Published: 1/1/12
In April 2011, Samsung filed a lawsuit in the Seoul Central District Court seeking an injunction against Apple for infringement of patents it claimed were essential to the UMTS cellular standard, and for which Samsung had made FRAND commitments to the European Telecommunications Standards Institute (ETSI). Apple contested infringement and validity of the asserted patents. Among other defenses, Apple contended that (i) Samsung’s FRAND commitments prevented it from seeking an injunction as matter of contract law, (ii) Samsung was estopped from seeking an injunction based on its FRAND commitments, and (iii) seeking an injunction on FRAND-committed patents constituted an abuse of a dominant position in violation of Korea’s Monopoly Regulations and Fair Trade Act (MRFTA).
In August 2012, the court issued a decision in which it found that Apple infringed two of the asserted patents, which it determined to be valid. The court awarded Samsung damages of KRW 40,000,000 for Apple’s infringement of the two patents. Further, the court granted Samsung an injunction, denying Apple’s arguments that an injunction should not be permitted because Samsung had made FRAND commitments for the patents. In particular, the court ruled that Samsung’s FRAND commitments did not constitute binding offers to license that could be accepted by Apple under French law, including because they did not specify the royalties for which the patents would be licensed. Similarly, the court concluded that Samsung was not estopped by its FRAND commitments from seeking an injunction because the FRAND commitment was not a binding commitment to grant a license (only a commitment to offer a license on FRAND terms), and thus did not waive Samsung’s right to seek such relief.
The court also denied Apple’s claim that Samsung had violated the MRFTA by seeking an injunction for essential patents. Although the court concluded that essential cellular patents could provide the patent holder with a dominant position in the market because essential patents would have to be practiced to implement the standard, it found that both parties were responsible for their failure to reach an agreement. The court, therefore, concluded that Samsung’s behavior did not constitute a refusal to deal. Moreover, the court noted that Samsung’s actions could not be regarded as “unreasonable” under the MRFTA because it was difficult to conclude that Samsung had anti-competitive intent, or that Samsung’s behavior was likely to have the potential to harm competition.