Tales of an Inflating Vogue – Patent wars in the Indian Cell Phones Market

In 2011, Apple sued its component supplier Samsung for infringement on its intellectual property. This inadvertently marked the beginning of the patent litigation wars across the globe including India.

Ericsson was the first company to start it all in India. Other companies followed suit without delay. This blog chronicles the most famous patent litigation wars in the mobile phones market in India.

 

Case 1 – Ericsson vs Kingtech

In March 2011, Ericsson notified Customs officials to not grant clearance to a consignment imported by Kingtech Electronics alleging the consignment containing 1,900 handsets comprising 18 models of the G’Five brand infringed 5 of its AMR patents (IN203034, IN203036, IN234157, IN203686, and IN213723). Consequently, by an order dated August 22 2013, the High Court directed Kingtech to refrain from importing any devices incorporating Ericsson’s AMR technology patents.

 

Case 2 – Ericsson vs Micromax

The most popular instances of patent litigation involves a legal suit filed in March 2013 by Ericsson against Micromax Informatics Ltd, India’s major mobile phones manufacturer. According to the suit, Micromax had infringed on eight of Ericsson’s patents. Mentioned below are the patents:

  • Patents related to Adaptive Multi-Rate Technology – IN203036, IN234157, IN203034, IN203686, IN213723.
  • Patents related to 3G Technology – IN240471, IN229632
  • Patent related to Edge Technology – IN241747

 

Allegedly,  Micromax had avoided obtaining licenses for said technologies from Ericsson under FRAND terms. Ericsson sought permanent injunction, damages up to Rs. 100 crores and for Micromax to render its sales accounts of mobile devices (that incorporated Ericsson’s patented technology) for years 2008-2012.

Apropos of Delhi High Court’s order, Micromax was restrained from selling, importing, or manufacturing mobile devices based on 3G, AMR and EDGE standards.

Back then, Micromax had a hold on almost 20% of the market share and was the second best second best smart phones manufacturer in India in terms of the units sold.

Following the injunction, Micromax filed a complaint with the CCI alleging Ericsson of violating the Competition Act 2002 by imposing outrageous royalties for using its SEPs. Micromax also argued that instead of calculating the royalty rates as a percentage of sales price of the mobile phones, it should be based on the value of the chipset technology. CCI found Micromax’s claim to be valid and ordered to initiate an investigation. Ericsson challenged this in the High Court which advised CCI not to interfere in the lawsuit.

 

Case 3 – Ericsson vs Gionee

Second on the list entails the suit filed by Ericsson against Gionee Mobiles arguing on same 8 SEPs over which Micromax has been sued. In October 2013, the Delhi High Court directed Gionee to make interim royalty payments of USD 24 million to Ericsson. The basis of the interim royalty rates charged was same as in March 2013 patent infringement suit against Micromax.

 

Case 4 – Ericsson vs Intex

Intex Technologies, an Indian mobile phones manufacturer alleged that the royalty rates Ericsson was demanding were completely outrageous. Intex also claimed that Ericsson’s terms to license its GSM technology patents were unfair. In January 2014, on the basis of allegations made by Micromax and Intex, CCI ordered to run an investigation on this matter. But as in Micromax’s case, this order was also challenged by Ericsson in the Delhi High Court. Soon, the High Court imposed restrictions on the CCI and Director General.

In April the same year, Ericsson sued Intex claiming Rs. 56 crores (560 million) in damages for the infringement of  eight of its patents essential to the 2G and 3G standards (the same ones over which Micromax was sued). Intex was ordered to pay 50% of royalty to Ericsson from the date the lawsuit begun to March 1, 2015.

 

Case 5 – Ericsson vs Xiaomi

In December, 2014, Ericsson sued Xiaomi for infringing on those same eight patents. Allegedly, Xiaomi had launched their phones in India without licensing the patents from Ericsson. The same year, an ex-parte injunction was granted to Ericsson preventing Xiaomi from selling, advertising, manufacturing and importing their mobile phones. Xiaomi countered Ericsson by claiming before the court that Xaiomi’s phones sold in India use the Qualcomm chipsets which were, in fact,  licensed by Ericsson. The court later allowed Xiaomi to import and sell all the devices that use a Qualcomm chipset in India.

 

Case 6 – Vringo vs ZTE

ZTE was sued by Vrigo in November 2013 for allegedly infringing on one of its patents on CDMA technologies (IN243980). Soon, the court passed an injunction for the manufacture, advertisement, sale and use of all of the ZTE’s infringing products.

 

Case 7 – Vringo vs Asus

In April 2014, Asus was sued by Vringo for infringing on its patent on Wireless Communications by Message Compression (IN223183). An interim order is yet to be passed in this matter.

 

*This blog is co-authored by Ms. Miti Mishra*
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