A Standard Essential Patent (SEP) is a vital legal tool in telecom infringement cases, often involving major telecom firms like Ericsson, Huawei, and Intex. The Ericsson Vs. Intex case in India exemplifies such disputes, with highlights as follows:
- Ericsson accused Intex of infringing its SEPs in India (eight specific patents listed).
- Ericsson proposed licensing on FRAND terms.
- Despite reluctance, Intex entered into negotiations with Ericsson.
- Intex filed complaints against Ericsson for dominance abuse in CCI and petitions for patent revocation in IPAB. Intext further challenged patent essentiality and was in disagreement with the way the royalties were calculated by Ericsson.
- The court passed a judgement in favour of Ericsson, ordering Intex to pay royalties.
The Delhi High Court's recent cross-appeals decision offers important guidelines for conducting SEP litigation in India:
- SEP litigations fall under a different category as SEP holders are deprived of freedom of choosing licensees; need to follow FRAND terms; freedom of claiming injunctive relief without prior negotiations.
- FRAND is certainly not a road that goes only one direction and both parties must negotiate and comply with FRAND convention determined under the CJEU judgment in Huawei vs ZTE.
- Claim charts can demonstrate infringement in SEP cases.
- Parties' conduct during FRAND negotiations is relevant to licensing willingness.
- ?Implementers can counteroffer FRAND terms without demanding access to the SEP holder's third-party agreements.
- Implementers must either accept the SEP holder's FRAND offer or propose a counteroffer with security deposit.
- Implementers cannot use SEP technology without payment if negotiations fail.
- The four-factor test in Nokia v. Oppo is contrary to law.
- Patent Rules 2022 allow courts to direct security deposits early in hearings.
- Foreign judgments and laws are inapplicable in Indian courts.
- Injunctions can be granted against unwilling implementers and based on infringement of only one SEP.
Indian telecom companies must recognize the significance of holding SEPs, especially with the advent of 5G. To assist them, a dashboard has been created by Arctic Invent analyzing SEPs in India:
- The dashboard covers live (granted and pending) SEP filings in India.
- SEP filings have steadily increased since 2015.
- Top SEP holders include Qualcomm, Samsung, Ericsson, and Huawei.
- ETSI-3GPP-TS-38-213, ETSI-3GPP-TS-38-331, and ETSI-3GPP-TS-38-214 have the highest patent filings in India.
- The dashboard aids Indian telecom companies in tracking SEPs and identifying R&D opportunities.
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