However, TCL can still appeal the decision. The pair are also embroiled in two other lawsuits over LTE technology.
Latest from Cho Mu-Hyun
Lee Jae-yong has been sentenced to two and a half years in prison at the retrial for his bribery case.
The South Korean search giant was fined 26.7 billion won, around $23 million, from the South Korean FTC for manipulating its search algorithm to show rivals lower.
But this time around he will stand trial as a free man.
The US streaming giant is among 21 multinational companies being investigated by South Korea's tax service.
The Samsung heir and two executives will now stand trial as free men for the financial fraud charges.
This time it's for breaking local capital market laws, including accounting fraud and stock manipulation, in the merger of two key company affiliates.
The three patents in question are related to LG's LTE technology.
The patents in question affect the majority of TVs sold by Hisense in the United States, LG alleges.
Samsung heir-apparent JY Lee made his first court appearance in nearly two years and faces possibly a heavier sentence than before.