Samsung supplier being accused of leaking OLED edge panels tech to China

[BananaInSandals]

(Apologies for news being a few days old. Just saw a friend sharing it on FB.)

 

TL;DR: Samsung supplier leaked the curved-edge OLED technology to Chinese companies, which may includes one that supplies smartphone screens to Huawei.

 

Source:

ZDNet

Nikkei Asian Review

(Chinese) 聯合新聞網

 

From ZDNet:

Quote

The Suwon Prosecutor's Office indicted 11 people who worked at a company that allegedly produced automated equipment to create mobile panels for leaking Samsung Display's technology on 3D Lamination in OLED edge panels. Three out of the 11, including the company's CEO, have been arrested and are awaiting trial.

 

The group allegedly formed a separate shell company that received information of the use equipment and drawings of the panels, which they accessed from working with Samsung. They then sold the documents in China, earning 15.5 billion won ($13.8 million).

 

The leaked technology created by Samsung Display required six years to develop, a team of 38 engineers, and investment of 150 billion won, the prosecutors said. It was designated as a national core technology protected under South Korea's industrial technology protection laws.

 

From Nikkei Asian Review:

Quote

The Suwon District Prosecutors' Office indicted 11 suspects, including the president and managing director of South Korean supplier Toptec and a vice president of a Toptec affiliate.

 

They are accused of passing on Samsung technologies related to curved-edge smartphone panels that use organic light-emitting diodes, or OLED, to four companies.

 

The prosecutors did not reveal the names of the recipients, but an industry source who requested anonymity identified one of the companies as BOE Technology Group, which supplies smartphone screens for key Samsung rival Huawei Technologies.

 

The indictments come as Samsung competes with Huawei to launch the world's first foldable smartphone, using a flexible OLED display. Samsung unveiled its demo model this month at a conference in San Francisco, aiming to mass-produce foldable smartphones in the coming months.

 

"We are shocked to see the announcement of the prosecutors as our rivals are aggressively chasing us in technology," Samsung Display said in a statement. The company pledged to monitor the trial and its outcome.

Personal thoughts:

On one hand, this is really bad from an intellectual properties stand point. On the other hand, with the tech on Chinese companies' hands, they're going to poop out a boat load of curved monitor phones, which will drive down the price. I'm not even sure what to think about this atm... Imagine a Xiaomi or Huawei curved phone for $199 in 2019... 

[Dabombinable]

1 minute ago, BananaInSandals said:

(Apologies for news being a few days old. Just saw a friend sharing it on FB.)

 

TL;DR: Samsung supplier leaked the curved-edge OLED technology to Chinese companies, which may includes one that supplies smartphone screens to Huawei.

 

Source:

ZDNet

Nikkei Asian Review

(Chinese) 聯合新聞網

 

From ZDNet:

 

From Nikkei Asian Review:

Personal thoughts:

On one hand, this is really bad from an intellectual properties stand point. On the other hand, with the tech on Chinese companies' hands, they're going to poop out a boat load of curved monitor phones, which will drive down the price. I'm not even sure what to think about this atm... Imagine a Xiaomi or Huawei curved phone for $199 in 2019... 

Remember: Chinese tech quality rarely surpasses "good enough". So any Oled panels from them probably won't last long.

[BananaInSandals]

8 minutes ago, Dabombinable said:

Remember: Chinese tech quality rarely surpasses "good enough". So any Oled panels from them probably won't last long.

Their selling point is super low price tbh. They make it so it's cheap af and you can change your phone down the line in a year or two without paying more than buying a flagship phone from the big companies. One third of the price for half the life time. Good enough is often, well, good enough. 

[D13H4RD]

That's probably why the Mate20 Pro gets its displays from 2 suppliers; LG and BOE.

 

The latter is the desirable one because the former is falling victim to severe green tint 

[Soppro]

Damn, I feel bad for Samsung putting in so much effort developing this screen technology and seeing it being so easily stolen. It’s not surprising that their IP is being targeted, especially by Chinese companies, but it sucks nonetheless ...

