Samsung Patent Licensing Agreement with Personalized Media Communications

Texas-based Personalized Media communications, which is having a seminal intellectual property portfolio, has successfully signed a patent licensing agreement with Samsung Corporation and its affiliates.

PMC patent portfolio includes around 100 issued patents and pending applications that cover the use of control and information signals to control automated systems for generating and delivering electronic content to a display that is relevant to a user. Over the years, PMC is consistently pursuing a license-first approach to commercializing its intellectual property.

In November 2015 PMC filed suit against Samsung in the Eastern District of Texas, claiming the electronics maker had infringed patents related to signal processing. Specifically targeting Samsung digital televisions and its Android smartphones. In its complaint, PMC said it had months of discussions in the year 2014-15 about potential license but failed to reach a deal.

Samsung denied infringement and sought a judgment that the patents were invalid. Samsung said the patents arose from technology that dated back to the 1980’s and now PMC was “stretching its patents to cover modern-day smartphones and TVs, devices and technologies that were science fiction at the time of PMC’s purportedly inventive work.” But Samsung failed to prove the claims it had made.

Later, Samsung filed a series of petitions seeking Patent Trial and Appeal Board review of the patents. PTAB petition and district court case ended after the two sides reached an agreement.

With this licensing agreement, Samsung joins other like Sony, Panasonic, Cisco, DirecTV etc., who also have taken PMC patent license.

About the Author: Gaurav Giri, Sr. Executive Licensing at IIPRD and can be reached at: gaurav@iiprd.com

Meizu – Qualcomm License Agreement Deal

Qualcomm and the Chinese consumer electronics company Meizu recently announced that they had signed a licensing deal with each other. With this deal, they ended a yearlong infringement suit which was filed by Qualcomm against the Chinese company.

In the October of 2016, we came to know that Qualcomm (the largest chipmaker in the world) has filed patent infringement suits against the Chinese smartphone maker Meizu in the US International Trade Commission, the Mannheim regional Court in Germany and in France. The two went under a tiff when Qualcomm claimed that Meizu is refusing to negotiate the patent licensing deals for the chipmaker’s 3G and LTE technologies.

Qualcomm’s technology licensing (QTL) business owns a massive portfolio of wireless technologies and generates a lion’s share of its operating profits also. This portfolio allows it to generate a 3-5% profit over the wholesale price of every smartphone which is sold worldwide. This deal was widely accepted when the smartphone sales were booming but as the prices fell down, smartphone makers complained that the royalties were impacting the already small margins. In response to Qualcomm’s licensing fees, many companies in china started underreporting their shipments to pay the less licensing fee to Qualcomm. The Chinese government in return also slapped Qualcomm with a $975 million antitrust fine and forced it to lower its licensing rates.  Due to this, Qualcomm had to renegotiate new licensing agreements with the companies on its own. Most of the major Chinese companies negotiated new terms with the chipset maker but Meizu was not ready to do this as they said they are not using Qualcomm’s chips in its lower segment phones and mainly puts MediaTek chips in them and Samsung’s Exynos chips in higher end devices.

After all this tussle, the two recently signed a patent licensing deal with each other. Under this deal, Qualcomm is granting Meizu, a worldwide royalty-bearing patent license for developing, manufacturing and selling certain 3G and 4G smartphones following the terms that the royalties produced by Meizu in China should adhere to the terms and conditions of the rectification plan which Qualcomm has submitted to the country’s National Development and reform Commission.

About the Author: Gaurav Giri, Sr. Executive Licensing at IIPRD and can be reached at: gaurav@iiprd.com

BlackBerry and India’s Optiemus Infracom sign’s licensing agreement to capture Asian smartphone market

BlackBerry once a phone innovator, was considered a game changer in 1999 when its mobile phone allowed on-the-go business people to access email wirelessly. BlackBerry devices were popular for a long time almost a decade. But with the introduction of the iPhone in 2007 and Google’s android in 2008 BlackBerry lost its market as a consequence of errors in its strategy and vision.

Blackberry is striving to get back into the smartphone market for which it is strategically using third parties to manufacture and market the Blackberry smartphones. India being the fastest-growing smartphone market in the world, everybody is looking at India as a huge landing ground. Trying to capture Asian smartphone market BlackBerry has signed a long term licensing deal with Delhi based Optiemus Infracom to manufacture and market smartphones in the South Asian countries like India, Bangladesh, Sri Lanka and Nepal.

Optiemus will focus on BlackBerry handsets priced between Rs 12,000 to Rs 20,000, which is the fastest growing segment in India. Under this aggrement Optiemus Infracom will perform all the services for Blackberry starting from manufacturing to selling the Blackberry smartphones in South Asia. Optiemus will provide all the customer support needed for the users. The Delhi-based firm is expecting to sell two million handsets in one year.

BlackBerry will also license its security software and service suite to Optiemus whereby it will launch BlackBerry smartphones running on Google Android operating system and position them as “secured” handsets. The handsets will also receive security updates directly from BlackBerry.

The agreement between BlackBerry and Optiemus also supports the Indian Government’s “Make in India” initiative, which aims to create local manufacturing and job opportunities. As per the agreement, Optiemus will follow BlackBerry’s recent global licensing agreement with TCL Communication and PT BlackBerry.

With this, BlackBerry now have licensees all over the world, in all markets to manufacture BlackBerry branded devices, proving the firm is delivering on its licensing strategy and accelerating its transition to be a ‘future-proof’ security software and services company.

