Samsung and lg's patent playbook: how they're staying ahead of china's tcl and hisense in tvs

China's TCL and Hisense have been on a tear in global TV sales, but Samsung and LG are fighting back with a potent weapon: patents.

Patents become a barrier

As these Chinese brands have gained market share, Samsung and LG have been amassing a vast array of patents related to display technology. This has created a significant barrier for Chinese manufacturers to scale and export their products.

Take OLED, for instance. While China's BOE and CSOT have made strides in producing high-quality OLED panels, they still rely on patents owned by Samsung Display and LG Display. In a patent dispute between Samsung and BOE in 2022, BOE agreed to pay hundreds of millions of euros in royalties.

This patent wall extends to other display technologies as well. In the case of MicroLED, Korean companies hold the lion's share of patents, with South Korea accounting for 42% of all registered patents globally, according to a government report.

Patents become a revenue stream

But patents aren't just a defensive strategy. They can also generate significant revenue for companies like LG Display, which saw its patent royalties surpass €57.5 million for the first time, according to Korean media.

In fact, even in LCD technology, where Chinese manufacturers have caught up, LG Display still collects royalties from companies like BOE and CSOT, which struggle to produce high-quality LCD panels without infringing on LG's patents.

This patent-based business model has allowed Samsung and LG to maintain their competitiveness, even as Chinese brands like TCL and Hisense gain ground in terms of sales volume.

However, it's worth noting that relying solely on patent royalties or even selling patents to competitors won't be a sustainable long-term strategy. History has shown that companies that focus primarily on licensing technology often get left behind.