Samsung offers patent injunction promise to escape antitrust fine

Oct 17, 2013
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Samsung has promised not to threaten rivals with injunctions over mobile standards-essential patents for the next five years, as the Korean firm attempts to evade antitrust penalties after being accused by Apple of misusing its 3G IP. According to Apple, while it offered to license the standards-essential technology for use in the iPhone, Samsung instead tried to have an injunction levied against the iOS device, which the European Union says could amount to antitrust behavior. Now, "Samsung has offered to abstain from seeking injunctions for mobile SEPs for a period of five years against any company that agrees to a particular licensing framework" the EU has confirmed.

If found guilty of misusing patents that are considered standards-essential, Samsung could face a considerable fine - up to 10-percent of its yearly revenue, in fact - and other penalties. As a result, the company has offered to commit to what it suggests are more liberal injunction processes for the next half-decade, around smartphone and tablet patents.

The proposed deal would see Samsung agree to a negotiation period of up to a year with any company wanting to license standards-essential technology. If, after those twelve months, no agreement could be settled, the two companies would agree to either a court decision or arbitrator to settle on FRAND terms.

"If the parties cannot agree on either submitting to court or arbitration, the parties will have to submit to arbitration" it's concluded. "An independent trustee would advise the Commission in overseeing the proper implementation of the commitments."

The proposals "will not affect Samsung’s distribution practices or production capabilities in any way" a spokesperson told Bloomberg Businessweek. "Samsung is committed to fair and reasonable licensing of our technologies and believes a balanced approach to patent licensing will promote innovations to the benefit of consumers and the industry. We are confident that the proposed commitments are a constructive reflection of this."

The EC has thrown open the doors to comments from third-parties on whether Samsung's proposals are sufficient, though it's unclear whether the length of time the company is promising to acquiesce for will be seen as acceptable. Its focus on arbitration, too, as the final default when no agreement can be found may lead to suggestions that it is attempting to avoid court decisions.

"I am looking forward to receiving the feedback of other market players on Samsung’s proposals" Joaquín Almunia, Commission Vice President in charge of competition policy, said today. "Enforcing patents through injunctions can be perfectly legitimate. However, when patents are standard-essential, abuses must be prevented so that standard-setting works properly and consumers do not have to suffer negative consequences from the so-called patent wars. If we reach a good solution in this case, it will bring clarity to the industry."


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