Japanese court rules Samsung abused FRAND patents against Apple

Apple made legal progress in its battle with Samsung over patents in Japan this week when the Tokyo District Court ruled that Samsung had indeed illegally abused its Standards Essential Patents to demand a sales ban and excessive royalties against the iPhone maker.

Samsung had sought to use its patents related to the 3GPP mobile standard to win significant royalties against Apple, in addition to an injunction against sales of iPhone 4, in a Japanese case similar to the one the South Korean firm brought against Apple via the U.S. International Trade Commission (a case that was vetoed by the Obama Administration).

In Europe, Samsung was similarly blocked from seeking sales bans against competitors in cases that involved a Standards Essential Patent (SEP) following an E.U. investigation into the company's behavior.

In Japan, Samsung's parallel efforts to leverage a patent obtained during the development of open standards and then weaponize it against its competitors has now been shot down in a major policy ruling on the abuse of SEPs in that country.

Samsung's anticompetitive patent abuse, in three ways

Last year, Japanese courts found Samsung had abused SEPs in three ways. First, by failing to honor its duty under Japanese Civil Code to negotiate with licensees in good faith, given that its SEPs were created under a commitment to offer other firms licensing under Fair, Reasonable and Non Discriminatory (FRAND) terms.

Second, the court determined that Samsung had declared its "E-bit patent" to be essential to practicing the 3GPP mobile standard, but then subsequently attempted to win a preliminary sales injunction against Apple with that patent. Courts worldwide have recognized that sales bans are in inappropriate remedy in SEP cases where the two parties are simply negotiating a FRAND license.

Third, the court found that Samsung did not disclose its E-bit patent to the ETSI standards body until about two years after its 3GPP working group adopted the "invention" claimed by Samsung in its patent as part of its standard that any phone manufacturer would have to license in order to make a functional device.

Apple wins again in landmark Japanese decision

Following the original decision, Japan's court of appeals convened a "Grand Panel" to hear the case, which involved two hearings and called for public comment. A total of 58 amicus briefs were submitted for the court to consider, which the court described as "valuable and informative" in making its ruling.

The court agreed that Samsung had no right to demand a sales injunction, and struck down company's efforts to win "excess royalty" against Apple, ruling instead to cap Samsung's licensing demand to 9.9 million Yen ($95,000 U.S.) for the patent, which is inline with what Apple had expected to pay as a FRAND licensee."Samsung has recklessly ignored intellectual property rights around the world" - Apple

Apple's Japanese subsidiary released a comment on the ruling, which stated (via machine translation):

'We offer high praise that the court took the corresponding actions [against] Samsung [and] was resolute to try to protect the integrity of the international patent system. In an attempt to convince the court that the patent is not an issue, Samsung has recklessly ignored intellectual property rights around the world.'

Outside of the U.S., E.U. and Japan, Samsung has been successfully backed by one country's antitrust authority in its practice of leveraging SEPs against competitors: the South Korea Fair Trade Commission, which issued a ruling in February that protected Samsung from a complaint filed by Apple.