[dalekphalm]

2 hours ago, BananaInSandals said:

Personal thoughts:

On one hand, this is really bad from an intellectual properties stand point. On the other hand, with the tech on Chinese companies' hands, they're going to poop out a boat load of curved monitor phones, which will drive down the price. I'm not even sure what to think about this atm... Imagine a Xiaomi or Huawei curved phone for $199 in 2019... 

You have to remember why things like patents exist.

 

Samsung spent $150bn Won ($133m USD) for research and development to develop the curved tech. They now have to recoup that investment. By having an exclusive patent, they are able to charge higher prices, which lead to them being able to repay that investment.

 

Now, China comes in, steals the tech (technically the supplier stole the tech. China just bought stolen tech, they didn't steal it themselves), and starts producing it for pennies on the dollar. China paid $15bn Won ($13m USD) for their "investment". So their ROI is much smaller, meaning they can sell for much cheaper.

 

This is basically bad for everyone, including consumers.

 

Why? Because if companies can't rely on recouping their investment, because their competitor is just going to steal the product and make it without having to worry about repaying investment, it'll basically make it financially unsustainable to invest in new technologies.

 

That's where technology stagnancy happens. This is very bad for everyone, when this happens.

 

Eventually the tech would have trickled down to cheaper phones, as Samsung licensed it out, or after the patent expired. Or if someone invented a new different way to achieve a similar result (thus not violating the original patent).

[RejZoR]

Frankly, I don't want a curved screen phone...

[Amazonsucks]

5 hours ago, BananaInSandals said:

Their selling point is super low price tbh. They make it so it's cheap af and you can change your phone down the line in a year or two without paying more than buying a flagship phone from the big companies. One third of the price for half the life time. Good enough is often, well, good enough. 

A race to the bottom fueld by China's intellectual property theft is a bad thing for consumers. "Its cheap" is only a selling point to the uninformed consumers, whose buying habits ruin the market for everyone.

[mr moose]

8 hours ago, WikiForce said:

If they had quality control issues then they wouldn't be having so much success as of recent 3-4 years. Even iPhones and Samsung phones have made in China tag over them. So doesn't that make you question their reliability as well? Xiaomi and many other chinese brands make excellent budget phones with acceptable build quality.

In China quality is a commodity,  when they make a cheap product they don't do quality control, but when they make a product and the company wants quality then they get it, it costs more but they get it.  

 

I think what Dabominable was getting at is that the Chinese company that bought this IP aren't going to invest in quality control, they will just make the cheapest screen they can because their target consumer will not pay Samsung or Apple prices.  That is how they guarantee they make money from it.

[Dabombinable]

37 minutes ago, mr moose said:

In China quality is a commodity,  when they make a cheap product they don't do quality control, but when they make a product and the company wants quality then they get it, it costs more but they get it.  

 

I think what Dabominable was getting at is that the Chinese company that bought this IP aren't going to invest in quality control, they will just make the cheapest screen they can because their target consumer will not pay Samsung or Apple prices.  That is how they guarantee they make money from it.

Pretty much.

[Speed Weed]

China numbar wong! 

[desertcomputer]

6 hours ago, RejZoR said:

Frankly, I don't want a curved screen phone...

Yep ... screen protector now cost way more compare to flat ones. Also half of the don't actually fit probably .... 

 

 

[Guest]

14 hours ago, Dabombinable said:

Remember: Chinese tech quality rarely surpasses "good enough". So any Oled panels from them probably won't last long.

depends on the company, don't forget most stuff is made in china

[RejZoR]

10 hours ago, EMC said:

Yep ... screen protector now cost way more compare to flat ones. Also half of the don't actually fit probably .... 

