ABSTRACT
This chapter examines a number of Korean cases in which standard essential patents (SEPs), contract and antitrust issues are entangled. In December 2009, the Korea Fair Trade Commission (KFTC) decided that Qualcomm’s conditional discounts on its SEP licensing royalty rate amounted to abuse of dominance under the Monopoly Regulation and Fair Trade Act (MRA) (Qualcomm I). In this case, the KFTC inferred Qualcomm’s anticompetitive intent from alleged breach of its commitment to license its SEPs on fair, reasonable and non-discriminatory (FRAND) terms. In January 2019, however, the Supreme Court indirectly opined that Qualcomm’s conduct at issue did not constitute a breach of its FRAND commitment. In August 2012, the Seoul Central District Court in Samsung Electronics v. Apple dismissed Apple’s antitrust counterclaim that Samsung Electronics’ alleged breach of its FRAND commitment amounted to abuse of dominance and unfair trade practice. In 2015, the KFTC raised antitrust concern about SEPs arising from the merger of Microsoft and Nokia. Eventually Microsoft and the KFTC agreed to settle the case under MRA. In December 2017, eight years after Qualcomm I, the KFTC again imposed on Qualcomm various sanctions for the reason that the alleged breach of its FRAND commitment amounted to abuse of dominance (Qualcomm II). In this case, the KFTC just presumed that a breach of FRAND commitment constitutes abuse of dominance. However an SEP holder’s FRAND commitment is not an antitrust duty under MRA but a contractual obligation. Where FRAND commitments are mistaken for antitrust duty, just like the KFTC has done in the Qualcomm I and II cases, an erroneous antirust intervention is inevitable. This chapter concludes that the KFTC and courts should be aware that false-positive interventions unduly restrain SEP holders’ legitimate rights, thereby retarding the innovation that both the Korean Patent Act and MRA are designed to protect.
