September 27, 2013 10:01 pm

Samsung strikes initial deal over Brussels patent probe

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Samsung has reached a provisional antitrust deal with Brussels to settle an investigation into the South Korean group’s alleged deployment of patent injunctions to abuse its dominant position.

The European Commission served Samsung with formal charges in December for unjustifiably demanding that courts stop Apple using a 3G wireless technology deemed essential for the rest of the smartphone industry.

Joaquín Almunia, the EU’s antitrust chief, announced on Friday that he had received formal commitments from Samsung, which were strong enough to seek feedback from other market players.

“After lengthy discussions, Samsung has sent us a set of commitments seeking to address our concerns,” Mr Almunia said, adding that a so-called “market test” would follow in coming weeks.

While the details are not yet disclosed, the Samsung offer includes legally binding promises on how it will treat licensees that have no choice but to use essential patents, including a clearer definition of when that licensee is seen as willing to negotiate fair payment terms.

The case is one of Brussels’ most active attempts to better define and police EU competition law on patents, so it can help mitigate consumer fallout from the legal battles raging between Apple, Samsung, Microsoft and Google. Mr Almunia said a settlement would “bring clarity” on patents and injunctions “across the industry”.

Last May the commission also served a “statement of objections” against Google’s Motorola Mobility unit for seeking abusive injunctions in Germany to stop Apple using a wireless patent that is an industry standard. A hearing on the case is scheduled for Monday.

Brussels’ concern over the use of injunctions on “standard essential patents” to gain commercial advantage is particularly focused on cases where there is a willing counterparty that wants to pay to use the technology.

This is underscored by a fear that the threat of injunctions alone will harm competition and tilt licensing negotiations in favour of patent-holders looking to extract higher royalties.

In his speech, Mr Almunia said Samsung “committed to a standards body to license its standard-essential patents to market participants in return for reasonable remuneration.

“But later, the company sought injunctions based on those patents although in our view there was a willing licensee.”

Without disclosing details of the settlement, Samsung said the offer “will provide appropriate resolution to reduce uncertainties” and said it would confirm the group’s “longstanding commitment to fair and reasonable licensing of our technologies”.

“Samsung has always preferred to compete in the marketplace, not in courtrooms, and we will continue to invest in our intellectual property rights to promote innovations to benefit consumers and the industry,” the company’s spokesperson said.

The talks were extended and at times difficult. Mr Almunia publicly made clear that Samsung’s first offer to settle did not go far enough. Mr Almunia followed through with charges against Samsung in spite of the group unexpectedly dropping its requests to ban the sale of Apple’s products from retail outlets in Europe.

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