micromax

The Delhi High Court has extended the injunction against handset manufacturer Micromax to its subsidiary Yu Televentures for violating Ercisson’s patents, reports Mint. The court held Micromax guilty of contempt of the injunction order since its subsidiary continued to use the patents in question without permission.

Ericsson had filed a patent infringement lawsuit worth Rs 100 crore against Micromax in March 2013, alleging that Micromax had infringed on eight Standard Essential Patents (SEPs) used in its 2G, 3G and 4G devices. This was after Micromax had reportedly refused to sign a Fair, Reasonable and Non-discriminatory (FRAND) license agreement and a three-year negotiation with the company had failed. The court ruled in favor of Ericsson in 2014 and Micromax agreed to pay Rs 55 crore in fines to Ericsson.

Ericsson found that Yu Televentures continued to make and sell phones using the same patents without any payments. The Swedish firm went to court again, but Yu Televentures claimed it was a separate legal identity under the law and the injunction did not apply to it. The Delhi High Court noted that Yu Televentures was incorporated in 2014, before the injunction against Micromax was passed.

CCI probe against Ericsson

In 2013, Micromax approached Competition Commission of India (CCI), claiming that Ericsson was demanding an exorbitant, unfair and discriminatory royalty for its patents. It also claimed that Ericsson was abusing its dominant position by charging an exorbitant royalty, since it is the sole licensor for those patents and there was no alternate technology available.

The CCI subsequently ordered an antitrust probe against the telecom network equipment maker and its probe  found prima facie evidence of Ericsson indulging in discriminatory trade practices. It mentioned that Ericsson was acting contrary to the FRAND terms by charging patent royalties based on the cost of the user product (mobile phone, tablets and others) rather than the product being licensed (chipset), which is discriminatory. For instance, if the GSM chip is used in a Rs 100 phone, the royalty charged is Rs 1.25 whereas if the same GSM chip is used in a Rs 1000 phone, the royalty would shoot up to Rs 12.5, without adding any value to the product of the licensee.

Ericsson sues Intex
In April 2014, Ericsson also filed a lawsuit against mobile phone manufacturer Intex for infringing on its patents. Ericsson had apparently sought an ad-interim injunction on the grounds that Intex was an “unwilling licensee” as its tactics for license procurement were “barely satisfactory”. However, the judge dismissed this saying both the companies have been in negotiations since 2008 and had also communicated a day before filing the lawsuit.

Also read: Should royalty be paid for government taxes, duties and marketing? – SpicyIP