Samsung suppliers locked in legal battle in Vietnam

A domestic legal fight has blown up into an offshore battle.

Jahwa Electronics and Mplus – both vibration motor suppliers for Samsung smartphones – are wrestling over patents in Vietnam where a growing number of South Korean manufacturers have been settin up camp, according to industry sources on May 29.

In April this year, Jahwa sued Mplus in the Vietnamese court of Bac Giang for patent infringement. According to Jahwa, Mplus used two of its Vietnamese patents (Registry No.19164 and 20318) without permission. Earlier in January, Jahwa attained an opinion from the Vietnamese Intellectual Property Research Institute (VIPRI) supporting its claims.  

“The VIPRI opinion helped tip the scale when Orion won a trademark suit against a Vietnamese company last year,” explained an executive from Jahwa. He added that the goal of the lawsuit is to collect an “appropriate amount” of royalties from Mplus.

Theoretically speaking, if the court issues an infringement injunction to side with the patent-holder, the defendant firm can suffer huge losses due to subsequent production suspensions.

Samsung Electronics has so far declined to comment, but industry watchers say it may speak up if the lawsuit affects its supplies.

“Samsung strives to maintain a steady 30:30:30 ratio between its suppliers,” said one source who previously worked at Samsung. “Should it detect possible disruptions, it may pressure suppliers against exercising patent rights.”

Due to a lack of precedents, however, the prospects of the legal spat remain unclear.

“The VIPRI opinion makes things clearly more favorable for the patent-holder,” said one expert.

Another disagreed on the grounds that unlike the Orion case, which was a trademark suit, this is a patent lawsuit. “We’ll have to see if the patent-holder gets what it wants.”

Some others say that lobbying to the court or choosing the right law firm will weigh heavily on the results.

An Mplus employee said that both Mplus and Jahwa will do their best to uphold their respective interest. He declined to offer further details.

Back home in South Korea, the two suppliers are engaged in a patent invalidation trial and a patent infringement lawsuit. Some of the patents that Jahwa claims to have been violated were already invalidated.

In 2018, Jahwa Electronics posted sales of 358 billion won ($299.5 million) and an operating loss of 7.7 billion won last year. Mplus logged revenues of 48 billion won an operating loss of 2.4 billion won.