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US DOJ ceases investigation of potential Samsung FRAND patent abuse

updated 04:31 pm EST, Fri February 7, 2014

DOJ shut down inquiry, claiming that Presidential embargo veto sufficient

Following the ITC-ordered embargo of Apple products and subsequent Presidential veto, the US Justice Department commenced an investigation of Samsung, and its use of standards-essential patents (SEPs) as a legal weapon. Declining any action, the Department of Justice is closing the investigation, but noted that Samsung was guilty of abusing SEPs legally, and that it would keep monitoring patent lawsuits filed by the Korean electronics manufacturer.

Samsung won an embargo against Apple's iPhone 4 and iPad 2 based on apparent violations of CDMA mobile communication system patents in June. President Obama overturned the embargo, citing the effects on the economy and consumers of embargoes based on SEPs as his primary motivations. The Obama administration has repeatedly said that companies should "rarely" seek judicial solutions to SEP licensing issues.

Samsung says it has never refused licensing standards essential patents. In its filing which induced the embargo, it says that "Samsung has always honored its commitment to license its declared-essential patents on Fair, Reasonable and Non-Discriminatory (FRAND) terms and conditions. Samsung has never refused to license its SEPs to other companies, including direct competitors like Apple. And Samsung has never offensively used its patents, essential or not, to keep competitors out of the market." Not addressed in Samsung's statement is the fact that no jurisdiction worldwide has thus far found its consistent demand for 2.4 percent of a device's entire sale price for each SEP patent used an acceptable FRAND rate.

Patent analyst Florian Mueller found the original ITC ruling disagreeable and controversial, agreeing that SEPs shouldn't be used in litigation or as leverage over other licensing deals. Mueller stated that "there's nothing that would have stopped Samsung from asking a district court to award damages for past SEP infringement and postjudgment royalties for future use. That's what Samsung could and should have done instead of seeking an ITC import ban."

The Department of Justice pointed to President Obama's veto and reasoning as the reasons behind shutting down the investigation. "The Antitrust Division is therefore closing its investigation into Samsung's conduct, but will continue to monitor further developments in this area," the division said in a statement.

by MacNN Staff



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