Ericsson, world’s biggest telecom network equipment maker few months ago filed a patent infringement suit against Micromax, one of India’s largest domestic mobile handset manufacturers for allegedly infringing 8 of its telecom patents for a range of wireless technologies, including 3G, AMR and Edge
The suit, filed at the Delhi High Court, involves a huge claim of Rs. 100 crores made by Ericsson by way of damages, which made it so far one of the biggest cases of its kind in in terms of damages sought in a patent suit in the Indian IT and Telecommunications sector.
The Delhi High Court had granted an ex-parte interim injunction on the very first day even before Micromax could receive a legal notice that it had been sued.
The dispute in itself has been of considerable significance because it marked the arrival of patent wars on the Indian shores, with similar feuds between tech giants including Samsung, Apple, Google and Microsoft already going in courtrooms around the world.
It can be said that the Ericsson Vs Micromax case is the beginning of mobile patent wars in India. It is also speculated that it can be just a tip of the iceberg and other home-grown mobile manufacturers also have to fight it out with common essential patent holders like Ericsson.
This article throws a light on the development of this dispute which is of considerable significance and also talks about the first and only decision of a court actually fixing royalties for FRAND patents delivered recently by a U.S. District Court.
FRAND :WHAT IT IS EXACTLY
Reasonable and non-discriminatory terms (RAND), also known as fair, reasonable, and non-discriminatory terms (FRAND), are a licensing obligation that is often required by standard-setting organizations for members that participate in the standard-setting process.
Standard-setting organizations are the industry groups that set common standards for a particular industry in order to ensure compatibility and interoperability of devices manufactured by different companies.
Standard-setting organizations commonly have rules that govern the ownership of patent rights that apply to the standards they adopt. One of the most common rules is that a patent that applies to the standard must be adopted on “reasonable and non-discriminatory terms” (RAND) or on “fair, reasonable, and non-discriminatory terms” (FRAND). The two terms are generally interchangeable; FRAND seems to be preferred in Europe and RAND in the U.S.
Standard-setting organizations include this obligation in their bylaws as a means of enhancing the pro-competitive character of their industry. They are intended to prevent members from engaging in licensing abuse based on the monopolistic advantage generated as a result of having their intellectual property rights (IPR) included in the industry standards. Once an organization is offering a FRAND license they are required to offer that license to anyone, not necessarily members of the group.
Without such commitment, members could use monopoly power inherent in a standard to impose unfair, unreasonable and discriminatory licensing terms that would damage competition and inflate their own relative position.
Essential patents’ are basically declared as standards for the entire industry by standard-setting organizations on the premise that they will be licensed on fair, reasonable and non-discriminatory terms to anybody ready to seek such a license. Such an arrangement is a trade-off for the patentee because while it ensures that its patents are used by the entire industry, it will have to adhere to fair and reasonable terms
ERRICSON Vs MICROMAX :
ORDERS OF DELHI HIGH COURT :
On 19 TH March 2013 ,Delhi High Court, in the form of an interim order by Justice Manmohan, has issued an order to Micromax to deposit a certain amount of money, apparently in a bid to protect Ericsson’s monetary interests while the negotiations are continuing.
The deposit prescribed consists of category-specific royalties, such as 1.25% of the sale price for phones/devices capable of GSM, 1.75% of sale price for phones/devices capable of GPRS + GSM, 2% of sale price for phones/devices capable of EDGE + GPRS + GSM and for WCDMA/HSPA