While the European Commission is contemplating measures that would complicate standard-essential patent (SEP) infringement lawsuits (see a first reaction to reports on an upcoming proposal and a table of contents and synopsis), the High Court of Delhi at New Delhi rendered an appellate opinion on Wednesday that reflects a pro-enforcement stance:
Ericsson v. Intex cross-appeal: Delhi High Court ruling
Intex Technologies is an electronics manufacturing services company. On LinkedIn, one of Ericsson's lawyers from the Singh and Singh firm welcomed the "much needed clarity on SEP jurisprudence in India" that the decision brings. The firm itself summarized the 10 key aspects of the decision as follows:
FRAND is not a one-way street and the same casts an obligation on both the SEP owner and implementor to negotiate and act in conformance with the FRAND protocol specified under the CJEU judgment in Huawei v. ZTE;
Parties’ conduct during negotiation of a FRAND license is a relevant factor for determining willingness;
Disclosure of third-party license agreements by an SEP owner during negotiations is not mandatory or a precursor for the implementor to revert with a FRAND counter-offer. The implementor can place reliance on its own licenses executed with third-parties and other SEP proprietors to formulate an appropriate counter-offer or to determine if the SEP proprietor’s offer is FRAND;
There is no embargo on grant of injunctions (both at the interim and final adjudication stage) against an implementor who is unwilling;
If the negotiations between parties fail, that does not mean that an implementor can continue to use the technology of the SEP proprietor for free, without making any payment for such use;
Implementors are mandated to make certain deposits/furnish security in favour of the SEP proprietor in case negotiations fail, in order to balance the right of the SEP owner;
Infringement is SEP cases can be established by using claim charts;
Portfolio licensing on a global basis is in conformance with commercial practices in the industry and is FRAND;
The finding of the Ld. Single Judge and four-factor test prescribed in paragraph 77 of the Nokia v. Oppo judgment is contrary to law;
Under the Patent Rules, 2022 courts can direct deposits of some kind of security even on the first date of hearing;
The peculiarities of the English system of conducting an SEP trial cannot be applied in the Indian context, as the realities of the Indian legal system should be considered.
Here are a couple of observations based on my reading of the decision:
Nothing in the Indian ruling contrasts more nicely with the European Commission's draft SEP regulation than the holding that FRAND "is not a 'one[-]way street' where obligations are cast on the Essential Patent holder alone."
The judges considered that India is short on judges (relative to population size) and cases take too long to resolve ("the judge-population ratio is extremely poor in this country and expeditious disposal of patent suits cannot be expected at the cost of other suits"). Therefore, it is key to give leverage reasonably early to SEP holders. This litigation here has apparently been going for many years, and "Ericsson filed the information/complaint before the CCI only after a prolonged negotiation of almost five years during which Ericsson had provided Intex a list of its Standard Essential Patents, Claim Mapping Charts to show essentiality and also a test report to show infringement." For those five years, or even longer, "Intex did not share any of its own claim charts with Ericsson either indicating use of alternate technology or disputing essentiality of Ericsson patents or countering Ericsson’s claim charts and the fact that Ericsson had already issued around One Hundred (100) licenses for its worldwide patents to various third parties"
Here's the next--and final for this post--reference to the EU initiative: para. 89 of the decision quotes--and describes as reflective of common sense--"a paper dated 9th May, 2022 filed by legal academics, economists, and former United States governmental officials in response to European Commission call for evidence for an impact assessment." According to how the Indian judges summarize a passage from that document, if SEP owners "are flatly precluded from seeking injunctions, then infringers would have little reason ever to agree to, or negotiate in good faith, a licence with a Standard Essential Patent owner." Instead, "[a] well-resourced infringer would rationally reject any licence offer an compel the Standard Essential Patent owner to enter into litigation that typically requires millions of dollars in legal expenses in multiple venues around the world."
