Samsung and Sony have recently entered into a cross licensing agreement to share each other's patents to basic technologies. The five-year deal covers nearly 90% of their 2,4000 patents registered in the US -- currently Samsung has 11,000 while Sony holds 14,000. The deal also extends to subsidiaries where the two companies collectively have over 50% share, as well as their overseas affiliates.

 

Under the agreement, patents to be shared include those involving data compression, DVD, DRAM, and flash memory chips. On the other hand, patents to core technologies will be withheld, such as those concerning Sony's PlayStation infrastructure, DRC (Digital Recreation Creation), as well as Samsung's home networking and DNIe (Digital Natural Image engine).

 

In addition, the agreement excludes sharing TFT LCD (Thin Film Transistor Liquid Crystal) and OLED (Organic Light Emitting Diode) display technology. According to Sony, TFT LCD technology is already covered by S-LCD, an 7G LCD panel joint venture set up by Sony and Samsung to compete with LPL (LG Philips LCD).

 

The agreement will enable both companies to compliment one another's expansive patent portfolios, thus filling in technological gaps and further speeding up product development. Samsung will gain access to Sony's pool of audio-visual technologies while Sony will derive strength from Samsung's communications and semiconductor technologies. The companies claim they will also be able to improve their own differentiating technologies and provide value-added offerings. Their supply relationship will also further be strengthened.