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EU competition watchdog investigates Samsung and Apple patent dispute

The European Commission has asked two leading global software companies for information about their patent licensing agreements in order to establish if there has been any anti-competitive behaviour.08 Nov 2011

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). It said it had requested information from Apple and Samsung about "the enforcement of standards-essential patents in the mobile telephony sector," according to Reuters news agency.

"Such requests for information are standard procedure in antitrust investigations to allow the Commission to establish the relevant facts in a case. We have no other comments at this stage," the Commission said, according to Reuters' report.

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 (FRAND)

The Commission has previously outlined plans to revise the rules over standards-setting agreements.

In legal filings submitted in the US Apple said that legal action taken by Samsung around the world sought to prevent it using patents Samsung owned. Apple has also recently sued Samsung over the "blatant copying" of its iPad design in the rival's Galaxy Tab 10.1 computer.

"Samsung's efforts to coerce Apple into tolerating Samsung's imitation have not been limited to the counterclaims here [in California]," Apple said, according to Florian Mueller, patent law blogger.

"Samsung has launched an aggressive, worldwide campaign to enjoin Apple from allegedly practicing Samsung's patents. Samsung has sued Apple for infringement and injunctions in no fewer than eight countries outside the United States. Indeed, Samsung's litigation campaign and other conduct related to its Declared-Essential Patents is so egregious that the European Commission recently has opened an investigation to determine whether Samsung's behaviour violates EU competition laws. Apple brings these Counterclaims In Reply to halt Samsung's abuse and protect consumers, the wireless telecommunications industry, and Apple from further injury," Apple's legal filing said, according to Mueller's blog.

Samsung said its "standards-related" patents are available on legitimate terms.

"Samsung has at all times remained committed to fair, reasonable and non-discriminatory licensing terms for our wireless standards-related patents," the company said, according to Mueller's blog.

"We have received a request [for information from the] Commission and are cooperating fully. Note that this is a preliminary investigation and the European Commission has not yet determined whether to conduct a full investigation," it said.

Deborah Bould, a partner at Pinsent Masons specialising in patent litigation in the technology sector, said the tactic adopted by Apple is a normal approach when faced with a standards essential patent claim. 

"The Commission’s renewed interest in the technology sector is much more interesting," Bould said. 

"Also, the Commission is getting interested in IP disputes again; it is currently also investigating the so-called “pay for delay” patent settlements achieved in the pharmaceuticals space," she said.

"In the technology sector, the Commission has previously investigated Rambus Inc regarding their patent licensing royalty rates charged for Dynamic Random Access Memory chipsets.  The Commission was concerned that Rambus was abusing a dominant market position by over charging royalties.  In 2009, Rambus undertook to put a worldwide cap on its royalty rates to resolve this investigation.  Rambus had been accused of a 'patent ambush', by failing to declare relevant IP during the standards setting process.  No one is accusing Samsung or Apple of that behaviour; the focus instead is much broader, on whether their proposed licensing terms are FRAND.  This is a very important question for the industry," Bould said.

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