Some much-needed clarity might finally come to the smartphone patents world, after two years of destructive fighting between the major players in law courts and regulatory bodies. The European Union’s Competition Commissioner, Joaquin Almunia, says investigations of Samsung and Google’s Motorola Mobility unit are close to completion, which could result in rulings that set important precedents elsewhere.
While Apple, which kicked off the recent war to gain smartphone power via patent lawsuits, has mainly focused on IPR for design, or for technologies which are not fundamental to industry standards, its rivals’ strengths often lie in SEP (standards essential patents). These raise far more complex issues when their holders negotiate licensing deals or go to court, because SEP is supposedly governed by the principles of Frand (fair reasonable and non-discriminatory) fees. However, these principles are ill-defined, a disastrous situation which could be eased somewhat if the European Commission makes some decisive judgements in its probes of Samsung and Motorola.
Google acquired Motorola’s handset unit mainly for its huge IPR mountain, which includes many technologies which are included in basic standards for mobile communications. Samsung, Nokia and Ericsson are other companies with huge reserves of SEP, giving them significant licensing revenues as well as a degree of influence on global technologies which Apple, for all its power, lacks. While Microsoft’s deal to acquire Nokia’s cellphone business does not include most of the Finnish company’s IPR, the two partners have tended to act as one when it comes to mobile patents.
Microsoft, which has had its share of judgements at the EC, has been a major player in the recent smartphone patent wars and, while it has achieved licensing agreements with most Android vendors for the IPR it has in the OS, it remains at war with Google/Motorola. Other important battles are between Apple and Samsung, and Apple and Google/Motorola, all of which could be influenced by an EC decision.
Almunia promised at an event in Italy last week that the EC’s approach to SEP will be ‘clarified’ in the two separate key cases, both of which focus on whether the handset makers abused their strong IPR position to gain unfair market advantage. Both vendors have been accused by rivals of departing from Frand principles and imposing unfairly high licensing terms on competitors.
The Commissioner added that the decisions were ‘in the pipeline’, though he did not give a precise date and said the timing was down to several factors, ‘not only on the Commission side.’
Alumnia has already sent statements of objections to Samsung and Motorola Mobility, outlining the EC’s concerns about possible antitrust violations. He has previously said his aim is to set clear ‘rules of the game’ in this area. He told reporters on Friday: ‘We have some other [cases] in the pipeline but not as advanced as these two.’
Samsung is said to be in advanced talks with the EU on a settlement which would see it offering more concessions in order to avoid sanctions. The Korean giant has been told by the competition agency to revise its terms in order to avoid potential fines of 10% of 2012 global revenue ‘ about $18.3bn. It previously failed to ward off the EU’s actions when it announced that it planned to withdraw claims for injunctions against Apple products in Europe, claims which were based on alleged infringements of its 3G patents, many of them standards essential.
The EU went ahead with the investigation of Samsung anyway, and opened a similar probe into Motorola Mobility in April 2012, following complaints by Microsoft and Apple.