EU snaps on glove, starts formal antitrust probe of Samsung
Korean firm may be abusing 3G standards with Apple lawsuits
The European Union has formally started an antitrust investigation of Samsung over its use of standards-related 3G patents in its patent battles around the world.
The Korean firm has brought lawsuits against Apple in a number of European countries, alleging patent infringement of 3G intellectual property it holds. However, 3G patents are usually standards-related, which means that companies holding them have to issue them to other firms on fair, reasonable and non-discriminatory (FRAND) terms.
As part of establishing the 3G standard, Samsung entered into an agreement with the European Telecommunications Standards Institute (ETSI) to license its 3G patents.
"The European Commission has opened a formal investigation to assess whether Samsung Electronics has abusively, and in contravention of a commitment it gave to the ETSI, used certain of its standard essential patent rights to distort competition in European mobile device markets, in breach of EU antitrust rules," the commission said in a canned statement.
Samsung has been trying its hand with 3G patent infringement suits in Europe, but hasn't had much luck so far. The mobile-maker tried to get iPhone 4S bans in France and Italy, which were both denied, and German courts have shot down two of the firm's 3G patent gripes in Germany. The Dutch court also came down on the side of FRAND in Samsung's case against Apple in the Netherlands.
Late last year, the European Commission started to get concerned about Samsung's 3G suits and said it had requested information from both Apple and Samsung on the issue.
"Standardisation and IP rights are two instruments that in this new IT sector can be used as a tool to abuse," EU competition commissioner Joaquin Almunia said in November.
A Samsung spokesperson told El Reg: “Samsung Electronics has not received any formal notice and is unable to discuss the matter at this time.” ®
It may well be (it is as I understand it) that Samsung's "fair and reasonable non discriminatory" license terms include a mandatory cross licensing of all mobile patents. That's how the patent MAD game is supposed to work, and everyone else would have had no problems with that. Consequently it is "fair", "reasonable" and "non discriminatory".
Apple comes to the game and feels it has a load of innovative touchscreen and smartphone related patents that it does not want to cross license with anyone. They are finding out that is not how the game is played and look like they are about to get screwed over massively for being greedy.
Define 'Fair and Reasonable'
If Samsung have already licensed their patents to other firms who have agreed their price is indeed fair and then offered them to Apple at the same rate that seems fair. If Apple have refused the same terms offered to other manufacturers then it is Apple being unreasonable. As far as I understand it from various reports this is the case and Apple are the ones who have thrown their toys out of the pram because Samsung wouldn't give into their unreasonable demands to get a lower rate than other companies. Samsung quite rightly have stood their ground and said they don't care how big Apple are, they pay the same rates as everyone else.
If that isn't the case and Samsung are trying to charge Apple more than other companies then of course they are in the wrong, although given Apples attitude towards them recently I don't blame them for trying it on.
From the coverage I've read, I think this is allowed for under the rules of the FRAND licensing. If a party refuses the offered and "normally" agreed terms under FRAND. Then the owner of the original IP is no longer bound by the FRAND rules.
Apple have claimed all along that they have no need to license any of this technology and so have refused the FRAND terms offered by Samsung and many others (I'm sure there were articles here about Nokia having a go about this when the iPhone first came out).
Apple is now trying to say to Samsung, well if we must pay we only want to pay you what you asked for first.
Samsung is saying "No, you didn't want those terms so they aren't on the table any longer" you have to start from scratch and since you've already broken what we think the rules are why should we be nice particularly when you are trying to screw us everyway you can think of".
As you say, from the time Apple agree to the the FRAND rules, the royalties on the IP are set out and that is all they need to pay.
Its going to be fun to see how this plays out (or pays out)