Naver and Kakao to Go Through Legal Battles with a Patent Troll

Kakao and Naver are caught up in a battle with a global patent troll and their mobile messengers, which are their major businesses, are patent troll’s targets. As it is predicted that this lawsuit is going to take long time, industries are pointing out that they need to prevent any damage with precise responses.

According to an industry on the 27th, a global NPE (Non-Practicing Entity) called UNILOC recently filed a lawsuit at the Eastern District of Texas regarding Kakao and LINE, which is Naver’s affiliate, invading its patents. It indicated on its lawsuit that KakaoTalk and Line, which are Kakao and Naver’s mobile messengers respectively, invaded its patents.

UNILOC filed a lawsuit regarding 7 patents that it possesses against Kakao on the 30th of last month and the 14th of this month. It also filed an identical lawsuit against Naver on the 14th.

Focal point of this lawsuit is a voice talk function. UNILOC is proclaiming that a voice talk through a messaging application and a group voice talk function for more than 3 people have invaded its patents. A technology that shows connection status of other person that is able to use a voice talk on a messenger and a file managing function that allows a user to save and erase corresponding voice messages are included in this lawsuit.

Patents that are brought up by UNILOC are not technologies that are owned by particular businesses, but technologies that are widely used in messengers. It seems that its strategy is to receive huge amount of compensation from major global messenger businesses. Not only did UNILOC filed lawsuits against Kakao and Naver, but it also recently filed a lawsuit against Tencent’s messenger called ‘WeChat’ regarding invasion of same patents.

UNILOC is a global patent troll that has its base in Luxemburg, which is a tax haven. It filed a lawsuit against Microsoft in 2009 regarding invasion of software technology that prevents pirated editions. In the end, UNILOC won $388 million of compensation. Based on this winning, it received even more loyalties from other businesses. However this patent became invalid recently and it is forcing UNILOC to look for a new source of profit.

“Although UNILOC does not have to return any settlements, it has decided to look for a new source of profits since it could no longer raise any profits.” said Lee Chang-hoon who is an attorney for Aju Patent & Law Firm.

It seems that this lawsuit is going to take at least one to two years. Some predict that UNILOC will be a tough opponent for Kakao and Naver since they have a lot of patents and even won against MS. It is known that most patents that UNILOC possesses were registered in early 2000s.

Kakao and Naver rarely had any issues with global patent trolls until now. Kakao is currently looking for variety of O2O services through KakaoTalk while Naver’s LINE is expected to be listed on Japanese and American stock markets. As mobile messenger businesses are starting to expand, they have become targets of UNILOC.

While Kakao and Naver are going to actively respond to this lawsuit, they are also going to be open to communications with UNILOC. Regardless of compensation, they need to minimize any dangers by arbitrating with UNILOC.

“Only 7% of lawsuits regarding patents go to verdict of first trials.” said Attorney Lee. “Because it costs millions of dollars to hire attorneys, they need to actively take actions against this lawsuit and minimize length of battles.”

Kakao and Naver are planning to take actions after clearly understanding information that is indicated in this lawsuit.

“Although we have not received UNILOC’s petition yet, we know that UNILOC filed a lawsuit.” said a representative for Kakao. “As soon as we receive this petition, we are going to take actions after understanding what is indicated on this petition.”

“It seems that UNILOC filed many lawsuits against major global mobile messengers regarding invasion of its patents.” said a representative for Naver. “We are currently looking for ways to respond and we are also thinking about taking actions along with other businesses that are affected by this petition.”

Staff Reporter Oh, Daeseok | [email protected]