 

 

Not only such screens are more fragile because of the bend since they become more rigid (my flat screen on Xiaomi Mi5 is literally bent because a rather deep dent from a fall on the frame warped it and it's fine). Such "curved" screens have less flex on impacts and are far more likely to shatter. Secondly, why the hell would you want to distort an image over a frigging edge?

 

I don't mind curving back glass because it's nice to hold (even though same rigidness issues as front), but front screen, just no. Don't.

[asus killer]

didn't Samsung made copying others a science, especially Apple, with some high profile court cases lost. So i call this karma and move on.

[Thaldor]

16 hours ago, dalekphalm said:

You have to remember why things like patents exist.

 

Samsung spent $150bn Won ($133m USD) for research and development to develop the curved tech. They now have to recoup that investment. By having an exclusive patent, they are able to charge higher prices, which lead to them being able to repay that investment.

 

Now, China comes in, steals the tech (technically the supplier stole the tech. China just bought stolen tech, they didn't steal it themselves), and starts producing it for pennies on the dollar. China paid $15bn Won ($13m USD) for their "investment". So their ROI is much smaller, meaning they can sell for much cheaper.

 

This is basically bad for everyone, including consumers.

 

Why? Because if companies can't rely on recouping their investment, because their competitor is just going to steal the product and make it without having to worry about repaying investment, it'll basically make it financially unsustainable to invest in new technologies.

 

That's where technology stagnancy happens. This is very bad for everyone, when this happens.

 

Eventually the tech would have trickled down to cheaper phones, as Samsung licensed it out, or after the patent expired. Or if someone invented a new different way to achieve a similar result (thus not violating the original patent).

But always remember there's also the flip side of the coin which we have to some extent already seen. Too loose and long patent/trademark/copyright laws might actually also cause technological stagnation. See Apples patent for iPad, they basicly patented a rectangle with rounded corners and a circle thing on it. Not to even talk about the great american^tm Patent trolls^tm, companies that doesn't do anything else than buy out dying companies and their patent/trademark/copyright portfolios which they then start to sue out. Combine these to the hard fact that little by little western pt./tm./cr. laws are being changed to pat the backs of older megacorporations that want to hold on to their old busines models and vital portfolios that bring them steady income and you have a good soup for technological armageddon. Think about Nokia, in the time it made good phones and then failed and has now withered yo the level of being just a patent holding company with network development, doesn't sound very sexy subject, but if something like Nokia was bought out by some patent troll, oh boy, would the mobile world be a one big unhappy courtcase for everyone.

 

Let's just hope western world doesn't start touching it's patent laws like it likes to touch it's copyright laws, could be really bad if something like Motorola and Nokia could hang on to their patents only because Apple just loves their rectangular boxes with rounded edges so much that they want to keep the patent for 75 years instead of 25 years (just like Universal loves to bring out the Elvis Christmas Songs album every year out again and again).

[williamcll]

It's probably deeper than this, I bet the supplier was more than bribed to do this.

[dalekphalm]

9 hours ago, Thaldor said:

But always remember there's also the flip side of the coin which we have to some extent already seen. Too loose and long patent/trademark/copyright laws might actually also cause technological stagnation. See Apples patent for iPad, they basicly patented a rectangle with rounded corners and a circle thing on it. Not to even talk about the great american^tm Patent trolls^tm, companies that doesn't do anything else than buy out dying companies and their patent/trademark/copyright portfolios which they then start to sue out. Combine these to the hard fact that little by little western pt./tm./cr. laws are being changed to pat the backs of older megacorporations that want to hold on to their old busines models and vital portfolios that bring them steady income and you have a good soup for technological armageddon. Think about Nokia, in the time it made good phones and then failed and has now withered yo the level of being just a patent holding company with network development, doesn't sound very sexy subject, but if something like Nokia was bought out by some patent troll, oh boy, would the mobile world be a one big unhappy courtcase for everyone.

