Ericsson v Micromax: The fire that won’t die out easily

Authored by Neharika Nainta, Senior Associate at LexOrbis. She is associated with the LexOrbis’s Litigation and Enforcement group and has been dealing with IP litigation in Delhi courts for 7 years. She has also worked on several cancellation actions and appeals before the IPAB.

unnamedOne of the famous law suits involving Ericsson and Micromax again attracted the attention of the litigants as well as other stakeholder when recently both the parties handed over their mutually decided issues to the Delhi High Court. However, the parties contented differently on the issue of proving the validity of 8 suit patents.

Micromax contended that the burden of proof is on Ericsson to prove that the suit patents are valid while Ericsson argued that the burden is on Micromax since Micromax had only challenged the validity of the suit patents by filing the counter claim.

Micromax stated that Section 13(4) of the Indian Patents Act suggests that the grant of a patent certificates the patentee to file a suit for infringement only. It nowhere suggests the validity of the patent. Micromax also relied on judgments like Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries[1] and TenXC Wireless Inc vs. Mobi Antenna Technologies[2] to prove its point.

Both the parties argued on the issue and also handed over the supporting judgements for proving the burden of proof. The Court after listening to both of them reserved the order on this issue.

Some of the other applications were also decided during the hearing of this matter. In an interesting move, Ericsson initiated the contempt proceedings before the Court against the Micromax on the ground that the Micromax failed to provide the statement of sales and also failed to pay the royalty on sale of Yureka and YU brands and devices. While out rightly rejecting this argument of Ericsson, Micromax contended thatthe cause of action is different andno impleadement application had been filed by Ericsson therefore the present contempt petition is infructuous in natureand must be dismissed. The Court after hearing the parties directed Micromax to submit the statement of sales of Yureka and YU brands and devices in seal cover along with the reply to the contempt petition within four weeks’ time.

Leaving no stone unturned Ericsson also initiated an interim application before the Court for seeking direction for Micromax to pay the royalty which was due after November 2014 order of this Court. Micromax contented that since the appeal filed by Intex involving issues of same patents is pending, the payment of royalty should be stayed till that hearing is decided.

The Court did not find the arguments of Micromax convincing and directed Micromax to pay the royalty(due since November 2014) and Ericsson to give the bank guarantee before the Registrar General on August 12, 2015.

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. In November 2014, while deciding the interim injunction application in Ericsson vs Micromax, the Delhi High Court had 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 proceedings in this case and the disposal of the other connected applications continue to shed light on the issues involving the Standard Essential Patents and their legal implications in India. There is a lot to witness till the final disposal of this suit.

[1] AIR 1982 SC 1444

[2] 187 (2012) DLT 632