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Technology companies can stifle competition through use of IP rights, EU Commissioner says

Out-Law News | 24 Nov 2011 | 12:25 pm | 1 min. read

The EU's Competition Commissioner has raised concerns that technology companies can use intellectual property (IP) rights to stifle competition.

Joaquin Almunia said businesses in the "IT sector" can use IP rights to "restrict competition," according to Reuters news agency.

"Standardisation and IP rights are two instruments that in this new IT sector can be used as a tool to abuse," he said, according to the Reuters report.

Almunia said that Apple and Samsung have still to provide the European Commission with "answers" to its request for information about their patent licensing agreements. The Commission is responsible for investigating competition-restricting agreements and abuse of dominant market position under the Treaty on the Functioning of the European Union (TFEU). Earlier this month it requested information from Apple and Samsung about "the enforcement of standards-essential patents in the mobile telephony sector".

"We requested information from both Apple and Samsung. We have not yet received the answers. We need to look at this because IP rights can be used as a distortion of competition but we will need to look at the answers," Almunia said.

"In particular, in the IT sector, it is obvious it is not the only case. Apple and Samsung is only one case where IP rights can be used as an instrument to restrict competition," he said.

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 fair, reasonable and non-discriminatory terms.

Apple and Samsung have been embroiled in legal battles around the world relating to alleged infringement of each other's IP rights.

Apple has accused its rival of infringing design rights it owns for its iPad computer. Apple accuses Samsung of "blatant copying" in how Samsung has designed its Galaxy Tab 10.1 device.

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

Samsung has defended its "standards-related" patents and has said it makes them available on legitimate terms.

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