EU hits Samsung with 'potential misuse' of patents

The Commission said that in its preliminary view, Samsung has engaged in "an abuse of a dominant position" by requesting injunctions in patent-infringement cases.

As expected, the European Union's European Commission (EC) has filed a formal "statement of objections" against Samsung over its actions in cases against Apple.

The EU's competition-governing body today announced that, in its "preliminary view," Samsung's requests for injunctions against Apple products over their alleged use of wireless patents Samsung owns "amounts to an abuse of a dominant position prohibited by EU antitrust rules."

Here's what Joaquin Almunia, the EC's competition chief, has to say about the move:

Intellectual-property rights are an important cornerstone of the single market. However, such rights should not be misused when they are essential to implement industry standards, which bring huge benefits to businesses and consumers alike. When companies have contributed their patents to an industry standard and have made a commitment to license the patents in return for fair remuneration, then the use of injunctions against willing licensees can be anticompetitive.

Samsung over the last couple of years has launched a flurry of patent-infringement claims against Apple, alleging that the iPhone maker violates patents it holds related to 3G connectivity. When Samsung has brought those claims to the court, it has asked for an injunction against Apple's allegedly infringing products.

According to the EC, those patents are standard-essential, meaning they must be offered on a fair, reasonable, and nondiscriminatory (FRAND) basis. The EC's preliminary findings have led it to question whether Samsung was following FRAND practices.

"Where a commitment to license SEPs on FRAND terms has been given by Samsung, and where a potential licensee, in this case Apple, has shown itself to be willing to negotiate a FRAND licence for the SEPs, then recourse to injunctions harms competition," the EC said today in a statement.

The European Union has been investigating Samsung since November 2011 . In January, the agency announced a formal investigation to determine whether Samsung "has failed to honor its irrevocable commitment given in 1998 to the European Telecommunications Standards Institute (ETSI) to license any standard essential patents relating to European mobile telephony standards on fair, reasonable, and nondiscriminatory (FRAND) terms." Just yesterday, Almunia said that his office would " issue a statement of objections very soon ."

A statement of objections is a formal, but not final, step in Commission investigations. The statement of objections is designed to inform a possibly infringing company of the issues the agency has discovered and give it an opportunity to reply in its own defense.

Whether Samsung actually saw this coming is unknown. However, earlier this week, the company announced that it had dropped requests to ban Apple products across several European countries, including Germany, the U.K., and France. Here's Samsung's full statement from earlier this week:

Samsung remains committed to licensing our technologies on fair, reasonable, and nondiscriminatory terms, and we strongly believe it is better when companies compete fairly in the marketplace, rather than in court. In this spirit, Samsung has decided to withdraw our injunction requests against Apple on the basis of our standard essential patents pending in European courts, in the interest of protecting consumer choice.

The EC has not made a final decision on its Samsung investigation. If, however, it does rule against Samsung, the company could face a fine of up to 10 percent of its annual sales.

CNET has contacted Samsung for comment on the EC's statement of objections. We will update this story when we have more information.

 

ARTICLE DISCUSSION

Conversation powered by Livefyre

Don't Miss
Hot Products
Trending on CNET

Hot on CNET

The Next Big Thing

Consoles go wide and far beyond gaming with power and realism.