In a recent European patent infringements case between Apple and Samsung, in which the latter asked for injunctions against multiple Apple devices, the European Union’s European Commission (EC) has alleged that Samsung had abused its ‘dominant position’, which is in violation of EU antitrust rules and regulations. While it remains to be argued whether Samsung had the foresight to prepare for this move, it is interesting to note that it has dropped requests to ban Apple products across several European countries including Germany, UK and France, earlier this week.
According to Joaquin Almunia, the EC’s competition chief, companies are entitled to hold intellectual-property rights to protect the integrity of their products but must also avoid misusing these rights in a way that serves to be detrimental to the industry as a whole, especially if these rights serve to greatly benefit businesses and consumers. When these companies holding these rights have agreed to license these patents to willing licensees for fair remuneration, taking legal action against these companies only serves to harm the industry’s competitive atmosphere and it affects consumers and business alike.
Samsung sought an injunction against Apple for violating patent agreements pertaining to 3G connectivity, but this has been argued to be standard-essential by the EC, meaning that they must abide by the FRAND (fair, reasonable, and non-discriminatory) basis in order to hold water in court. The EC had begun investigating Samsung in November 2011, and announced a formal investigation to determine whether Samsung was abiding by the FRAND terms and justly licensing its patents according to the standards set by the ETSI (European Telecommunications Standards Institute) or if it was operating against the terms.
Samsung’s move to withdraw some of its ban requests may have either been precautionary or an informed decision but, in either case, it may serve to soften the blow if the EC’s final decision happens to be against Samsung. A ruling against Samsung means that the company will have to pay a fine of up to 10% of its annual sales: a definite dent in Samsung’s earnings per year which could hurt the company in its bid to gain dominance over Apple in the mobile industry.
As the case is, Samsung has committed to licensing SEPs on FRAND terms to Apple, who has willingly agreed to negotiate under those terms. If Samsung is found to have infringed upon those terms and misused them to deter or undermine Apple’s business in the industry then it can be held liable to a hefty fine, some of its allegations against Apple in court can be dismissed or compromised, and it could stand to lose a bit of its standing against Apple.
