SEP Litigation – Ericsson v. Intex

In Telefonaktiebolaget LM Ericsson v. Intex Technologies India Limited.1, by an order dated March 13, 2015 (‘Order’), the Delhi HC granted an injunction restraining Intex Technologies India Limited (‘Intex’) inter alia from manufacturing, assembling, importing, selling, offering for sale and advertising various products including mobiles, handsets, hand held devices and tablets that infringed Telefonaktiebolaget LM Ericsson’s (‘Ericsson’) eight standards essential patents (‘SEPs’) relating to EDGE, 3G and AMR technology (‘Devices’) and issued directions to the customs authorities not to allow the import of the Devices. The Delhi HC has also ordered that Intex pay Ericsson 50% of the royalty amount from the date of filing of the suit till March 1, 2015 and has directed Intex to furnish a bank guarantee for the remaining amount. The Delhi HC has further directed that (i) for the future period till the disposal of the suit, Intex will have to comply with the same terms as stated above; and (ii) for the period prior to the filing of the suit, Intex should furnish true accounts from the date it began using the SEPs till the date of filing of the suit. The Delhi HC has further ordered that the royalty rates in relation to the Devices will be the same as mentioned in order of the Delhi HC dated November 12, 2014 in Ericsson v. Mercury Electronics & Anr.2

 
Ericsson claimed that the dispute started way back in the year 2008 when Ericsson first approached Intex alleging that the Devices it was importing into and selling in India infringed Ericsson’s standard essential patents (‘SEPs’), as these correspond with the telecom standards set by the European Telecommunication Standards Institute that have been adopted by the Department of Telecommunications, Ministry of Communication and Information Technology, India and are necessarily incorporated in any devices that claim to be compliant with 2G/EDGE, 3G and AMR technology. Ericsson contended that it had offered to license its SEPs to Intex on FRAND licensing terms; however, Intex was clearly reluctant to enter into a license, and while negotiating with Ericsson, Intex instituted proceedings against Ericsson before the Competition Commission of India (‘CCI’) for abuse of dominance and filed petitions for revocation against the SEPs before the Intellectual Property Appellate Board (‘IPAB’).

 
Intex has, in turn, contended that the ‘essentiality’ and ‘validity’ of the SEPs has not been established as there were multiple challenges pending against the same for violations under Sections 8³ of the Patents Act, 1970 (‘Patents Act’). Intex also challenged the validity of the SEPs under Section 3(k) of the Patents Act as well on the ground that the claims in the SEPs were directed towards ‘computer programs’ per se, which is an ineligible subject matter of patent protection. Intex has further argued that validity of the SEPs must be first established before the issue of infringement can be decided by the Delhi HC, as patents do not enjoy any presumptive validity in India. Ericsson, in turn, contended that Intex has admitted the ‘essentiality’ and ‘validity’ of the SEPs in the proceedings before the CCI, but has taken a directly contrary position before the Delhi HC.
The Delhi HC held that:

i. Intex had failed to demonstrate the effect of non-compliance (under Section 8 of the Patents Act) by Ericsson on the validity of the SEPs;

ii. non-compliance with Section 8 of the Patents Act does not have a bearing on the grant of an injunction in an infringement suit;

iii. an inference can easily be drawn in favor of Ericsson that the suit patents are prima facie valid as there was no credible defense raised by Intex. In this regard, the Delhi HC relied on the admissions in relation to ‘essentiality’ and ‘validity’ of the SEPs made by Intex before the CCI based on the well settled principle that a party cannot be allowed to approbate and reprobate at the same time.

The Delhi HC also dismissed the arguments of Intex in relation to invalidity and non-patentability on the ground that the same will have to be brought before the IPAB where the revocation petitions are pending. Further, the Delhi HC held that that any invention that has a technical contribution or has a technical effect and is not merely an abstract idea or a computer program per se, is patentable. However, the Delhi HC did not clarify as to what constitutes a ‘technical effect’ or ‘technical contribution’ that will thereby render a computer program patentable.

 

1 I.A. No. 6735/2014 in CS(OS) No.1045/2014

2 CS (OS) 442/2013

 

3 Section 8 of the Patents Act requires an applicant to submit the prosecution history details to the Controller of Patents for any corresponding foreign patent applications filed outside of India that relates to the same or substantially the same invention as filed in India.

 

 

For further information, please contact:

 

Zia Mody, AZB & Partners

zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 

abhijit.joshi@azbpartners.com

 

Shuva Mandal, AZB & Partners 

shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners

samir.gandhi@azbpartners.com

 

Percy Billimoria, AZB & Partners 

percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 

aditya.bhat@azbpartners.com