In a significant relief for Swedish major Ericsson, which provides services, software and infrastructure in the information and communications technology space, the Delhi High Court on Wednesday ordered an interim injunction on domestic handset manufacturer iBall from importing mobiles, handsets, devices and tablets that infringe on the former’s patent on technologies essential to manufacture these products.
This is the second major boost for Ericsson, which won a similar injunction against another domestic manufacturer of handsets and other such devices, Micromax, in November last year.
Legal observers said that the development strengthens the intellectual property system of the country by protecting innovation and is fairly well balanced.
In his 15-page order providing the interim injunction sought by Ericsson, justice Manmohan Singh has basically accepted the contention of the Swedish major that iBall never made any effort to negotiate with it the royalty rates which are fair, reasonable, and non-discriminatory (FRAND) in nature for using the technologies concerned, despite Ericsson’s efforts to negotiate and enter into such an agreement with iBall. Thus, the court labelled offenders like iBall as “unwilling licensee”.
The court rejected the claim made by iBall that it is merely a vendor and imports all its telecommunication devices from China and as such is not aware about any such infringement and if there was an infringement, it is only an innocent infringer.
“This court felt that the defendant (iBall) has not taken any step or shown any interest for the purpose of the execution of the FRAND agreement as on the one hand the defendant is alleging that it is not infringing the suit patents of the plaintiff (Ericsson) and on the other hand the defendant itself has filed the complaint before the Competition Commission of India wherein certain admission of the rights of the plaintiff have been made,” the order said.
The court arrived at this conclusion because before the matter reached it, iBall had filed a case before the CCI alleging that Ericsson was abusing its dominant position.
Legal experts told FE that the court has basically gone on the premise that essential patents which are regulated by a standard development body need negotiation between the patent holder and implementers for arriving at the royalty rates payable and injunctions need to be granted wherein it is established that the implementers have not bothered to enter into negotiations with the patent holders on the royalty rates they need to pay for using their technologies.
In fact, on similar grounds the Delhi High Court had ruled in favour of Ericsson in November 2014 in its fight against Micromax. As per it, Micromax was asked to pay a royalty that amounts up to 1% of the selling price of its devices to Ericsson for using its patents on technologies that are essential to manufacture the products. The interim order holds until December 31, 2015, the deadline set by the court to conclude the trial.