December 16, 2004 (TOKYO) -- Samsung Electronics Co Ltd and Sony Corp signed a cross-license agreement on December 14, detailing mutual usage of patent portfolios owned by the two companies.

Over the past several decades, Samsung and Sony have each built strong patent portfolios through vigorous R&D efforts on a wide range of electronic technologies, especially those related to digitalization and broadband network capability.

The agreement applies to some 11,000 of Samsung’s patents and some 13,000 of Sony’s.

The announcement is the culmination of negotiations that have occurred between the two companies since December 2003. It is significant that the two leading companies in the electronics industry will share patents across major product lines through a cross-license agreement. The goal was to construct a mutually beneficial relationship whereby Samsung and Sony could use each other`s patent portfolios to effectively keep pace with the fast and sophisticated advancement of digital technologies. This indicates a new patent relationship, appropriate for the broadband/network era.

To enable greater business growth through efficient product development, the agreement licenses those patents which are considered to be the basic technologies necessary for product development. They are associated with technologies such as basic semiconductor technology and industry standard technologies.

To maintain the uniqueness of each company, however, and to allow for healthy competition in the market, the so called Differentiation Technology Patents and design rights are excluded from the agreement. Examples of Differentiation Technology Patents not licensed from Sony to Samsung include those related to Digital Reality Creation (DRC) and PlayStation Architecture. Patents not licensed from Samsung to Sony include those related to the Digital Natural Image Engine (DNIe) and Samsung`s Home Networking Technology. In addition, the agreement does not apply to TFT-LCD and organic light emitting diode (OLED) display patents.

Both Sony and Samsung believe that the cross-license agreement will strengthen each company’s ability to provide better products and services to consumers worldwide. At the same time, the exclusion of certain patents and design rights from the agreement will enable each company to maintain its uniqueness and competitiveness.

The cross-license agreement between Samsung and Sony includes the subsidiaries of both companies.