OVERVIEW OF STANDARD ESSENTIAL PATENTS
PUBLISHED ON 22.11.2021 BY MS. APARNA JAIN, MS. HARINDER NARVAN, MS. AASHRIKA AHUJA AND MR. PARDEEP YADAV
Best Patent Consultants in India
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- Public interest in the product
- Impact on competition
- Details of the FRAND agreement
- Details of a patent holdup
- Patent pool arrangements
- Not confined to one time patent violation
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SEP JURISPRUDENCE AND THE TERMS OF OPERATION IN INDIA
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- INTERDIGITAL TECHNOLOGY CORPORATION & ORS.V. XIAOMI CORPORATION & ORS. CS (COMM) 295/2020
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We have many cases in India with respect to Standard Essential Patents (‘SEPs’). InterDigital v Xiaomi judgment that came in May 2021 is a very significant case law that relates to litigation occurring in different countries. A US tech company, InterDigital filed a suit against Xiaomi, claiming infringement of its 3G and 4G patents. InterDigital had previously issued licenses of its SEPs to third parties and invited Xiaomi to do the same. However, the rate proposed by Xiaomi was rejected, as InterDigital believed that it was unfair and non compliant with FRAND terms.
Further, in June 2020, Xiaomi filed a complaint against InterDigital in the Wuhan Intermediate People’s Court for determining royalty rates that comply with the FRAND terms payable for InterDigital’s 3G and 4G SEPs. As a counter, InterDigital filed a suit against Xiaomi in the Delhi High Court. In September 2020, the Wuhan Court issued an anti-suit injunction against InterDigital from pursuing matters in the Delhi High Court. In a ‘tit-for-tat’ response, after few days InterDigital filed an anti-anti-suit injunction application at the Delhi High Court.
On 3 May 2021, the Delhi High Court issued the first Indian anti-anti-suit injunction. This judgment confirms its 9 October 2020 order whereby it granted an ad interim anti-anti-suit injunction against Xiaomi, directing it not to pursue or enforce the injunction it had secured from the Wuhan Court. The Delhi High Court held that a court of one state (i.e. the Wuhan Court) cannot bar the parties from pursuing the dispute at a forum in another state (i.e. the Delhi court), when this foreign forum has the competent jurisdiction to hear the case.
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- MICROMAX INFORMATICS LIMITED V. TELEFONAKTIEBOLAGET LM ERICSSON- (2017) PL (COMP. L) DECEMBER 76
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This was the first case in India on SEP. In this case, Micromax claimed that Ericsson demanded unfair, discriminative and intense royalty for its patents regarding GSM technology. Micromax entered into a Non-Disclosure Agreement with Ericsson after being sent two notices Micromax, before the Competition Commission of India stated that Ericsson is abusing its dominant position by imposing exorbitant amount of royalties for SEPs after the High Court of Delhi passed an ad interim ex-parte order in favour of Ericsson. It also stated that the royalty was charged on the basis of the value of the phones. For the very first time, the concept of standardization and FRAND Term came into limelight through this case. It was explained that standardization is the procedure of developing and executing technical standards and these standards are known to be SEP.
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- FTC VS QUALCOMM INC
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In this case, Qualcomm which is one of the world’s largest manufacturer and distributer of mobile chips, developed a technology that was essential for connecting phones to cellular networks. Company earned a part of its revenue by providing licenses to many device makers, with fees based on the value of the whole phone. The company also owned several patents in relation to 3G, 4G and 5G networking technologies, as well as other software. FTC alleged that Qualcomm had considerable market power in the premium LTE modem chip market and exercised that power in the form of excessive licensing fees on product manufacturers and its customers and also conditioning the licensing agreement of such SEPs such that the user is forced to have a subscription of other services that Qualcomm provides, hence violating the FRAND terms. They also accused Qualcomm of engaging in certain exclusive deals and foreclosing competition. The court issued an injunction forbidding Qualcomm from entering into exclusive dealing agreements for the supply of modem chips. Additionally, Qualcomm was ordered to negotiate license terms for its SEPs in good faith without the “threat of lack of access” or “discriminatory provisions.”
CONCLUSION
SEP’s offer many advantages like they support in developing better machines and processes, product development, exchange of technology for upgrading the products to benefit end users and generating profits. At the same time, there are many challenges too as result of no proper guidelines and excessive royalties and violation of FRAND terms. India, being a developing country, it is essential that we are able to benefit from technological revolution. Having sound guidelines for SEP licensing and developing a control mechanism for enforcement of FRAND terms will give concrete direction to the field of R&D as well. At Knowledgentia, we have best patent consultants in India and are well versed with all latest trends in the field of SEP’s thereby providing effective solutions for our clients and colleagues across the world. We are your one-stop solution for all kinds of legal, compliance and supplemental matters concerning patents. In case of any query regarding this matter you may email us at info@knowledgentia.com or visit our website –https://knowledgentia.com/.