Standard-essential patents

The telecommunications industry has recently seen a significant increase in costly patent litigations which some commentators have called "smartphone patent wars". The precedent set by the two antitrust decisions in the Motorola and Samsung cases provides a path to "patent peace" in the telecommunications industry. Moreover, these two cases bring legal certainty in all industries where standards and FRAND-encumbered standard-essential patents (SEPs) play a role. They constitute a guide for Member State courts, as well as to standard-setting organisations, on the interpretation of EU competition rules regarding the enforcement of FRAND-encumbered SEPs. In the Samsung and Motorola cases, the Commission clarifies that in the standardisation context, where the SEPs holders have committed to (i) license their SEPs and (ii) do so on fair, reasonable, non-discriminatory (FRAND) terms, it is anti-competitive to seek to exclude competitors from the market by seeking injunctions on the basis of SEPs if the licensee is willing to take a licence on FRAND terms. In these circumstances, the seeking of injunctions can distort licensing negotiations and lead to unfair licensing terms, with a negative impact on consumer choice and prices.