On 29 April 2014, the European Commission adopted two antitrust decisions that concern the enforcement of patents by Motorola and Samsung which are essential to two telecom standards, so-called standard essential patents (‘SEPs’), for the second and third generation standards (commonly known as ‘GSM’ and ‘3G’).
The two decisions provide guidance to the industry on the competition law limits of using SEPs to exclude competitors from the market or to extract disadvantageous licensing terms.
The two decisions clarify how EU competition rules apply to the strategic use of SEPs by establishing that the seeking and enforcing of injunctions may infringe Article 102 TFEU when two conditions are met:
- first, a dominant SEP holder has given a commitment to license on FRAND terms during standard- setting;
- and second, the potential licensee is willing to enter into a licence on FRAND terms.
Further to Motorola decision, the Commission establishes that a potential licensee is to be considered willing if, in case of dispute, it agrees to a determination of FRAND terms by a court. This constitutes a ‘safe-harbour’ against SEP-based injunctions for potential licensees who remain entitled to challenge the validity and infringement of the SEPs.
Instead, referring to Samsung Decision, the Commission’s Samsung commitments decision is an implementation of this ‘safe-harbour’ concept. Samsung committed not to seek injunctions for the next five years in the EEA against any potential licensee who agrees to accept a specific, market-tested licensing framework.