The United States Justice Department has reprimanded Samsung for the use of standards-essential or FRAND patents in its efforts to obtain an import ban against some older Apple products being brought into the U.S.
The DoJ investigated the case after concerns were raised about companies unfairly wielding their standards-essential patents to hamper competition.
Samsung and Apple had appeared before the U.S. International Trade Commission, who then ordered an import ban on several older Apple products, based on a ruling that they violated a particular FRAND Samsung patent. Although Apple had argued that Samsung was seeking unfair licensing fees, the ITC ruled in Samsung’s favor, saying their claims could proceed.
The Obama administration later vetoed the import ban, the first time since 1987 that an American President had revoked an ITC decision. A number of companies had aligned themselves with Apple, asking the President to veto the band on the grounds that the patent in question was deemed essential for 3G wireless functionality, saying Samsung was asking for excessively large licensing fees in violation of the standing patent rules.
While noting that they would not take action against Samsung in the face of the Presidential veto, the DoJ warned the Korean firm not to attempt similar moves in the future, saying: “In many cases, there is a risk that the patent holder could use the threat of an exclusion order to obtain licensing terms that are more onerous than would be justified by the value of the technology itself, effectively exploiting the market power obtained through the standards-setting process.”
FRAND patents are intended to allow cross-licensing of “essential” patents at a reasonable cost, to prevent one company that holds such a patent from extorting an entire industry.