Standard Essential Patents (SEPs) have increasingly become a critical component for the communication technology sector, especially with the evolution of interconnected devices. India's push towards a self-reliant, digitally connected economy has further heightened the importance of cutting-edge technology, making the role of SEPs in this sector even more crucial. This article delves into examining significant SEP lawsuits in India related to communication technology and the precedents they have set, providing valuable insights for companies, navigating this complex field.

SEPs: Driving Industry Standards

SEPs represent exceptional inventions that are crucial for implementing industry standards in several communication technology sectors. For example, Indian mobile manufacturers must include CDMA or GSM SEPs when producing industry-standard mobile phones. Additionally, SEP owners must commit to licensing their technology on Fair, Reasonable, and Non-Discriminatory (FRAND) terms, as set by Standard-Setting Organizations (SSOs) such as ISO, IEC, and IEEE, to promote a level-playing field, competition, and innovation in industries.

Amidst the challenges that persist, it is noteworthy that Indian jurisprudence is gaining valuable insights through each case, fostering a roadmap that enables IP professionals and communication technology companies to navigate the complexities of this evolving field.

Role of the Competition Commission in SEP Disputes

In 2009, mobile giant Telefonaktiebolaget Lm Ericsson (Ericsson) sought to enforce its SEP against Indian handset manufacturers, Mercury Electronics (Mercury) and Micromax, claiming infringement of eight 2G, 3G, and 4G-related SEPs. The Delhi High Court granted an ex-parte injunction favouring Ericsson, leading to an interim agreement according to the Court’s order, whereby Micromax paid royalties as demanded by Ericsson. Micromax subsequently filed a complaint before the Competition Commission of India (CCI) alleging that Ericsson abused its dominant market position by demanding exorbitant royalties which are against FRAND. This case established that the determination of abuse of dominance over the market falls under CCI’s jurisdiction.

First Post-Trial Judgment in a SEP Case

The same year, in a SEP lawsuit between Koninklijke Philips Electronics N.V. and Rajesh Bansal,  Koninklijke Philips Electronics (Philips) claimed that Rajesh Bansal (Bansal) has infringed its DVD video player SEP. Philips demanded the patent pool's entire value should determine the royalty since it is a licensing norm; Bansal argued that this would violate FRAND terms. In 2018, the Court ruled in Philips’ favour and found the Suit Patent to be essential post comparing the claims of the Suit Patent with Philip’s corresponding US and European patents, for which essentiality had already been established. The Court further awarded the payment of damages at the royalty rates proposed by Philips (in the absence of evidentiary rebuttal of the defendants), in addition to awarding punitive damages in the light of the defendant’s conduct.

Subjectivity of FRAND and Anti-Anti-Suit Injunctions

Delhi High Court's 2021 landmark judgment, in Interdigital Technology Corporation v Xiaomi Corporation, highlighted FRAND compliance’s subjectivity in Indian jurisdiction and addressed multi-jurisdiction disputes. Interdigital Technology Corporation (Interdigital) sued Xiaomi Corporation (Xiaomi,) in July 2020, for infringement of its 3G and 4G SEPs, seeking an injunction in case Xiaomi did not obtain licenses at FRAND rates. However, prior to this case, Xiaomi filed a royalty rate-setting suit against InterDigital’s worldwide SEPs in Wuhan, China and sought an anti-suit injunction to prevent InterDigital from filing a case in Delhi. This was granted to Xiaomi by the Wuhan Court in September 2020.

InterDigital counter-filed an anti-anti-suit injunction in the Delhi High Court. In May 2021, the Court passed India's first anti-anti-suit injunction order, clarifying that courts of one state (such as Wuhan) cannot prohibit parties from bringing cases to another state’s forum. The Court's order set a precedent for multi-jurisdiction disputes in India, highlighting the subjectivity of FRAND compliance and bringing guidance for practitioners in the Indian jurisdiction regarding complex multi-jurisdiction disputes.

Set Foundational Grounds for SEP Litigation

In a landmark judgement on March 29, 2023, the Delhi High Court set foundational grounds for SEP litigations in India for long-pending litigation between Ericsson and Intex Technologies Limited. The Court recognised the impact of holdouts on SEP holders and the technology, while also shedding light on FRAND terms. The Court determined that since implementers of more than 100 licenses, issued by Ericsson, were paying the suggested royalties, the terms and rates are based on FRAND principles. The Court also confirmed the essentiality of Ericsson’s suit technology, stating that if an implementor accuses a SEP holder of market dominance, they are confirming the suit patent’s essentiality. Although relying on foreign judgments, the Court’s decision considered the realities of the Indian market. The ruling allows SEP owners to seek interim and final injunctions when infringers are unwilling licensees, promoting innovation and SEP enforcement in India.

Additionally, in a recent development, the Delhi High Court issued an order instructing Oppo, a Chinese smartphone manufacturer, to deposit 23% of its India sales earnings as a "royalty" for allegedly infringing on Nokia's three standard essential patents (SEPs). These patents are vital for complying with cellular system standards. The Court's decision sets a precedent for SEP litigation and demonstrates its authority to enforce interim financial safeguards while ensuring fair practices in patent usage.

Way forward

With an increasing number of SEP litigation cases in India, the judgments delivered by Indian courts have paved a new path in Indian jurisprudence concerning SEPs. However, one thing is clear, the Indian jurisprudence is gradually adopting an independent approach to SEPs, fostering a fair and competitive environment while promoting innovation in the technology sector. These developments signify a promising trajectory for SEP decisions across the nation.