Antitrust Law Daily Wrap Up, TOP STORY: Antitrust Division closes investigation into Samsung’s use of standards-essential patents, (Feb 7, 2014)

By Jody Coultas, J.D.

The Department of Justice Antitrust Division announced today that it has closed its investigation into Samsung Electronics Co. Ltd.’s use of its portfolio of standards-essential patents (SEPs) that it had committed to license to industry participants on fair, reasonable, and non-discriminatory (FRAND) terms to exclude certain Apple, Inc. iPhone and iPad products from the U.S. market.

Samsung allegedly attempted to use its SEPs to obtain exclusion orders from the U.S. International Trade Commission (ITC) relating to certain iPhone and iPad models. According to the Justice Department and the Patent and Trademark Office, a number of competitive issues arise when holders of SEPs seek to block their competitors from selling products that implement the SEPs.

The U.S. Trade Representative (USTR) reviewed the ITC exclusion order against Apple at Samsung’s request and overturned it, finding that it was not consistent with the public interest. Therefore, the Antitrust Division determined that no further action was required and closed its investigation. The Antitrust Division will continue to monitor further developments in this area.

“Throughout the investigation, the Antitrust Division has worked closely and consulted frequently with its colleagues at the European Commission,” according to the closing statement. “This cooperation underscores the agencies’ common concerns over the potential harm to competition that can result from the anticompetitive use of SEPs.”

Last fall, Samsung proposed a number of commitments in order to resolve European Commission concerns that Samsung violated EC competition rules by seeking injunctions against Apple on the basis of alleged infringements of its mobile phone SEPs. The EC invited comments on the commitments, under which Samsung proposed to refrain for five years from seeking such injunctions on the basis of its SEPs related to technologies implemented in smartphones and tablets against licensees that agree to a particular licensing framework. The framework consisted of (1) a negotiation period of up to 12 months and (2) if no agreement is reached during those 12 months, a third party determination of FRAN terms by either a court or an arbitrator, as agreed to by the parties.

Companies: Samsung Electronics Co. Ltd.

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