Samsung investigated over enforcement of patents essential to 3G standards

Out-Law News | 02 Feb 2012 | 11:58 am | 1 min. read

The European Commission is investigating whether a major electronics company abused a position of market dominance by failing to let rivals use "essential" mobile phone technology it owned patent rights for on legitimate terms.

The Commission said that Samsung was obliged to licence the use of patents relating to 3G mobile and wireless technology to rivals on fair, reasonable and non-discriminatory (FRAND) terms but may have breached this requirement when trying to enforce its patent rights against those rivals in court. It said it had opened a "formal investigation" into whether Samsung's activity distorted competition in the mobile phone industry.

"In 2011, Samsung sought injunctive relief in various Member States' courts against competing mobile device makers based on alleged infringements of certain of its patent rights which it has declared essential to implement European mobile telephony standards," the Commission said in a statement.

"The Commission will investigate, in particular, whether in doing so Samsung has failed to honour 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 non-discriminatory (FRAND) terms. The Commission will examine whether such behaviour amounts to an abuse of a dominant position prohibited by Article 102 of the Treaty on the Functioning of the EU (TFEU)," it said.

The Commission is responsible for investigating possible abuses of dominant market position under the TFEU. Last year it asked both Samsung and Apple to provide information relating to the "the enforcement of standards-essential patents in the mobile telephony sector," Reuters news agency reported at the time.

Standards are agreed technical specifications to ensure that a single technology is used across an industry, often with the goal of achieving interoperability of products regardless of the manufacturer. Companies can opt to send experts to help develop standards but, in return, most standards setting organisations insist that companies agree to licence any intellectual property they own that is essential to implementation of that standard on FRAND terms.

The Commission said that companies that take part in standardisation schemes must licence the use of the technology on FRAND terms "in order to guarantee undistorted competition" and so the "positive economic effects" can be gleaned from the process.

Samsung has been embroiled in legal battles around the world with US software giant Apple with both companies claiming the other has infringed its intellectual property rights. Apple has accused its rival of infringing design rights it owns for its iPad tablet. It has said Samsung had engaged in "blatant copying" in its design of its Galaxy Tab 10.1 device.

Samsung has also sued Apple over the use of its patents. Apple previously claimed that this is an attempt by its rival to "coerce" it into "tolerating" Samsung's "imitation" of its iPad.

Last year the EU's Competition Commissioner raised concerns that technology companies could use standardisation and IP rights as tools of abuse to stifle competition.