FRAND abuse: Samsung Electronic’s EU antitrust settlement proposal stinks

“Europe’s antitrust chief said a few weeks ago that Samsung Electronics had submitted proposals for settling its patent-related antitrust case, and now the European Commission has published them for a one-month public consultation,” David Meyer writes for Businessweek. “In a nutshell, Samsung has proposed not abusing its so-called standards-essential patents (SEPs) in the mobile arena for the next five years.”

MacDailyNews Take: Ooh, the slavish copier promises not to break the law for a whole five years! What more could you ask for?

“In this case, without using Samsung’s patented technologies, you cannot make a 3G phone. That’s what makes this an antitrust case, and an important one at that,” Meyer writes. “Standards such as 3G comprise thousands of patents that are all essential to making the whole function, so when they are formalized, the companies that developed them agree to put them into a patent pool. The patents can still command a fee, but their holders must agree to license them to a willing licensee on fair, reasonable, and nondiscriminatory (or Frand) terms.”

“Which is precisely what didn’t happen in this particular Samsung-Apple dispute,” Meyer writes. “Although Apple was willing to pay Frand rates, Samsung wouldn’t play ball and instead decided to use the SEPs as legal weapons. And that’s where the EC stepped in, launching an investigation into Samsung’s patent abuse at the start of 2012. (Apple itself apparently did not make a formal complaint.)”

Meyer writes, “The big problem with Samsung’s settlement proposal is its five-year term… When Google settled with the U.S. Federal Trade Commission earlier this year over its own SEPs antitrust case, the FTC didn’t say it would be OK for Google to go back to breaking its commitments after a set period of time.”

Read more in the full article here.

Related article:
EU says Samsung offers to stop patent lawsuits in Europe in order to avoid $18.3 billion FRAND abuse fine – October 17, 2013


  1. I say again.

    Both Samsung and Google/Motorola have made $Billions by copying Apple IP. That is a separate issue.

    What is important here is that they have been seeking to charge Apple (and others) $Billions to use SEPs. They should be fined 3 times what they were seeking to extort from Apple (and others) and should be placed on probation and be required to have a representative of each of the standards organizations sit in on all their licensing negotiations to assure they follow the rules.

    Samsung and Google clearly need some independent adult supervision regarding SEPs. The US government has installed outside supervision at Apple regarding e-Book pricing and negotiations, so there is a clear precedent. The standards bodies need to levy a serious multi-billion dollar fine and then get someone in the room with Google and Samsung to make sure they follow the law.

    1. There’s an $18 billion max penalty waiting for them if they lose this. I’m not sure where that number came from, and I’m certain it will not be levied, but I can always dream, can’t I?

  2. I’ve long had the idea that FRAND patents should be controlled by a 3rd party who sells and distributes royalties accordingly. Standard essential patent should not be used as a weapon against competition which is exactly what Samsung is doing hoping Apple will settle by cross licensing non-SEP’s. I very seriously doubt Cook will cross license with Samsung given the battles to date. Giving in now would set the expectation they can copy and eventually get access to future non-SEP features.

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