Why technology is as much about management as it is about development (with a focus on the Apple vs. Samsung patent dispute)

The Apple and Samsung patent dispute illustrates why technology development is important, but so is technology management.

 

On August 24, 2012, Samsung Electronics, the largest electronics company in South Korea, lost a patent dispute with Apple and was forced to pay a huge amount in damages. To make matters worse, Apple also filed a lawsuit to ban the sale of some of Samsung’s phones, making many Korean companies in the industry nervous. The reason for the lawsuit was that Apple claimed that Samsung had stolen the design of its phones and infringed on its design patents. Samsung countered by claiming that Apple had infringed on its communication patents by applying its communication technology to Apple’s phones, but this claim was completely rejected by the US jury. This case has made many people realize the value of design patents and that technology is not everything.
Even if we assume that there are many parts of the design that were copied, there is one unsavory aspect that keeps nagging at my mind: the fact that the US jury turned a deaf ear to Samsung Electronics’ claimed infringement of a telecommunications patent. It was hard for me to understand how the United States, home to Silicon Valley, the world’s center of technological development, could completely ignore such a technical issue. It is very unfair that every year, many Korean companies pay countless royalties to companies in the United States, Japan, and other countries for this technology, but they are not guaranteed the rights to their own patents. How should we look at a country that is so powerful that it must collect royalties from its own companies in this way, but looks the other way when its own companies infringe on other countries’ technology patents? This behavior of American jurors reminded me of H. Collbran, an American engineer who, at the end of the empire’s last days, instead of bringing new Western technology to the empire’s electricity company, took control of the company, profited from it, and then sold the company to Japan at will when the debt mounted.
After the opening of the port in 1876, Western culture began to be introduced to Korea in earnest, and the advanced science and technology of the West was an object of admiration and wonder, and Korea came to think that adopting it was an important way to escape imperialist aggression. Among the Western technologies, electricity in particular was considered a symbol of modernization due to its convenience and practicality, and the country was eager to adopt it as soon as possible, so the palace was lit up in 1887, seven years after the invention of the incandescent light bulb, and construction of an electric railway in Hansungbu began in 1898. The company that presided over this was the Hansung Electric Company, which was founded the year after the Korean Empire was declared.
The Hansung Electric Company was ‘actively’ established by the imperial government as part of the Korean Empire’s food and industrialization policy, but the ownership was soon transferred to an American, H. Collbran, who took control of many of the company’s rights without thinking about the transfer of technology, and eventually accumulated unmanageable debts and freely handed the company over to Japan without the imperial government’s permission. In the process of handing over the Hansung Electric Company to the Japanese, the imperial family made a huge mistake, and that mistake was that they failed to quickly acquire technology and take back control of the company’s operations from H. Collbran to the imperial family. In a study by a Korean scholar, the imperial government’s handling of the Hansung Electric Company was characterized as follows.

“I would characterize it as a company whose ownership was transferred because it failed to prevent the American monopoly of the technology due to an excessive belief in the practicality of Western advanced technology and the simplistic idea that technology transfer would occur spontaneously.”

In other words, the naïve idea that once technology is imported, it will naturally be transferred is what led to the transfer of Hansung Electric Company into Japanese hands. From this perspective, one might naturally ask the following question

“The fact that Gojong, the emperor of the Korean Empire, invested a huge amount of money in Hansung Electric Company, but in the end, the imperial government failed to take control of the electrical technology and handed it over to the Japanese, was due to the fact that the imperial government failed to take the necessary measures to assert its claim to ownership of the technology.”

I wondered if Samsung Electronics might have made a similar mistake as Hansung Electric Company above. The naïve idea of relying entirely on an American, H. Collbran, when the Korean empire was isolated by Western powers and Japanese ambitions, and the fact that Samsung did not think about how to minimize the damage of Apple’s infringement of its technology patents in an international situation dominated by the United States, and then later claimed it and was ignored, seems not so different. Samsung initially reacted to Apple’s design patent lawsuit in a nonchalant manner, but as the case escalated, the company eventually brought up the fact that Apple had infringed on their telecommunications patents as a defense. Of course, they had no idea whether the technology would be protected in the U.S. or not.
I’m not saying that the company didn’t do anything wrong. However, the Samsung and Apple patent lawsuits leave a lot to be desired, as I think it would have been wiser to assert the rights to their technology under all contingencies rather than assume that their communications patents would be protected. Another contingency is the fact that the United States has a jury system. Jurors are not experts in telecommunications technology and are citizens from all walks of life. Should Apple have presented arguments and evidence to convince these jurors that they were not outright copying when it came to design patent infringement, or should they have tried to dismiss the fact that Apple infringed on a telecommunications patent by arguing that it did? In any case, the result was that not only did they lose the case, but their telecommunications patents were ignored.
The Korean Empire was not without its own problems when it came to technology transfer. When Colebran tried to sell Hansung to the Japanese, Emperor Gojong, who had invested the most money in the company, actively opposed the sale, claiming ownership of the company. He even asked the U.S. Embassy for help, but in the end, Gojong was unable to exert any influence over the sale. Even setting aside the fact that Colebran had already left the company in deep deficit, the imperial family could not immediately take back control of Hansung because there were very few Korean technicians who could work on the company’s trams and electric lights. The financial deficit was also caused by the fact that the engineers were all American or Japanese, and it cost a lot of money to pay their salaries. As a result, no schools were built to train specialized technical personnel, thinking that technology transfer would be easy, and the company ended up in the hands of the Japanese, and no technology transfer took place at all. In this way, if you don’t thoroughly prepare yourself to have authority over technology, you can lose control of the initiative without having enough say, as in the case of Samsung Electronics and Hansung Electric. In the end, only thorough management of technology can lead to sufficient voice.
It may seem that this viewpoint is strictly nationalistic and in favor of Samsung Electronics, which lost this case. However, this patent litigation dispute is just an example, and what I am ultimately trying to say is that technology is not only about ‘development’ but also about ‘management’. By “management,” I mean being as prepared as possible to fully assert your rights to the technology you’ve created, and having a plan in place in case of infringement to ensure that you are fully heard and treated as the owner of the technology. The more unstable the international situation and the economy, the more likely it is that cases like this one will be decided in favor of the country of origin, and it is important to be prepared so that you don’t end up like Hansung Electric.