Samsung’s questionable patent suits against Apple opens door to EU anti-trust investigation

Fri, Nov 4, 2011

Legal, News

Apple and Samsung are in the midst of suing each other into oblivion over patent infringement. But as we’ve stated before, not all patents are created equal. There is a fundamental and extremely important difference between the patents Apple is asserting and those that Samsung are wielding against Apple.

Apple’s patents are completely proprietary. They are under no obligation to license them out to any other company. Samsung, meanwhile, is asserting a number of 3G patents against Apple. These patents however are part of established technological standards. When standards setting bodies seek to create a technological standard to ensure that various technologies can interface with one another, companies can submit their own patents to be part of the standard. The trade-off is that any patents that become part of a technological standard must be offered to everyone for fair and non-discriminatory licensing terms. It’s really a win-win for all parties involved.

But Samsung has been trying to have its cake and eat it to.

Instead of offering its 3G patents to Apple for licensing, it’s instead suing Apple for patent infringement. That’s a huge no-no that flies in the face of why standards bodies exist in the first place and why technological standards are even created.

Apple has pointed out Samsung’s double-sidedness quite a bit in its filings, stating again and again that Samsung is violating their FRAND licensing obligations. Recently, a court in the Netherlands agreed when it dismissed one of Samsung’s suits, ruling that they first have to offer Apple fair licensing terms for its 3G patents before it has standing to sue.

Now FOSS Patents writes that the European Commission is taking a closer look at Samsung’s questionable legal tactics and that there might be an antitrust investigation as a result.

“This investigation,” Florian Mueller writes, “has the potential to force Samsung to withdraw most of its claims against Apple, but let’s not forget that the underlying issue concerns the technology industry at large. Everyone — not just Apple — relies on FRAND standards.”

Samsung, for what it’s worth, issued the following statement: “Samsung has at all times remained committed to fair, reasonable and non-discriminatory licensing terms for our wireless standards-related patents. We have received a request [for information from the] Commission and are cooperating fully. Note that this is a preliminary investigation and the European Commission has not yet determined whether to conduct a full investigation.”

We’ll have more detailed information on this in a later post, but Apple in its motion noted that it had asked Samsung for licensing terms no less than 7 times and never heard back. When Samsung finally did get back to Apple with a licensing proposal, Apple said it was completely not in line with what would constitute fair licensing terms.

The 3G standard is implemented around the globe and Samsung’s assertions of the related patents potentially raise antitrust issues in many jurisdictions. DG COMP could investigate even if this matter “only” had a significant effect on competition in the EU market. But Europe is particularly important in this context for the following reasons:

Five of the nine countries in which Samsung has asserted 3G patents against Apple are EU member states. For a recent list of those assertions, check out this blog post.

Samsung will now have to tread very carefully. If it continues to aggressively pursue its cases against Apple based on 3G patents, it will only make things worse in the EU antitrust case. Like I said, fines can be high. The European Commission would also have the power to force Samsung to license its patents to Apple on certain terms, which would render any injunctions useless.

Samsung thus far hasn’t been terribly successful during the course of its litigation with Apple. It has made a number of odd legal requests, such as demanding to see iPhone 5 and iPad 3 prototypes, and its legal position consists almost exclusively of asserting patents that belong to technological standards. Their mobile phone business, however, has never been stronger so they’ll likely be fighting tooth and nail against Apple to protect its arguably stolen intellectual property.



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