Samsung Electronics Co. Ltd. has told the European Commission that it will limit attempts to enjoin infringers of its standard-essential patents for five years in exchange for the EC’s ending an antitrust investigation into the company’s assertion of its patents rights against Apple Inc. The Commission believes that Samsung sought to enjoin Apple, even though the rival was willing to pay a reasonable royalty. Samsung dropped its request for an injunction against Apple, but the EC has continued its antitrust investigation.
Specifically, Samsung proposed that it would not seek injunctions in Europe if the alleged infringer agreed to (1) negotiate for up to a year and (2) permit a third party to determine what constituted a fair royalty rate if an agreement can’t be reached. Further, if the parties can’t agree on who should set the royalty, Samsung pledged to arbitrate the issue.
The Commission will consider competitor comments before deciding whether Samsung’s use of standard essential wireless patents constituted an anti-competitive abuse of its dominant market position. EU Competition Commissioner Joaquin Almunia issued a statement acknowledging that “[e]nforcing patents through injunctions can be perfectly legitimate.” He added, “[h]owever, when patents are standard-essential, abuses must be prevented so that standard-setting works properly and consumers do not have to suffer negative consequences from the so-called patent wars. If we reach a good solution in this case, it will bring clarity to the industry.”
The Commission is also investigating Google Inc.’s Motorola Mobility based on that company’s use of essential patents. Motorola reached an agreement with the Federal Trade Commission in the U.S. that resembles Samsung’s EU proposal, except the Motorola/FTC arrangement had no time limit.