Ericsson has been going all out to enforce its Standard Essentials Patents (SEP) against several mobile phone companies, such as Micromax, Intex and Lava, among others, who are primarily selling mobile phones in India. The outcome of these law suits will no doubt play a significant role in defining the future of licensing and enforcement of SEP in India.

The latest in these law suits is an interim judgement by The High Court of Delhi in the matter between TELEFONKTIEBOLAGET LM ERICSSON (Ericsson) and LAVA INTERNATIONAL LTD (Lava). The interim judgement is in favour of Ericsson. More importantly, the judgement deals with various aspects of licensing and enforcement of SEP.

The judgement held that, as is the well-established practice, demonstrating or establishing compliance of a device or a process with concerned standard is sufficient to confirm that the device/process is infringing an SEP.

As a step-wise approach, to allege infringement of an SEP, the following may be done:

• Set out the relevant standards;
• Map the standards with the claims;
• Wherever implementation is optional, testing shall be done;
• Wherever implementation is compulsory, an expert affidavit shall be furnished.

The judgement favours passing injunction order once an SEP patent prima facie is held to be infringed and no credible defence is established. In case any party is reluctant or unwilling and deliberately and intentionally avoids entering into license agreement on flimsy grounds, the injunction order is to be passed.

The judgement also appears to suggest that once the owner of SEP has entered into several FRAND agreements, the balance of convenience lies in favour of the owner, necessitating an interim order to be passed. The reasoning provided is that, in case the interim order is not passed or the defendant is not ready to enter into FRAND agreement, other licensees would also take the same stand which is being taken by the defendant. Hence, under such circumstances, the owner of the SEP would suffer irrecoverable loss and also injury.

The operative parts of the interim order (w.e.f. June 21, 2016) include the following:

1. Lava shall not import mobiles under the patents and technology, which are subject of the suit patents, and not to sell the same in the market, directly or indirectly through agent, shopkeepers, dealers, distributors or any other person on its behalf. 
2. Lava shall also not export the impugned goods.
3. All Custom Authorities in India are directed not to release the impugned mobile phones if received from overseas countries under technology of suit patents of Ericsson to the Lava or any person on its behalf.

The operation of the interim order shall remain stayed till the final disposal, if the following conditions are met by Lava.

1. Deposit a sum of INR 50 crores (approx. USD 7.7 million) with the Registrar General of the Court by way of FDR as security amount on or before 20th June, 2016;
2. File statement of accounts for the period of 2011 to 31st May, 2016 before the Court by 10th July, 2016; and
3. Continue to file statement of accounts every quarterly till the final judgment is delivered in the main suit.

The judgement is clearly in favour of Ericsson at this juncture. We will continue to monitor and analyse the suits involving Ericsson concerning their SEP in India, since the judgements will have far reaching implications on the subject of licencing in general, and licensing of SEP in particular.

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Best regards – Team InvnTree   

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