Samsung drastically cuts funding for public technology foundation

Posted on : 2013-08-14 12:21 KST Modified on : 2019-10-19 20:29 KST
Government and funding company couldn’t agree on Samsung’s degree of control over foundation’s technological output

By Lee Hyung-sub and Hwang Ye-rang, staff reporters

Samsung is reducing funding for its planned “future technology development foundation.”

Originally, the company said in May that it was putting up 1.5 trillion won (US$1.34 billion) over the next ten years to support the “creative economy” pledged by the government. Now the allotted amount has dropped to 500 billion won (US$446 million), with the remaining one trillion won to be provided through a new “future technology training center” within Samsung Electronics.

The move is expected to trigger an outcry, with critics claiming it runs counter to the initial pledge of Samsung establishing a foundation that would work in the public interest.

On Aug. 13, the Samsung Group announced that the Ministry of Science, ICT and Future Planning had approved the foundation, saying that an announcement would be made this month to select target projects by October.

It also said the funding has been reduced to 500 billion won, with the one trillion won difference from the original plan to be used for a future technology development fund within Samsung Electronics.

Originally, Samsung said it would establish a public interest foundation with 1.5 trillion won in support, including 500 billion won for basic science, another 500 billion won for materials technology, and 500 billion won for “convergence creation” tasks involving information and communications technology.

But the plan ran into a roadblock with the ministry. Samsung wanted a non-transferable, non-exclusive license that would permit it to use patent-pending technology developed through foundation support, as well as a special agreement preventing researchers from filing suit against funders over patent rights. By these terms, Samsung would be guaranteed free use of any research findings produced with the foundation’s money, while closing off the possibility of lawsuits even if problems occurred due to illicit use of patented technology. The ministry concluded that this ran counter to the goal of a public interest foundation.

As the company and ministry kept butting heads, the fund was eventually divided in two: a public interest fund for the basic sciences, where patent seeking was unlikely, and the company center fund for everything else. Under this framework, Samsung would administer the funds directly.

During a talk with reporters when the foundation’s establishment was announced, Samsung expressed its hope to “not just make a simple donation, but contribute to development and innovation in national technology through continued and systematic support.” It also stressed the public service aspect of the foundation, saying it would set up an independent committee to make decisions on its projects.

A source with the ministry said the prospects of a true public service function for the foundation appear uncertain.

“The government objects to the non-transferable, non-exclusive license and non-litigation contract parts, so Samsung Electronics has decided to do it independently,” the source explained. “Samsung said it’s going to administer the one trillion won, and all the government can do is sit back and watch.”

A source with the Samsung Group said on condition of anonymity, “We feel that non-transferable, non-exclusive licensing and non-litigation contracts are minimum rights for the side that’s putting up the money.”

 

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