiden patent lawsuit against Chinese company BOE. The moves come in the wake of repeated allegations of technology theft by China against Samsung’s technology.

Samsung Display took a decisive step on June 26, instigating a patent infringement lawsuit against BOE Technology Group Co., Ltd. (BOE), China’s premier display company. The lawsuit, filed in the Eastern District Court of Texas, asserts that BOE had unlawfully appropriated four of Samsung’s patented organic light-emitting diode (OLED) display technologies that it uses in the iPhone 12.

This legal action marks Samsung’s first patent lawsuit against BOE after it repeated warnings against unauthorized appropriation of Samsung’s technology.

BOE is a public company with its headquarters in Beijing’s Yizhuang Economic and Technological Development Zone, and its business empire spans displays, sensors, smart systems, and health services.

In the lawsuit, Samsung Display articulated its grievance, stating that BOE has infringed upon the company’s patent rights by selling panels identical to those that Samsung Display has utilized for the iPhone 12 in the U.S. market.

This litigation extends the ongoing legal feud between Samsung Display and BOE that surfaced last year.

In May 2022, Samsung Display issued a notice of patent infringement to BOE, followed by a complaint with the International Trade Commission (ITC) against 17 U.S. component wholesalers in December of that same year.

Samsung sought to ban the use of counterfeit components and display panels allegedly based on its sophisticated OLED patents, including one on its “Diamond Pixel” technology.

The move was triggered by U.S. smartphone repair shops using both genuine Samsung Display panels and counterfeit Chinese products when replacing iPhone 12 OLED display panels. It requested the U.S. tribunal ban 17 U.S. smartphone parts wholesalers from importing such parts and panels that allegedly use its patented technology into the United States.

Confronted with this unfavorable situation, BOE retaliated in May this year by filing a counterclaim against Samsung Display’s and Samsung Electronics’ Chinese legal entity. The lawsuit, filed with a court in Chongqing, China, accused Samsung Display of plagiarizing its OLED display panel technology.

South Korean public opinion suggests that Samsung Display, having grown weary of the CCP’s alleged acts of thievery, decided to retaliate with a countersuit.

A woman looks at accessories of the Samsung Galaxy Z Flip4 displayed on a wall during a media preview event for a new flagship store of Samsung Electronics at the Gangnam district in Seoul on June 28, 2023. Jung Yeon-je/AFP via Getty Images

Grappling With Significant Losses Due to China’s Brazen Technology Theft

Beijing’s alleged global technology theft operation wreaks havoc worldwide, with South Korea, an electronics industry powerhouse, bearing the brunt of its onslaught. Samsung Electronics, a global leader in semiconductors and OLED display panels, struggles to protect its technology.

A recent large-scale technology theft by Beijing, revealed to be of significant detriment to South Korea, exemplifies the severity of the situation.

In mid-June, South Korea’s Suwon District Prosecutor’s Office filed a lawsuit against a former Samsung Electronics executive surnamed Choi for allegedly stealing design data from a Samsung Electronics semiconductor factory and attempting to build a replica factory in China.

Choi, 65, a South Korean tech industry veteran, reportedly received approximately $360 million from the Chengdu government to establish a semiconductor company in China, recruiting over 200 key personnel from Samsung Electronics and SK Hynix.

Choi was once lauded with titles for his innovation, hands-on approach, and round-the-clock dedication. However, this time, the government that honored him as a national tech hero is accusing him of industrial espionage on a grand scale.

Prosecutors described the defendant in a statement as an “undisputed top domestic expert in semiconductor manufacturing.”

“The data, which Samsung Electronics obtained through more than 30 years of research and development, is worth 300 billion to trillions of won (about $200 million to billions). It is not only a company’s trade secret but also a national core technology,” prosecutors said.

According to South Korea’s National Intelligence Service, the estimated scale of loss due to overseas leaks of industrial technology revealed from 2018 to 2022 is approximately 25 trillion won ($19.6 billion).

In another high-profile incident in 2018, the Suwon District Prosecutor’s Office filed a lawsuit against 11 employees of Samsung supplier Toptec for allegedly setting up shell companies to sell Samsung’s OLED folding screen technology to four Chinese companies, including BOE. The technology was said to have been the culmination of six years of research by Samsung with an investment of more than 150 billion won ($130 million).

According to a 2021 Nikkei Aisa report, the Chinese panel maker BOE had around 120 South Koreans working at its plants and laboratories, including over 50 former Samsung engineers leading the development of OLED panels for Apple. BOE reportedly gained many Samsung engineers between 2015 and 2016, when the South Korean firm suffered poor earnings.

Reports submitted by the National Intelligence Service (NIS) to the National Assembly indicate that, over the preceding five years until 2019, 67 percent of the technology leaks intercepted by South Korea were traced back to China, with many involving semiconductors, displays, shipbuilding, and other advantageous sectors of South Korean enterprises, Global Biz reported.

Boycotting Shanghai’s Mobile World Congress

As Samsung Display files a patent infringement lawsuit against BOE in the United States, the Chinese regime is hosting the World Mobile Communications Exhibition in Shanghai (MWC Shanghai 2023). Despite coinciding with the event’s 10th anniversary from June 28 to 30, several prominent multinational companies, including Samsung, Nokia, Ericsson, Qualcomm, and Intel, have abstained from participating.

The South China Morning Post reported that Samsung, a regular participant since 2017, refrained from participating this year for unknown reasons. Interestingly, Samsung maintained a booth at the Shanghai MWC exhibition in 2021 amid the COVID-19 pandemic. Earlier this year, Samsung was a key exhibitor and sponsor at MWC Barcelona, the world’s largest mobile industry trade show.

Li Yuanhua, a China expert and former associate professor of history education at Beijing’s Capital Normal University, told The Epoch Times on July 3 that Samsung’s abstention from MWC Shanghai 2023, an event organized by Beijing, is likely a direct response to BOE’s alleged technology theft.

“Samsung’s chips and displays used to be exported to China in large quantities, but Beijing stole its technology, started producing them domestically, and ceased importing them, directly hurting Samsung’s revenue,” Li said. “Samsung’s lawsuit against BOE indicates a shift in tolerance towards such practices.”

Kane Zhang contributed to this report.