Skip to comments.European Commission says Samsung Electronics and Motorola abused SEPs against Apple
Posted on 04/29/2014 4:14:56 PM PDT by Swordmaker
The European Commission has today rendered commitments offered by Samsung Electronics (Samsung) legally binding under EU antitrust rules. According to these commitments, Samsung will not seek injunctions in Europe on the basis of its standard essential patents (SEPs) for smartphones and tablets against licensees who sign up to a specified licensing framework. Under this framework, any dispute over what are fair, reasonable and non-discriminatory (so-called FRAND) terms for the SEPs in question will be determined by a court, or if both parties agree, by an arbitrator. The commitments therefore provide a safe harbour for all potential licensees of the relevant Samsung SEPs. Indeed, potential licensees that sign up to the licensing framework will be protected against SEP-based injunctions by Samsung (see also MEMO/14/322). The Commission has also taken a prohibition decision in a separate investigation concerning Motorola (see IP/14/489). Commission Vice President in charge of competition policy Joaquín Almunia said: The protection of intellectual property and competition are both key drivers of innovation and growth. This is why it is essential that intellectual property is not misused to the detriment of healthy competition and, ultimately, of consumers. In this context, I welcome Samsungs commitment to resolve disputes on standard essential patents without having recourse to injunctions in a way that could harm competition. Together with todays decision in the Motorola case, the Commissions decision to accept Samsungs commitments provides clarity to the industry on what constitutes an appropriate framework to settle disputes over FRAND terms in line with EU antitrust rules. I would also encourage other industry players to consider establishing similar dispute resolution mechanisms.
The Commissions competition concerns
SEPs are patents essential to implement a specific industry standard. It is not possible to manufacture products that comply with a certain standard without accessing these patents by obtaining a licence. This may give companies owning SEPs significant market power. As a result, standards bodies generally require their members to commit to license SEPs on FRAND terms. This commitment is designed to ensure effective access to a standard for all market players and to prevent hold-up by a single SEP holder. Such access on FRAND terms allows consumers to have a wider choice of interoperable products while ensuring that SEP holders are adequately remunerated for their intellectual property.
Seeking injunctions before courts is generally a legitimate remedy for patent holders in case of patent infringements. However, the seeking of an injunction based on SEPs may constitute an abuse of a dominant position if a SEP holder has given a voluntary commitment to license its SEPs on FRAND terms and where the company against which an injunction is sought is willing to enter into a licence agreement on such FRAND terms. Since injunctions generally involve a prohibition of the product infringing the patent being sold, seeking SEP-based injunctions against a willing licensee could risk excluding products from the market. Such a threat can therefore distort licensing negotiations and lead to anticompetitive licensing terms that the licensee of the SEP would not have accepted absent the seeking of the injunction. Such an anticompetitive outcome would be detrimental to innovation and could harm consumers.
Samsung owns SEPs related to various mobile telecommunications standards and has committed to license these SEPs on FRAND terms. In April 2011, Samsung started to seek injunctions against Apple on the basis of its SEPs. The Samsung SEPs in question related to the European Telecommunications Standardisation Institutes (ETSI) 3G UMTS standard, a key industry standard for mobile and wireless communications. In December 2012, the Commission informed Samsung of its preliminary view that it considered Apple a willing licensee on FRAND terms for Samsungs SEPs and that against this background, the seeking of injunctions against Apple based on Samsungs SEPs in several EU Member States may constitute an abuse of a dominant position in breach of Article 102 of the Treaty on the Functioning of the EU (TFEU) (see IP/12/1448 and MEMO/12/1021).
To address the Commissions concerns, Samsung has for a period of five years committed not to seek any injunctions in the European Economic Area (EEA) on the basis of any of its SEPs, present and future, that relate to technologies implemented in smartphones and tablets against any company that agrees to a particular framework for licensing the relevant SEPs.
The licensing framework provides for:
a negotiation period of up to 12 months; and
if no agreement is reached, a third party determination of FRAND terms by a court if either party chooses, or by an arbitrator if both parties agree on this.
An independent monitoring trustee will advise the Commission in overseeing the proper implementation of the commitments.
Article 9 of the EUs Antitrust Regulation (Regulation 1/2003) allows the Commission to conclude antitrust proceedings by making commitments offered by a company legally binding. Such a decision does not reach a conclusion on whether EU antitrust rules have been infringed but legally binds the company to respect the commitments. If the company breaches these commitments, the Commission can impose a fine of up to 10% of its annual worldwide turnover, without having to find an infringement of Articles 101 or 102 TFEU. A policy brief on commitment decisions under Article 9 is available here.
The Commission opened its investigation in January 2012 (see IP/12/89). In December 2012, the Commission issued a Statement of Objections setting out its preliminary competition concerns (see IP/12/1448). In September 2013, Samsung offered commitments in order to address the Commissions concerns. In October 2013, the Commission consulted interested parties on Samsungs commitments (see IP/13/971). On 3 February 2014, Samsung submitted the final version of the commitments which addressed the Commissions competition concerns.
The Commission recognises that other dispute resolution mechanisms than the specific ones to which Samsung commits may also be relied upon to settle FRAND disputes.
Source: European Union
MacDailyNews Take: Thermonuclear to the tune of $0 again.
European Commission says Googles Motorola Mobility abused SEP against Apple, declines to fine April 29, 2014
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The EU levied no fines. They just slapped their wrists and told them they cannot use SEPS the way they were using them in patent hold-ups.
Samsung > crApple
Nice. Thanks sm.
Who is copying whom? That should tell you who is the innovator.
That was evidence in a trial that resulted in Samsung being ordered to pay Apple $960 MILLION in infringement. They now are in trial two about further patent infringement on later models. . . and have essentially admitted they HAVE infringed Apple's patents but are arguing the infringed patents aren't worth very much. . . trying to limit how much they'll be ordered to pay.
Now, down the road. . . Apple adds a fingerprint sensor to iPhone 5Stwo months later Samsung adds a fingerprint sensor to Galaxy S5. . . which works perhaps one attempt out of four. . . Where Apple's works every time. Apple has the ONLY 64 bit mobile processor and operating system as well as apps. Samsung has only 32 bit processor. Samsung claims sales numbers that at trial turn out to be bogus. . . when discovery forces actual data.
Samsung had to BUY two patents to assert against Apple with a combined claimed infringement value of just $6.9 million (because they had none of their own to assert!) in counterpoint to Apple's claims for BILLIONS in infringements. . . none of which were purchased.
In another infringement trial now pending in the US, Samsung is asserting the very same Standard Essential Patent that the European Commission just slapped them down for asserting in a German court against Apple. That legal precedent, while not being in a US COURT, is very indicative of legal thinking on SEPs. A US Appellate Court has just ruled that a trial judge erred in dismissing the SAME SEP at trial, instructing him on FRAND's importance. Our own International Trade Commission has refused to issue injunctions based on SEP infringement. . . because they ARE contractually encumbered, which Samsung chooses to ignore. All that's a intellectual property side show that demonstrates both Samsung's and Google/Motorola's ethics.
But the point is, where is this "innovation" you claimaside from bigger and bigger screens in AMOLED with distorted color gamut that fades out in bright light? Is it the gimmicky eye tracking that works less than 25% of the time which can't be reliably used? The ability to connect to HDMI? Higher screen DPI that goes beyond the eye's ability to discern differences is pointless specification inflation of no benefit to the user, unless they are using a microscope to read the screen? Where?
crApple hasn't done anything innovative since the genius bar. The iPhones are just outdated junk marketed to hipster doofesus that think they are cool with an iPhone in their hand.
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