Patent disputes spur Samsung's lobbying on smartphones
Samsung boosted spending on lobbyists to $US900,000 last year from $US150,000 in 2011 as it tries to influence the government on issues ranging from intellectual-property infringement to telecommunications infrastructure, regulatory filings show.
The company also hired Sony Corp veteran Joel Wiginton to run a new government-relations office in Washington.
The higher spending comes as the South Korean company is embroiled in patent disputes with Apple on four continents as the two struggle for dominance in an industry expected to double to $US847 billion in sales by 2016. In a US lawsuit, Apple was initially awarded $1 billion in damages after a jury decided Samsung copied the iPhone maker's designs for mobile devices.
"Samsung is being sued left and right," said R. Polk Wagner, a professor of intellectual-property law at the University of Pennsylvania Law School. "A major component of their business is smartphones, and this is becoming a very litigious area."
Last year's lobbying expenditure was the biggest for Samsung in a single year, according to a US government database of lobbying disclosure filings dating to 1999. The previous high was $US370,000 in 2008.
In a statement, Samsung said the expanded effort was "a prudent step as part of day-to-day business operations, our growing presence outside of our headquarters country, and our commitment to transparency". The company declined to comment further on its lobbying expenditure.
The greater focus on lobbying by technology companies reflects the growing importance of US laws and regulations to the industry as Congress considers issues from patents to internet privacy to copyright infringement, said Mark Lemley, who teaches patent law at Stanford Law School in California.
"It's just an increasingly important part of their business," he said. "What happens in Washington can significantly affect the lives of technology companies, and they can't ignore it."
The bulk of Samsung's US lobbying money last year, $US760,000, went to the law firm Akin Gump Strauss Hauer & Feld, according to the filings.
Samsung is involved in dozens of legal disputes with Apple worldwide as the two biggest smartphone makers seek to use patents to curb each other's growth or force changes in the other's products. Apple sold 27.4 million iPhone 5s in the quarter ended December 31, and Samsung sold 15.4 million Galaxy S3 models, according to researcher Strategy Analytics.
Last August, Apple won the verdict against Samsung from a federal court in San Jose, California. Apple also sought to ban sales of "infringing" Samsung devices, a request that the judge rejected. Samsung has denied copying Apple devices, and both companies have filed appeals. Samsung and Ericsson also have lodged patent-infringement complaints against each other.
Frequently Asked Questions about this Article…
Samsung increased US lobbying as it faces anti-dumping measures and a series of patent disputes with Apple, and to influence rules on intellectual property, telecommunications infrastructure and other regulatory issues. The company described the effort as a prudent part of normal business operations, reflecting its growing presence outside its home country and a commitment to transparency.
Samsung boosted US lobbying spending to $US900,000 in the last reported year, up from $US150,000 in 2011. According to the filings, about $US760,000 of that total went to the law firm Akin Gump Strauss Hauer & Feld.
Samsung and Apple are engaged in patent fights on multiple continents, including a US case where a jury initially awarded Apple $US1 billion in damages after finding Samsung copied iPhone designs. Apple also sought sales bans on some Samsung devices (a judge rejected that request) and both companies have filed appeals. For investors, these disputes represent legal and regulatory risk that can lead to damages, injunctions, higher costs and potential impacts on product sales and market position.
Samsung hired Joel Wiginton, a veteran from Sony Corp, to run its new government-relations office in Washington as part of the firm’s expanded lobbying and public affairs effort.
Researcher Strategy Analytics reported Apple sold 27.4 million iPhone 5s in the quarter ended December 31, while Samsung sold 15.4 million Galaxy S3 models in the same period. The article also notes the smartphone industry was expected to grow to $US847 billion in sales by 2016, underlining the size of the market the companies are competing in.
Experts quoted in the article say US laws and regulations are increasingly important to tech companies. Greater lobbying suggests companies see regulatory and legal outcomes in Washington as material to their business — issues like patents, internet privacy and copyright can significantly affect operations, so investors should monitor legal and regulatory developments as part of assessing company risk.
Yes. The article says Samsung has been involved in dozens of legal disputes worldwide and specifically mentions a patent-infringement dispute with Ericsson, indicating Samsung’s legal exposure extends beyond just its rivalry with Apple.
Everyday investors should track major legal rulings, appeals and any injunctions affecting product sales, changes in lobbying disclosures or staffing (such as the new Washington office), and material legal expenses. These items can influence Samsung’s costs, regulatory environment and competitive position — all relevant to company performance and investment risk.

