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The High Court of Delhi’s interim injunction order in a dispute between mobile phone manufacturer Ericsson and importer iBall took effect yesterday.
The dispute concerns iBall’s alleged infringement of eight of Ericsson’s standard-essential patents (SEPs) covering 2G and 3G technology in devices manufactured in China and imported by iBall into India.
Ericsson applied for an injunction in August after arguing that iBall had shown no interest in licensing the patents on fair, reasonable and non-discriminatory (FRAND) terms.
Before Ericsson applied for an injunction, iBall had complained to the Competition Commission of India (CCI) that Ericsson had abused its monopoly position on 2G and 3G patents.
Despite the CCI initially agreeing on May 12 to start an investigation, the CCI reversed its decision after the director general said “no final orders shall be passed” on the matter.
According to iBall, negotiations over a FRAND licensing agreement failed because Ericsson did not provide details of its “legal rights”. Furthermore, it claimed that Ericsson adopted a “passive aggressive” approach in requesting the importer to sign a non-disclosure agreement over a potential deal.
The importer added that the conduct of Ericsson was “unfair”.
However, Ericsson said iBall showed no willingness to agree to a FRAND contract. Instead, according to Ericsson, iBall claimed it is “merely a vendor” and because the devices are manufactured in China it is not aware of any “infringement” and that, if there is any, the company is only an “innocent infringer”.
Ericsson said this argument was irrelevant based on the 2009 Delhi high court’s ruling in Strix Limited v Maharaja Appliances Limited. In that ruling, the court determined that the defendant had an “obligation ... even while it imported the same product from China, to ensure that it was not violating the plaintiff’s patent”.
Also, Ericsson said, iBall was aware of Ericsson’s legal rights because it is one of the “world’s largest telecommunication companies” and “one of the largest holders of SEPs in the mobile phone and wireless industries”.
On September 2, Judge Manmohan Singh was persuaded by Ericsson’s argument that iBall “has not taken any step or shown any interest for the purpose of execution of the FRAND agreement”.
“I am of the view that plaintiff has made out a prima facie case in its favour and the balance of convenience also lies in its favour. If the interim order is not granted, the plaintiff would suffer irreparable loss and injury because of the reason that the defendant would keep on marketing the mobile devices without the FRAND agreement and without paying any royalty,” he added.
The injunction order is effective until the next hearing between both parties at the court.
Ericsson; SEPs; FRAND; High Court of Delhi; iBall; 2G; 3G; telecommunications; Competition Commission of India