DOJ Examining Samsung For FRAND Patent Licensing Antitrust Issues

October 24, 2012, by Mandour & Associates, APC

San Diego – The U.S. Department of Justice is investigating Samsung Electronics Co. for antitrust violations related to its licensing of standard-essential patents, Apple Inc. revealed in a Monday filing with the U.S. International Trade Commission.

The ITC administrative law judge overseeing a Section 337 patent case over the companies’ tablet and smartphone products was right to find to find that Samsung’s claims in the case failed on the patent merits, Apple said. The ALJ should have found, though, that Samsung was barred from even asserting its claims in the ITC due to its commitments to license its standard-essential patents on fair, reasonable and nondiscriminatory terms, according to Apple.

The ITC’s issuance of exclusion or cease and desist orders in matters involving FRAND-encumbered patents like those Samsung is asserting can cause substantial harm to competition, and Congress and the executive branch have taken notice, Apple says.

“Regulators likewise have continued to scrutinize these problems, including in the specific context of Samsung’s conduct: the Department of Justice has opened an investigation into the manner in which Samsung has used—or misused—its declared-essential patents, as has the European Commission,” Apple says.

The EC has been probing Samsung’s possibly anti-competitive use of standard-essential patents since January.

Apple also pointed to a June statement by the U.S. Federal Trade Commission noting the potential for competitive harm. It additionally highlighted a statement that same month by several members of Congress saying that allowing companies to commit license patents on FRAND terms and then seek an exclusion order despite a breach of that commitment would raise serious policy concerns.

At the hearing before the ALJ, Apple introduced extensive evidence that Samsung’s assertion of declared-essential patents was incompatible with Samsung’s FRAND commitments and the public interest.

“Allowing Samsung to renege on its FRAND commitments through the issuance of an exclusion order would have consequences extending beyond this case, and the harm to the public interest would be severe,” Apple says.

If the ITC decides to review the initial determination of non-infringement in the case, it should also address the statutory public interest factors that preclude issuance of an exclusionary remedy for “these FRAND-committed, untimely disclosed, exhausted patents,” Apple says.