Apple Inc. (AAPL) Hopes EU Fines Bury Samsung

Apple Inc. (AAPL) Hopes EU Fines Bury Samsung
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Apple Inc. (NASDAQ:AAPL) has been shown a new avenue of attack in its patent war with Samsung. According to a report published in the Guardian on Wednesday, the European Commission is considering imposing heavy fines on Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) to punish the company for the way in which it carried out its patent attacks on Apple.

Apple Inc. (AAPL) Hopes EU Fines Bury Samsung

According to the Guardian, Samsung could face billions in fines because it attempted to use its patents on 3G to get Apple Inc. (NASDAQ:AAPL) products banned in European countries. The case rests on the usage of so called “standard essential patents”.

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Standard Essential Patents, or SEPs, are patents that must be implemented in a technology in order for it to meet technical standards set out by regulatory bodies. Because of the necessity of their use, holders of these patents are often compelled to license them at a reasonable price, even if those licenses are to its own competitors.

Samsung Electronics Co., Ltd. (LON:BC94) holds patents that are technically necessary for the use of 3G receivers in mobile devices, these patents are considered Standard Essential Patents. Samsung’s use of them to get Apple Inc. (NASDAQ:AAPL) products banned in European countries. Samsung announced on the 18th December that they were going to halt their campaign to get those products banned.

The cessation of those activities was likely in advance of this news from the European Commission. The original announcement that this matter was of interest to the Commission came on the 21st, but it is likely that European officials warned the parties involved in advance of making the investigation public.

If the Commission decides to rule against Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), it may cost the company billions in fines, and lead to a preliminary declaration of victory by Apple Inc. (NASDAQ:AAPL) in the so called patent wars. The highest fines that Samsung can be compelled to pay is 10% of the firm’s worldwide revenue.

Similar cases have been fought in recently in the United States. Motorola was ordered to pay restitution after a court ruled that its use of SEPs amounted to a “hold up”. Samsungs use of its SEPs on 3G are still being investigated in  the United States.

So far in the patent wars, Apple Inc. (NASDAQ:AAPL)  has been carefully avoiding the use of any SEPs against its opponents. Samsung has been  less restrained in its use of the standard patents. Their decision to use them is coming full circle.

Despite the announcement that they would no longer use SEPs to get Apple Inc. (NASDAQ:AAPL) products banned in Europe, Samsung made no such promises about its activities in the rest of the world. The Federal Trade commission is already investigating their use in the United States, but that has not fazed the company.

The patent wars, if they ever end, will probably be remembered as one of the most counterproductive and inevitable periods in the history of consumer technology. The only things that might end the reign of tedium are the creation of a new patent system, or the capitulation of one side in the fight.

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