Case note: M/s Intex Technologies Ltd vs Telefonaktiebolaget LM Ericsson (Publ) [29th March, 2023] [MANU/DE/2188/2023]

In its judgment dated 29th March, 2023, titled M/s Intex Technologies Ltd vs Telefonaktiebolaget LM Ericsson (Publ) the Hon’ble Division Bench of the Delhi High Court while affirming the Ld. Single Judge’s findings, has directed Intex to make deposit of interim royalty directly to Ericsson as determined by the Ld. Single Judge, within a period of 4 weeks.

In this seminal and landmark judgment, the Hon’ble Court has also dealt with the prevalent jurisprudence relating to SEPs and FRAND and laid down guiding principles for Courts in India to follow in such cases:

1. 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;
2. Parties’ conduct during the negotiation of a FRAND license is a relevant factor for determining willingness;
3. 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;
4. There is no embargo on the grant of injunctions (both at the interim and final adjudication stage) against an implementor who is unwilling;
5. 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;
6. Implementors are mandated to make certain deposits/furnish security in favour of the SEP proprietor in case negotiations fail, in order to balance the rights of the SEP owner;
7. Infringement in SEP cases can be established by using claim charts;
8. Portfolio licensing on a global basis is in conformance with commercial practices in the industry and is FRAND;
9. 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;
10. Under the Patent Rules, 2022 courts can direct deposits of some kind of security even on the first date of hearing;
11. The peculiarities of the English system of conducting an SEP trial, in a stage-wise manner, cannot be applied in the Indian context, as the realities of the Indian legal system should be considered;

All of the aforementioned findings are of extreme relevance, and have huge global ramifications, in terms of the settled SEP jurisprudence globally.