Ericsson, the world’s largest telecom equipment manufacturer from Sweden has sued Indian mobile handset maker Micromax and its distributor for infringement of wireless patent rights.
The Swedish network equipment maker has moved the Delhi High Court claiming about Rs 100 crore in damages, saying it was taking legal action after three years of negotiations failed to yield a licence agreement on ‘standards-essential’ patents. This will make it the largest patent suit in India’s IT and telecom space, reckon patent experts.
Ericsson has a strong patent portfolio which covers most of the technology that enables both mobile phones and the networks that support them to work. Rivals hold other so-called essential standard patents and the industry has agreed a system of licensing on fair, reasonable and non-discriminatory terms (FRAND) to ensure no one can block the development of mobile communications.
The Micromax spokesperson said the Indian company was committed to negotiate a FRAND agreement. “Micromax is committed to negotiating a FRAND licence with Ericsson as has Ericsson undertaken to providing a FRAND licence to Micromax. Since the matter is pending before the honourable court, it would be incorrect for Micromax to make any further statements on the matter.”
Justice Manmohan of the Delhi High Court, in an interim order last week, asked Micromax to pay between 1.25% and 2% of the sale price of disputed devices and deposit the amount with the court.
The court also allowed Ericsson executives to join customs officials in inspecting Micromax’s consignments to check for devices violating its patents.
“Indian courts respond swiftly and with speed, if a strong case is made out. This case marks the arrival of big ticket patent litigation in India,” said Ericsson’s counsel Pratibha Singh. Executives close to Micromax, which accounts for about 5.5% of the 200 million mobile handsets sold annually in India, rejected the charges saying the Swedish company had failed to adhere to global commitments on providing its industry-essential patents to handset makers under so-called fair, reasonable and non-discriminatory (FRAND) terms.
Ericsson is learnt to be mulling legal action against a few other local cellphone companies as well. Local players selling low-cost handsets include Lava, Spice, Karbonn and Intex Technologies.