The European Commission is seeking feedback on commitments offered by Samsung to address competition concerns regarding the use of Standard Essential Patents (SEPs).The backgroundSamsung owns several
The European Commission is seeking feedback on commitments offered by Samsung to address competition concerns regarding the use of Standard Essential Patents (SEPs).
The background
Samsung owns several SEPs which relate to mobile telecommunications standards. Samsung committed to licensing these patents on terms that are fair, reasonable and non discriminatory (FRAND). Apple entered into negotiations to license the patents under FRAND terms. However, negotiations failed and Samsung commenced judicial proceedings seeking an injunction to prevent Apple infringing their patents.
The Commission expressed a provisional view that Samsung had abused a dominant market position, prohibited under Article 102 of the Treaty on the Functioning of the European Union (TFEU). The Commission did so on the basis that where a commitment to license SEPs on 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. To address the Commission's concerns Samsung has proposed several commitments.
The Commitments
The purpose of the commitments is to ensure that potential licensees, negotiating in accordance with a licensing framework, will not be subject to injunctive relief should the parties fail to agree FRAND terms. In their commitments document Samsung include commitments proposing that:
Submissions on the Commitments
The commitments have the potential to affect not only the terms and bargaining positions of parties seeking to negotiate SEP licenses with Samsung, but also any subsequent customers of those licensees due to adjusted license fees incorporated into any sales agreement. Therefore, it is important that businesses involved in telecommunications examine the commitments and the invitation to negotiate and evaluate their impact on SEP license fees they may be directly or indirectly exposed to.
The deadline for submissions to the Commission is 17 November 2013.
Samsung's Commitments, including their Invitation to Negotiate, can be found here.
The Commission's press release, including instructions on submitting observations, can be found here.
The background
Samsung owns several SEPs which relate to mobile telecommunications standards. Samsung committed to licensing these patents on terms that are fair, reasonable and non discriminatory (FRAND). Apple entered into negotiations to license the patents under FRAND terms. However, negotiations failed and Samsung commenced judicial proceedings seeking an injunction to prevent Apple infringing their patents.
The Commission expressed a provisional view that Samsung had abused a dominant market position, prohibited under Article 102 of the Treaty on the Functioning of the European Union (TFEU). The Commission did so on the basis that where a commitment to license SEPs on 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. To address the Commission's concerns Samsung has proposed several commitments.
The Commitments
The purpose of the commitments is to ensure that potential licensees, negotiating in accordance with a licensing framework, will not be subject to injunctive relief should the parties fail to agree FRAND terms. In their commitments document Samsung include commitments proposing that:
- they will not seek injunctive relief for infringement of their SEPs relating to mobile communications where a potential licensee has signed and returned an invitation to negotiate.
- a period of negotiation will exist for 12 months, after which a decision as to FRAND terms will be referred to a third party (either court adjudication or arbitration).
- a Monitoring Trustee will be appointed, who shall monitor Samsung's compliance with the commitments.
- the commitments will be applicable for 5 years.
Submissions on the Commitments
The commitments have the potential to affect not only the terms and bargaining positions of parties seeking to negotiate SEP licenses with Samsung, but also any subsequent customers of those licensees due to adjusted license fees incorporated into any sales agreement. Therefore, it is important that businesses involved in telecommunications examine the commitments and the invitation to negotiate and evaluate their impact on SEP license fees they may be directly or indirectly exposed to.
The deadline for submissions to the Commission is 17 November 2013.
Samsung's Commitments, including their Invitation to Negotiate, can be found here.
The Commission's press release, including instructions on submitting observations, can be found here.