In the latest development in the smartphones war, the European Commission has now issued two decisions in respect of standard essential patents (SEPs), fair, reasonable and non-discriminatory (FRAND) commitments and anti-competition rules. The Commission started two investigations in 2012 after Motorola and Samsung both tried separately to enforce SEPs against Apple in Europe. The decisions for these two investigations have now been published and provide a welcome clarification as to what could amount to an abuse of dominant position when dealing with SEPs.
The key points of the decisions are summarised below:
- Seeking an injunction for a SEP is not automatically anti-competitive.
- However, if a potential licensee is willing to take a FRAND SEP-licence, seeking an injunction would amount to anti-competitive behaviour.
- A framework where a potential SEP-licensee agrees to have the FRAND terms of the licence determined by a court or an arbitrator, if no agreement can be found, provides a safe-harbour for the potential licensee to show willingness.
- The framework proposed by Samsung (1. a negotiation period of up to 12 months; 2. if no agreement is reached, a determination of FRAND terms by a court or by an arbitrator and 3. a commitment not to seek injunctions for five years against parties agreeing to 1. and 2.) is considered by the Commission as complying with the European Union’s competition regulations.
- Forcing a SEP-licensee to waive its right to challenge validity or infringement amounts to anti-competitive behaviour.