Delhi High Court Ruling On Patent License Agreements

Introduction

The recent ruling of the Hon'ble Delhi High Court on Patent License Agreements (PLAs) marks a significant development in the Indian intellectual property law, particularly in disputes involving Standard Essential Patents (SEPs). Presided over by Justice Mini Pushkarna, the judgement navigates ?delicate balance between transparency, confidentiality, and fair competition in complex international patent disputes. The pivotal concerning is regarding the extent of confidential information within third-party PLAs should be revealed to opposing parties, especially w.r.t the sensitive commercial data. This case , involving InterDigital Technology Corporation and Guangdong Oppo Mobile Telecommunications Corp. Ltd., sets a transformative precedent ?on the judicial approach to the disclosure of proprietary information in India.

Background Of The Case

In the present case, InterDigital Technology Corporation, a global leader in wireless telecommunications technology, accused Oppo, a leading r mobile phone manufacturer, of infringing five SEPs related to essential wireless standards, including 3G, 4G, and 5G technologies. SEPs are patents that ensures interoperability within telecommunication ?technologies, and ?are ?licensed under Fair, Reasonable, and Non-Discriminatory (FRAND) terms. Despite protracted ?negotiations between the two companies since 2014, InterDigital alleged that Oppo continued to manufacture and market devices using these patented technologies without securing a proper license, thereby instigating ?the present lawsuit.

Details Of The Dispute

A key issue in the case was the disclosure of Patent License Agreements (PLAs) between InterDigital and other licensees. Oppo contented that ?access to these agreements was necessary to compare royalty rates and determine ?whether InterDigital’s proposed terms complied with FRAUD obligations. Conversely, InterDigital sought to limit the disclosure to concise summaries of the agreements, raising concerns about protecting sensitive commercial interests. . To maintain confidentiality, the court had previously established a "Confidentiality Club," to regulate access to sensitive information, permitting only designated personnel from both companies to review the material under strict restriction.

Access To Patent License Agreements

The core issue revolved around the fact as to whether Oppo's in-house representatives could review the entire content of the ?PLAs, as this access would strengthen Oppo’s defence by enabling a detailed comparison of royalty rates. ?To this Oppo contended that unrestricted ?access was essential to determining whether the royalties demanded by InterDigital were aligned with industry standards and in adherence to FRAND obligations. Conversely, InterDigital asserted that ?disclosing such detailed information could jeopardize its competitive position in future licensing negotiations.

Decision Of The Court

The Hon'ble Delhi High Court, after considering arguments from both the parties, ruled in Favor of Oppo, allowing its in-house representatives within the Confidentiality Club to access the full PLAs. The court reasoned that transparency is indispensable to ensure equitable trial procedures, , especially in cases involving FRAND licenses where comparisons with other agreements is essential for determining reasonable royalty rates. Justice Mini Pushkarna noted that providing only summaries of the PLAs would prevent ?Oppo from conducting a meaningful evaluation of the terms and from effectively participating in the litigation proceedings.

Conditions For Disclosure

To mitigate the risk of misuse of sensitive information, the court imposed strict conditions on disclosure. Notably, Oppo's in-house representatives who were prohibited from engaging ?in any licensing negotiations for a two year period following their ?review of the full agreements. This measure was intended to ?prevent any undue advantage from being gained by Oppo while still enabling them to defend their position in court.

Disclosure Of Related Agreements

In addition to granting access to InterDigital’s PLAs, the court also ordered Oppo to disclose its licensing agreement with Qualcomm. This was deemed relevant for evaluating the extent of the alleged patent infringement. By mandating this reciprocal transparency, the court sought to maintain a fair balance between the parties while aligning the proceedings with international practices. Similar cases involving InterDigital and Oppo are currently being litigated in the UK, where comparable disclosure rules apply.

Conclusion

The Hon'ble Delhi High Court’s ruling carries substantial implications for the forth coming adjudications of patent disputes, particularly involving SEPs, within India. By emphasizing the principles of transparency and confidentiality, the court has set a precedent that ensures a equitable treatment ?for companies embroiled in complex intellectual property disputes, while also safeguarding sensitive business information. This judgment signals a shift toward greater alignment with international norms and practices in intellectual property litigation, particularly in the rapidly evolving telecommunications sector.

Both InterDigital and Oppo are now preparing for the trial on the substantive issues of patent infringement. As the case progresses, this ruling will serve as a guiding framework ?for similar cases in the future, shaping the trajectory of patent law in India.

Article By:- Shivam Singh (Senior Associate-Patent) & Neha Sharma (Patent analyst)