Ericsson –Micromax Lawsuit: Win Some Lose Some

Ericsson –Micromax Lawsuit: Win Some Lose SomeSetting a time line for completion of trial in an IP infringement matter was something which was eagerly awaited by the litigants and IP fraternity. On November 12, the Delhi High Court finally set a time line to complete the trial in one of the most expensive lawsuits contested in India.

The Court directed that the trial in Ericsson vs Micromax must be completed by 31st December, 2015 and immediately thereafter to start the final arguments. Usually after completion of trial, matters move to the list of “Finals” and it takes years for those cases to come up for final arguments.

Moreover, the lawyers and litigants are required to keep a watch on the list of “Finals” every day to check whether the matter is being listed or not. While deciding the interim injunction application in Ericsson vs Micomax, the Court directed Micromax to continue paying quarterly royalty to Ericsson at the rates specified by the Court ranging from 0.8% to 1.3% on sales of per unit. The royalty rates prescribed in the November 12 Order are much lower than what was directed in the Court’s previous Order on March 19, 2013. As per the industry sources, Micromax may have to shell Rs. 10 Crores per month to Ericsson till the pendency of the suit to comply with November 12 Order. The November 12 order, however categorically states that the prescribed royalty rates are purely an interim arrangement and not a determination of FRAND rates for Ericsson’s SEP Portfolio. The Order further states that the royalty rates have been determined after detailed perusal of 26 other license agreements of Ericsson and both parties have no objection to the arrangement.

Earlier, Ericsson had instituted infringement proceedings against local handset makers, Micromax, Intex and Gionee before Delhi High Court, consequent to which both Micromax and Intex had filed complaints before CCI (Competition Commission of India) stating that Ericsson was demanding exorbitant royalty for its Standard Essential Patents and abusing its dominant position. While the CCI directed a probe, the Delhi High Court refrained CCI from passing any final order.