Brussels, 29/04/2014 (Agence Europe) - On Tuesday 29 April, the European Commission ruled that Motorola Mobility's (Motorola) seeking and enforcement of an injunction against Apple before a German court on the basis of a smartphone standard essential patent (SEP) constitutes an abuse of a dominant position prohibited by EU antitrust rules in view of the particular circumstances in which the injunction was used. The Commission has ordered Motorola to eliminate the negative effects resulting from the injunction but has not fined the company given the absence of a legal framework and the fact that national court rulings on similar SEP injunctions vary widely.
SEPs are patents essential to implement a specific industry standard. It is not possible to manufacture products that comply with a certain standard without accessing these patents. This may give companies owning SEPs significant market power. As a result, standards bodies generally require their members to commit to license SEPs on fair, reasonable and non-discriminatory (so-called “FRAND”) terms. Seeking injunctions before courts is generally a legitimate remedy for patent holders in case of patent infringements. However, the seeking of an injunction based on SEPs may constitute an abuse of a dominant position if a SEP holder has given a voluntary commitment to license its SEPs on FRAND terms and where the company against which an injunction is sought is willing to enter into a licence agreement on such FRAND terms.
Motorola took Apple to court over some of its SEPs for the GPRS standard (part of the GSM standard), which is vital for mobile and wireless communications. The Commission has ruled that the injunction against Apple infringed the FRAND terms.
The Commission says that Motorola persisted in using the threat of an injunction to force Apple into a settlement agreement with very restrictive conditions.
“While patent holders should be fairly remunerated for the use of their intellectual property, implementers of such standards should also get access to standardised technology on fair, reasonable and non-discriminatory terms. It is by preserving this balance that consumers will continue to have access to a wide choice of interoperable products”, said Competition Commissioner Joaquin Almunia, adding: '”Our decision on Motorola (…) provides legal clarity on the circumstances in which injunctions to enforce standard essential patents can be anti-competitive. This will also contribute to ensuring the proper functioning of standard-setting in Europe”. (EL)