Ericsson Targets Micromax In Patent Lawsuit, Demands Rs. 100 Crore In Damages

The growing smartphones patent wars had not hit the Indian shores as yet, but Ericsson has changed that now. Ericsson, the Swedish Telecom equipment maker has sued India’s smartphone maker Micromax for patent infringement and refusal to enter into a licensed agreement according to the company’s several wireless technology standards such as EDGE, 3G and GSM. Ericsson has moved the popular smartphone maker to the Delhi High Court.

The company has claimed Rs. 100 crore in damages from Micromax. The Delhi High Court has told Micromax to pay royalties on every device it sells. The ruling is part of an interim arrangement between the two companies, who are expected to finalise a patent deal by April 9. The royalties range between 1.25 percent and 2 percent of sale price for every phone or tablet Micromax sells. Ericsson had approached the HC seeking over Rs 100 crore in damages from the Indian manufacturer. This consensus comes after almost three years of negotiation from Ericsson’s side and even then no license agreement could be worked out.

The products that violated the patents include Micromax’s Funbook tablet and the Canvas 2 smartphone.

As per the terms and conditions of the arrangement, the money for the royalties will have to be deposited in the court until the dispute is settled. The technical term for such an arrangement is FRAND (fair, reasonable, and non-discriminatory terms) license agreement. The Delhi High Court also allowed Ericsson officials to join custom officials in inspecting Micromax’s product consignments in order to check if the company’s violating their patents.  Once Ericsson conducts the inspection and clears the consignment for release, it will be immediately handed over to Micromax. Upon sale, Micromax has to deposit the percentage of royalty in the court.

“Indian courts respond swiftly and with speed, if a strong case is made out. This case marks the arrival of big ticket patent litigation in India,” said Ericsson’s counsel Pratibha Singh. Executives close to Micromax, which accounts for about 5.5% of the 200 million mobile handsets sold annually in India, rejected the charges saying the Swedish company had failed to adhere to global commitments on providing its industry-essential patents to handset makers under so-called fair, reasonable and non-discriminatory (FRAND) terms. A spokesperson for Micromax said the company is in negotiations with Ericsson. “Micromax is committed to negotiating a FRAND licence with Ericsson as Ericsson has undertaken to providing a FRAND licence to Micromax. Since the matter is pending before the Hon’ble court it would be incorrect for Micromax to make any further statements on the matter.”

Ericsson is one of the largest telecom equipment maker and also one of the largest patent-hoding company for mobiles. It’s competitors include Qualcomm and Nokia. Ericsson recently filed a lawsuit against Samsung of a similar nature.

Micromax manufactures smartphones, tablets and phablets among a host of other products are recently tasted significant success with its Canvas 2 smartphone. The firm is backed by investors like Sequoia Capital, Madison India Capital, Sandstone Capital and TA Associates.

Patent wars have increasing all over the world(a major case being Apple vs. Samsung) and now it’s safe to claim that patent lawsuits have touched Indian shores as well. This case is possibly the largest patent case in the country as far as the compensation value is considered. However it is different from battles in the US in the sense that these companies do have their own patents, unlike the ones in the current case.

Image Courtesy | computerworld.in

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