After launching a formal investigation almost a year ago, the European Commission sent a Statement of Objections (SO) to Samsung on 21 December 2012. The Commission is taking a preliminary view that Samsung’s actions seeking injunctive relief against Apple in various EU countries based on its telecom standard essential patents (SEPs) amount to an abuse of a dominant position. The Commission takes the view that “under the specific circumstances of this case, where a commitment to license SEPs on [Fair Reasonable and Non-Discriminatory (FRAND)] terms has been given by Samsung, and where a potential licensee, in this case Apple, has shown itself to be willing to negotiate a FRAND licence for the SEPs, then recourse to injunctions harms competition.”
The Commission’s preliminary objections reflect the approach that it took in its decision in Google/Motorola where it found that “[d]epending on the circumstances, it may be that the threat of injunction, the seeking of an injunction or indeed the actual enforcement of an injunction granted against a good faith potential licensee, may significantly impede effective competition by, for example, forcing the potential licensee into agreeing to potentially onerous licensing terms which it would otherwise not have agreed to.” In essence, the Commission is taking the view that seeking an injunction to enforce SEPs may be abusive when the injunction is sought against a ‘good faith’ potential licensee willing to negotiate a FRAND licence.
In response to the SO Samsung responded that it “has been and remains committed to licensing its [SEPs] on [FRAND] terms” and that it had “no choice” but to ask for injunctions based on its SEPs “due to Apple’s unwillingness to enter into good-faith negotiations and to defend [itself] against Apple.”
The SO came out just a few days after Samsung unilaterally and voluntarily withdrew all of its requests for injunctive relief against Apple relating to SEPs in its actions before courts in Germany, France, the U.K., Italy and the Netherlands.
The SO does not prejudge the outcome of the case. The Commission will make a final decision after the parties have exercised their rights of defence by a written submission and/or an oral hearing to present comments.
The case should be considered also in the context of the broader focus of competition authorities on both sides of the Atlantic on the scope and implications of FRAND commitments offered by SEP right holders. (See our previous post.) Further, in November, the Commission’s DG Internal Market and Services launched a public consultation seeking input on the use of injunctions for anti-competitive purposes in the context of its efforts to improve the IP enforcement framework. (See our previous post.)