Samsung offer on patents isn't enough, warns EC antitrust chief
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Version 0 of 1. Samsung's offer to hold back in Europe from seeking sales injunctions against rivals which use its standards-essential patents (SEPs) for five years is insufficient, Europe's antitrust chief says. Joaquin Almunia, the European commission's vice president in charge of the Competition group, said in a speech on Monday that he will "discuss with Samsung possible improvements to their commitments in the coming weeks". He also warned Finland's Nokia that it should not become a "patent troll" after the sale of its handset division to Microsoft is completed and it seeks to monetise its patent hoard. Almunia was blunt in his criticism of previous actions by Samsung and Google's Motorola subsidiary, which have respectively sought sales bans in Europe against Apple's iPhone and iPad, and Microsoft's Xbox. "To repeat and to put it very simply, I believe that injunctions should not be available when there is a willing licensee," he said. In December 2012 Almunia's team raised a formal "Statement of Objections" against Samsung's attempt to use the SEPs it holds in 3G connectivity standards to block sales by Apple. That means Samsung could potentially be fined up to 10% of its worldwide annual revenue - amounting to £10bn - if it does not satisfy the EC's concerns over its behaviour. Essential licensing SEPs form the basis of standards such as 3G, Wi-Fi, and so on, which can include hundreds of patents. Companies whose patents are used in standards are required by standards bodies to license them on "FRAND" - fair, reasonable and non-discriminatory - terms, so that a standard can be used as widely as possible. While FRAND per-patent payments are typically tiny compared to those which can be extracted for a non-standard patent, that is balanced by the income from broader use. The EC's antitrust division has intervened over Samsung and Motorola's behaviour because SEPs constitute a form of monopoly: if a company could not license them, it would be locked out of offering standards-compatible products. Almunia has repeatedly said that using SEPs to block sales if a company is willing to pay a FRAND rate constitutes a breach of antitrust rules. Almunia previously said that he considered Samsung had abused its position as the holder of an SEP: "The Commission considers on a preliminary basis that Apple was willing to enter into a licensing agreement on FRAND terms for Samsung's SEPs. However, Samsung started judicial proceedings seeking injunctions against Apple." Samsung's offer, made in October, was to pause for five years in seeking injunctions - but not to abandon doing so altogether in future. The proposal was described as "full of loopholes" by the patents blogger Florian Müller, and "sneaky" by Yankee Group analyst Boris Melodiev, on the basis that such disputes typically take years to play out - so that the five-year time limit might run out during a dispute and leave would-be licencees vulnerable. Warning to Nokia Almunia also warned Nokia that it should not abuse its ownership of SEPs in the mobile industry. "If Nokia were to take illegal advantage of its patents in the future, we will open an antitrust case – but I sincerely hope we will not have to," he commented. Some concerns have been raised that the same of its handset division to Microsoft will mean that Nokia will be able to raise the prices it demands for its patents - both SEPs and non-essential patents. "These claims fall outside the scope of our review [of the sale to Microsoft]", Almunia said. "When we assess a merger, we look into the possible anti-competitive impact of the company resulting from it. We cannot consider what the seller will do." It would not be unlawful to refuse to license a non-essential patent, nor to demand a high price for one. But Almunia noted that companies which hold and monetise patents - often called "patent trolls" in the US - are a growing concern. "You can rest assured that we are watching this space very carefully. DG competition will hold patent trolls to the same standards as any other patent holder," he said. Unlink, Google told Almunia said that he has told Google not to discriminate against companies which don't want it to use their content in its specialised search results. "Google creates a link between getting the right to use material from other sites on its specialised search services and the appearance that these sites have on Google's general search results – a practice that allows Google to benefit from investments made by other firms. "I have asked Google to sever this link to restore competitive incentives. This competition issue is irrespective of the IP situation because it is about the link that Google creates between general searches and specialised ones – such as when you look for news, items to buy online, and restaurants in your area." But he said that his powers did not extend to telling Google how it could use publishers' content. Almunia is conducting an antitrust investigation into Google's monopoly position in Europe. Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |