A Study on Enforcement of the Korea Anti-Monopoly Act on Breaches of the FRAND Commitments by SEP Holders

Implication of standard-essential patents, SEP, holders` breaching FRAND commitments is one of recent issues which have been ardently discussed around global antitrust arena as well as intellectual property community. Setting standards by standard-setting organizations (SSO) may create hugh benefits such as increased interoperability, and economies of scales and scope. On the other hand, it necessarily confers substantial market power to SEP holders. In this respect, FRAND commitments given in standard-setting contexts are designed to prevent excercise of the market power by SEP holders and ensure that SEP incorporated in a standard is accessible to users of the standard on fair, reasonable and non-discriminatory terms. Breaches of FRAND commitments by SEP holders may not only cause a heavy financial burden on the patent users but also have serious negative effects on competition and exclude competitors in related markets. Therefore, they become typical subjects of antitrust law enforcement in each jurisdiction. Antitrust law enforcement by competition authorities can solve the anti-competitive problem involving exercise of market power by SEP holders most effectively and timely. Breaches of FRAND commitments by SEP holders take various forms among which are an outright refusal to offer licenses, seeking for injunctions, making licence offers on unreasonably high or discriminatory royalties. The prohibition of abuse of market dominance clause (Art. 3-2) under the Korea Anti-Monopoly Act interpreted by the Korea Fair Trade Commission and the Korea Supreme Court has wide application enough to include various forms of breaches of FRAND commitments by SEP holders. Active and attentive competition law enforcement activities by the Korea Fair Trade Commission on breaches of FRAND commitments is duly expected