 

Let's just hope western world doesn't start touching it's patent laws like it likes to touch it's copyright laws, could be really bad if something like Motorola and Nokia could hang on to their patents only because Apple just loves their rectangular boxes with rounded edges so much that they want to keep the patent for 75 years instead of 25 years (just like Universal loves to bring out the Elvis Christmas Songs album every year out again and again).

Here's the thing - you can have issues with the current patent system, and want to tweak said system, but by turning a blind eye to companies that legit steal patented tech will destroy the tech industry.

 

Also consider in this example, this isn't some "I patented the iPad 20 years ago and no one can still use it" thing. This is cutting edge brand new technology. This is exactly the situation in which patents were created for. A new, expensive to develop technology, that could probably be manufactured pretty cheaply.

 

Those two combinations make patenting it very important, because without a patent, someone else just makes a super cheap version and you never make the R&D investment back.

 

And if that happens, next time you think of a new technology, you go "Well... is it even worth investing in the research?" And then that creates a domino effect that can span the entire industry.

 

Patents are an absolute must for our society.

[LAwLz]

2 hours ago, dalekphalm said:

Patents are an absolute must for our society.

I'd like to add that I don't think software patents are important (hence why some countries have banned them or partially banned them, like France and Australia) and I think patents on some things like electronics are too long (does a company really need a 20 year government issued monopoly in order to invest and develop something that will probably be very outdated in less than half of that time?).

 

But some form of patenting is necessary, yes.

 

But I am not sure why patents are being discussed in this thread, because it is not related to patents. No patents laws or the likes were being broken in this case. From what I've gathered this was the design of the manufacturing machines as well as other trade secrets being stolen.

Those things are usually not patented because patents provide next to no protection from copycats. On top of that, filing a patent for those types of machines will most likely fall under prior art, as well as provide potential copycats very detailed information about how to copy the designs and work around the patents.

 

 

Patents and trade secrets are two ways of protecting your inventions, and one is not always better than the other.

In the case of designs for manufacturing machines and assembly lines, trade secrets is far better a defense than a patent.

 

 

12 hours ago, asus killer said:

didn't Samsung made copying others a science, especially Apple, with some high profile court cases lost. So i call this karma and move on. 

Those cases were bullshit and just showed how stupid the patent system is in some cases.

It also showed how corrupt parts of the US legal system is, when the president steps in and vetoes court orders against US companies but lets foreign companies get fucked in the ass.

 

1) The patents were ridiculous and did not deserve to exist. Like a patent that was literally a patent granting Apple exclusive rights to a rectangle with evenly square corners, and a grid of colorful icons, among other things.

2) When Apple refused to pay licensing fees to Samsung for some of their patent violations, the court ruled that sales of some iPhones and iPads would be banned until the licenses were paid. Obama went in and vetoed that ruling.

[mr moose]

7 minutes ago, LAwLz said:

 

But I am not sure why patents are being discussed in this thread, because it is not related to patents. No patents laws or the likes were being broken in this case.

Because it's related.  People consider industrial protection laws to be akin to patents.  The serve the same purpose so if one is being questioned then naturally so is the other.

[LAwLz]

6 minutes ago, mr moose said:

Because it's related.  People consider industrial protection laws to be akin to patents.  The serve the same purpose so if one is being questioned then naturally so is the other.

But they aren't like patents, at all. One is a subset of the other.

It's like saying if you question the usefulness of pick-ups you also question the purpose of airplanes because both are motorized vehicles.

 

They may achieve the same goal (protecting inventions from copycats), but the ways they achieve that goal are completely different depending on which specific aspects we're talking about.

Different laws surrounding them. Different regulatory bodies overseeing them. Different punishments if violated. Different time-frames. Different disclosure requirement and methodologies. They are very different in lots of important aspects.

[mr moose]

2 minutes ago, LAwLz said:

But they aren't like patents, at all. One is a subset of the other.

It's like saying if you question the usefulness of pick-ups you also question the purpose of airplanes because both are motorized vehicles.

 

They may achieve the same goal (protecting inventions from copycats), but the ways they achieve that goal are completely different depending on which specific aspects we're talking about.

