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EU hits Samsung with patent abuse charges in Apple case

The European Commission has accused Samsung of patent abuse in its dealings with Apple.

According to the commission, the patents in question cover standard-essential technology, and Samsung has an obligation to license them on fair, reasonable, and non-discriminatory (FRAND) terms. Instead, Samsung has sought injunctions against Apple products that incorporate Samsung's patented technology for a 3G UMTS standard rather than offer Cupertino fair licensing terms.

Joaquín Almunia, vice president of competition policy at the commission, said "intellectual property rights ... should not be misused when they are essential to implement industry standards, which bring huge benefits to businesses and consumers alike."

"When companies have contributed their patents to an industry standard and have made a commitment to license the patents in return for fair remuneration, then the use of injunctions against willing licensees can be anti-competitive," he continued.

"The European Commission announced today that it sent to Samsung a Statement of Objections regarding the enforcement of standard essential patents," a Samsung spokesman said in a statement. "We are studying the statement and will firmly defend ourselves against any misconceived allegations. We will continue to fully cooperate with the Commission. Samsung is confident that in due course the Commission will conclude that we have acted in compliance with European Union competition laws."

The disconnect appears to be over what is considered fair and reasonable terms. A price thought to be fair by Samsung is likely considered far too expensive by Apple. As a result, Samsung has opted to file suit and request injunctions when negotiations break down.

Samsung recently announced, however, that it will withdraw all its injunction requests in Europe.

"Samsung remains committed to licensing our technologies on fair, reasonable and non-discriminatory terms, and we strongly believe it is better when companies compete fairly in the marketplace, rather than in court," the company said earlier this week. "In this spirit, Samsung has decided to withdraw our injunction requests against Apple on the basis of our standard essential patents pending in European courts, in the interest of protecting consumer choice."

The EU first announced that it was investigating allegations of patent abuse in January.

Apple and Samsung have, of course, been suing each other over patents all over the globe for almost two years. The EU is concerned about Samsung rather than Apple, however, because Samsung's patents cover technology that are necessary for the operation of devices that many consider to be essential to daily life.

Those patents "relate to the European Telecommunications Standardisation Institute's (ETSI) 3G UMTS standard, a key industry standard for mobile and wireless communications," the EU said. "When this standard was adopted in Europe, Samsung gave a commitment that it would license the patents which it had declared essential to the standard on FRAND terms. In 2011, Samsung started to seek injunctive relief before courts in various Member States against Apple based on claimed infringements of certain of its 3G UMTS SEPs."

This statement of objections is a formal step in commission investigations. The EU will inform those involved in writing, and they then have the option of responding in writing or requesting an oral hearing. The EU will then make a final determination, which could ban the offending conduct or include a fine of up to 10 per cent of a company's annual worldwide turnover.