PACid Technologies, which is an American data security technology research firm, filed a $2.82 billion (3 trillion KRW) patent lawsuit against Samsung Electronics at Texas Eastern District Court. This lawsuit is the biggest ever in history.
PACid claimed that Samsung Electronics infringed two of its patents and one of its South Korean patents for all of its biometric (fingerprint, iris, face) technologies that were applied to its Smartphones. Relevant models are entire models ranging from Galaxy S6 to Galaxy S8. This is PACid’s first patent lawsuit against a Smartphone manufacturer related to biometrics and it is targeting Samsung Electronics and Samsung Electronics America.
According to PACid’s petition obtained by The Electronic Times, PACid claimed that Samsung Electronics’ biometric technologies infringed its patents (U.S. Patent No. 9,577,993, No. 9,876,771) on ‘System and Method for Authentication of a User’ and its South Korean patent (KR20110128567A).
Not only did PACid claimed that Samsung Electronics’ biometric technologies infringed its patents, but it also claimed that Samsung Electronics’ biometrics operating system (OS) called Samsung PASS and Samsung’s KNOX OS also infringed its patents.
Although it did not specify the amount of compensation for damage, it is heard that it will claim an amount compared to global sales volumes of Galaxy S6, S6 Edge, S7, S7 Edge, S8, and S8 Edge just like how Apple filed a patent lawsuit against Samsung Electronics in the past.
PACid claimed that Samsung Electronics knew about the information of its patents at least since January of 2017. If this claim is accepted by Texas Eastern District Court, PACid said that Samsung Electronics needs to be imposed with an amount of compensation that is equivalent to at most three times increase per Smartphone based on 35 U.S. Code § 284. This indicates that Samsung Electronics needs to be imposed $3 per Smartphone rather than $1 per Smartphone. Based on 35 U.S. Code § 284, minimum amount of claim will be at least $2.82 billion (3 trillion KRW).
35 U.S. Code § 284 has a punitive damage article for companies that do not take necessary measures even when executives of companies are officially notified of infringement of patents.
Legal industries and security experts brought up a possibility that PACid may be a patent troll that looks for astronomical amount of compensation for damages by purchasing similar patents even when it is professing to be a data security technology research firm. Although they actually traced business activities and PACid’s homepage, they could not find any details regarding their activities.
There is a high chance PACid targeted Samsung Electronics, which is participating as a board member of FIDO, as biometric market has started to expand.
There is also a high chance that PACid will target other global businesses that are part of FIDO alliance depending on court decisions in the future. Because PACid specified that Samsung Electronics’ biometric services are linked to PayPal, it brought up a possibility that it will carry out large-scale patent lawsuits on other surrounding global partners as well.
Because FIDO is operated based on group standards instead of international standards, it is practically impossible for FIDO alliance to take legal measures. This is the reason why it is expected that PACid will start to file patent lawsuits related to biometrics on other global businesses as well such as LG Electronics, Google, and Amazon that are part of FIDO alliance.
“We just became aware of this issue after PACid’s petition was received by Texas Eastern District Court on the 6th of April.” said a representative for Samsung Electronics. “We are planning to look for countermeasures after going over claims made by PACid.” This representative also said that Samsung Electronics is going to appoint an American law firm since this lawsuit is filed against Samsung Electronics and Samsung Electronics America and that it is considering taking legal measures.
Staff Reporter Gil, Jaeshik | pioneer@etnews.com