EU sets IPR precedent with Samsung, Motorola decisions

Samsung agreed not to pursue injunctions against companies it believes infringe its essential 3G smart device patents in the European Union for the next five years to appease EU antitrust officials, as the European Commission moved to bring an end to smartphone patent wars in the region.

In a related development, the Commission has also ruled that Motorola Mobility infringed competition rules by seeking an injunction on shipments of Apple devices in Germany, despite Apple having agreed that any dispute over fair, reasonable, and non-discriminatory (FRAND) terms would be settled by local courts.

Joaquín Almunia, the Commission vice president of competition policy, welcomed the two developments: "Our decision on Motorola, together with today's decision to accept Samsung's legal commitments, provides legal clarity on the circumstances in which injunctions to enforce standard essential patents can be anti-competitive."

Samsung committed to allow arbitrators or local courts to determine what constitutes FRAND pricing for its essential 3G smartphone and tablet patents in the event that direct negotiations with companies seeking to license the intellectual property fail after a year of discussion.

Essential patents are, by definition, considered necessary to produce 2G, 3G, and LTE smart devices, and the Commission requires companies holding those patents to license them at fair rates to prevent anticompetitive behaviour.

The Commission said Samsung's commitment provides safe harbour for potential licensees.

Meanwhile the Commission said Motorola Mobility abused its dominant position by using the threat of an injunction to force Apple into a settlement agreement that included restrictive conditions. The U.S. vendor agreed to waive its right to challenge the validity of Motorola's patents, or any infringement of them by Apple products.

Despite the ruling against Motorola, the Commission said it would not fine the company because there is currently no precedent by which European courts can decide on the legality of essential patent injunctions.

The Motorola decision, however, "should set a precedent and provide guidance to the industry," the Commission said.

The European Telecommunications Standards Institute (ETSI) has declared at least 1,300 patents 'essential' to GSM, and close to 3,000 for 3G technology.

"The protection of intellectual property and competition are both key drivers of innovation and growth. This is why it is essential that intellectual property is not misused to the detriment of healthy competition," Almunia commented.

For more:
- see the European Commission statement on Samsung
- see the Commission's Motorola Mobility ruling
- see this summary of the cases

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