Different laws surrounding them. Different regulatory bodies overseeing them. Different punishments if violated. Different time-frames. Different disclosure requirement and methodologies. They are very different in lots of important aspects.

What ever, they both protect a companies IP, the only difference is one you don't have to apply for. And that's why people are discussing the patent system.

[LAwLz]

Just now, mr moose said:

What ever, they both protect a companies IP, the only difference is one you don't have to apply for. And that's why people are discussing the patent system. 

Well that is one difference, as well as the other things I listed.

 

I mean, if we assume they were the same thing except one had to be applied for and the other one not, then patents would be entirely superfluous and should be completely abolished. If other laws already supplies the same protection, the patent system is a colossal waste of money since we supposedly have two independent systems doing the same things.

But since they aren't the same, at all (or like I said, one is a subset of the other) both are necessary.

[mr moose]

1 minute ago, LAwLz said:

Well that is one difference, as well as the other things I listed.

 

I mean, if we assume they were the same thing except one had to be applied for and the other one not, then patents would be entirely superfluous and should be completely abolished. If other laws already supplies the same protection, the patent system is a colossal waste of money since we supposedly have two independent systems doing the same things.

But since they aren't the same, at all (or like I said, one is a subset of the other) both are necessary.

I think your reading way too far into this.  People are discussing patents because they are an integral part of the context (specifically in regard to protection of IP). 

[dalekphalm]

7 hours ago, LAwLz said:

I'd like to add that I don't think software patents are important (hence why some countries have banned them or partially banned them, like France and Australia) and I think patents on some things like electronics are too long (does a company really need a 20 year government issued monopoly in order to invest and develop something that will probably be very outdated in less than half of that time?).

 

But some form of patenting is necessary, yes.

I don't disagree about software patents. While I think there should be some protection for unique and specific ways of doing things (eg: Someone literally making a knockoff of Office in every way), but patenting ways of doing things that are obvious or simply the next step in standardized ways of doing things doesn't make sense.

7 hours ago, LAwLz said:

But I am not sure why patents are being discussed in this thread, because it is not related to patents. No patents laws or the likes were being broken in this case. From what I've gathered this was the design of the manufacturing machines as well as other trade secrets being stolen.

Those things are usually not patented because patents provide next to no protection from copycats. On top of that, filing a patent for those types of machines will most likely fall under prior art, as well as provide potential copycats very detailed information about how to copy the designs and work around the patents.

Regardless of whether patents are involved or not - stealing trade secrets is straight up illegal, and wrong. Whether those secrets were patents or not.

 

Granted, in China, I'm not sure too much what Samsung can even do about it, besides blacklist those suppliers.

7 hours ago, LAwLz said:

Patents and trade secrets are two ways of protecting your inventions, and one is not always better than the other.

In the case of designs for manufacturing machines and assembly lines, trade secrets is far better a defense than a patent.

I would agree with this.

 

7 hours ago, LAwLz said:

Those cases were bullshit and just showed how stupid the patent system is in some cases.

It also showed how corrupt parts of the US legal system is, when the president steps in and vetoes court orders against US companies but lets foreign companies get fucked in the ass.

 

1) The patents were ridiculous and did not deserve to exist. Like a patent that was literally a patent granting Apple exclusive rights to a rectangle with evenly square corners, and a grid of colorful icons, among other things.

2) When Apple refused to pay licensing fees to Samsung for some of their patent violations, the court ruled that sales of some iPhones and iPads would be banned until the licenses were paid. Obama went in and vetoed that ruling.

As I said previously, definitely, there's room to improve the patent (and copyright, while we're at it) system - particularly in the US. The US has always been somewhat protectionist towards American companies in these regards - the various Samsung vs Apple court cases often point to this.

 

I think limiting the time on patents and copyrights are definitely in order to start to fix the system, and also providing more robust exemptions, when it makes sense, as well.