Government Gives Samsung and Motorola Monopoly Patent Grants; then Probes them for “Patent Abuse”

As I have discussed before,¹ the state is schizophrenic. It grants monopolies aimed at limiting competition (patents and copyright), and then penalizes companies for using (“abusing”) them, in contravention of state antitrust law–so that there is a “tension” between these state laws. Then courts have to “balance” these against each other. Each state law gives the state an excuse to ratchet up its power. Here’s an idea: get rid of both antitrust and patent law.² (Likewise, there is also a “tension” between copyright censorship, and the right to free speech.)³

The latest example is noted in PCMag’s post DOJ Probing Samsung Over Patent Abuse, Apple Says:

The Department of Justice is reportedly investigating Samsung for patent abuse, according to a court filing from Apple.

The document, filed with the International Trade Commission, says that the “Department of Justice has opened an investigation into the manner in which Samsung has used – or misused – its declared-essential patents.”

A Samsung spokesman, however, said the company “has not received any formal notification from the authorities.”

“Samsung has been and remains committed to fair licensing of standard-essential patents,” he said.

The filing squares with a June report from Bloomberg that said “the Justice Department will scrutinize Samsung Electronics Co.’s handling of industry-standard patent claims.” Bloomberg’s source, however, didn’t know if the DOJ had formally contacted Samsung for more information.

That same article said the Federal Trade Commission would probe Motorola over its handling of essential patents.

Samsung is already under investigation across the pond. In January, the European Commission opened a formal investigation into whether Samsung has used its patents to “distort competition” in the European mobile market.

EU rules require companies that hold patents essential to the implementation of a standard to license them on fair, reasonable and non-discriminatory (FRAND) terms. So, if a company has a patent for something that is required to make all cell phones work – like network connectivity – it needs to make good faith efforts to license its technology to other companies, even direct rivals.

Most companies under fire on this issue – including Samsung – have said that they made efforts to license their technology, but have not been able to reach a workdable deal.

Yeah. This “workable deal” nonsense reminds me of the theory that patents are just an “opportunity to bargain.” (See Feldman: Patents don’t define property rights; they are an “opportunity to bargain.” Don Corleone nods.) Funny how the state limits the effects of the patent monopolies it grants for things that are “essential.” But for other things, it’s okay for patents to be used to muck things up.

Here’s a novel idea: instead of handing out these monopolies and then using antitrust law and related rules to prevent monopolies or other damage from resulting…. stop granting patents.

1. FTC: Western Digital and Hitachi must give assets and IP rights to Toshiba: Patents, Antitrust, and Competition. [↩]
2. See EU newsflash: patents are anticompetitive!; Pro-IP Libertarians Upset about FTC Poaching Patent Turf; State Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law; The Schizo Feds: Patent Monopolies and the FTC; see also When Antitrust and Patents Collide (Rambus v. FTC); Antitrust vs. Trademark Law; Price Controls, Antitrust, and Patents; IP vs. Antitrust; The Schizophrenic State; Intel v. AMD: More patent and antitrust waste. [↩]
3. Should Copyright Be Allowed to Override Speech Rights? [↩]