About the Author: Gaurav Giri, Sr. Executive Licensing at IIPRD and can be reached at: gaurav@iiprd.com

Khurana & Khurana expands footprint in South East Asia

With business models over the world turning more idea-driven, Intellectual Property Rights (IPRs) are now one of the most valuable assets for any economy. With a significant increase in IPR related activities, South East Asia is developing as a key market for IP Protection and initiating Enforcement actions. Khurana & Khurana, Advocates and IP Attorneys (K&K) one of the leading IP and Commercial law firms in India is committed to provide high quality consistent End-to-End Legal Services in IP and Corporate Legal Matters, and with a belief that success comes only when one has a long-term perspective and high level of client orientation, we are expanding our footprints in South Asian countries (Bangladesh, Vietnam, Myanmar, Nepal) with our strong associations with an objective of being a single-point of contact for IP Prosecution Matters in South-East Asia.

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About K&K

Khurana & Khurana, Advocates and IP Attorneys (K&K) is more than a full-service Intellectual Property and Commercial Law firm.  K&K was formed with a very firm focus on providing end-to-end IP Prosecution/ Litigation and Commercial Law services in a manner that is Corporate Centric and follows stringent delivery practices that are consistent and are above-defined quality standards. K&K works closely with its sister concern IIPRD, both of which supplement each other in order to provide end-to-end IP Legal, Offshored IP Support, and Commercialization/Licensing services to over 3000 Corporates.

Our team of over 95 professionals spread across 6 Offices in India having high level of technical and legal competence, gives us the right competitive edge and positioning, as a law firm focused on creating immense IP value for our clients. K&K, through its experienced and qualified team of Attorneys/Practitioners, across Technology and Legal Domains, gives a rare synergy of legal opinion, out-of-box thinking for the protection of ideas/IP’s and entrepreneurial spirits to its client base. K&K is strongly ranked and recommended by Chambers and Partners, IAM, MIP, Legal 500, Asia IP, among other like agencies, and is an active member of INTA, APAA, AIPLA, LES, and AIPPI.

Fighting with Counterfeit Menace: Montblanc Simplo GmbH vs. Gaurav Bhatia & ors. CS(OS) 2563/2013: Granting Injunctive Relief

Introduction:

It always has been a well known fact that the markets in India are targeted by large number of counterfeit products/goods. Popular brands like LV, GUCCI, Burberry, Armani, Hermes inter alia; are frequently pirated in local commercial markets. Among others, the most popular counterfeit products in market include hardware, software, clothing, watches, writing instruments.

At that backdrop, Indian system is striving hard to deal with the menace caused by the counterfeit products in the market which not only endangers country’s reputation and goodwill but also affect country’s financial market. Indian judiciary has timely made its presence felt by passing landmark judgments with various issues Indian market is facing. Recently, Hon’ble Delhi Court passed orders in one such case which dealt with counterfeit issue.

Facts of the case:

Delhi High Court in its recent judgment dated January 04, 2017 in the matter of Montblanc Simplo GmbH vs.  Gaurav Bhatia & ors. CS (OS) 2563/2013, The Court has restrained an electronic commerce web portal functioning under the Trade name “www.DIGAA.com”. The Defendant’s impugned website was alleged dealing with the manufacturing, selling and advertising of counterfeit Montblanc products which are registered under the Trademark of the Plaitiffs.

Background of the case:

Plaintiff:

A German company incorporated under the laws of the country having its registered office at Hamburg. The registered company named “Montblanc Simplo GmbH” has its work engaged in the manufacturing, distribution and sales of pens & other writing instruments under the registered Trade name MONTBLANC MEISTERSTUCK,. The plaintiff’s company Trademark also include “The Star Device” which is a white stylized six pointed star with circular edges and the “The three ring Device” comprised of three metallic bands located close to the middle of body of pen cap. The plaintiff’s company claims its product registered under proprietors name within India as well as other countries across the world.

In July 2013, the plaintiff through its office in India came to know that the said defendant was selling counterfeit products on a lesser rate from original product of plaintiff. The defendant represented his product as original product of Plaintiff Company. Hence, the present suit was filed.

Submission by the parties:

Plaintiff’s Submission:

  • Plaintiff claimed that his company is losing reputation and trust of his clients because of defendant’s counterfeited products. Plaintiff claimed to be suffering loss and demanded damage worth INR 2,005,000.
  • Plaintiff stated the price of original MEISTERSTUCK CLASSIQUE is INR 30,000 whereas the defendants were selling similar counterfeit product for INR 6,860.
  • Plaintiff in his submission stated that they purchased writing instrument, namely, the MEISTERSTUCK CLASSIQUE from the website defendant was using to sell the products, which were being sold at a discounted price and falsely represented as a product of the plaintiff upon examination that the product was a counterfeit.
  • It was submitted by the plaintiff that the defendant’s product is of inferior quality; also the refill used in Defendants instrument was different than that of original product. Defendant’s instrument has a different color combination than that of plaintiff. Also, the tip of the refill of defendant’s writing instrument has a plastic ball which is different than that of plaintiff’s original product. The serial numbers on the product were also fabricated by the defendant.

The defendants after filing their Written Statement stopped appearing in court and the suit was preceded Ex-parte.

Observation by the Hon’ble court:

  • Court observed some of the consumers complaints filed against the defendant including one customer who purchased counterfeited product from defendant and suffered subsequently lodged a complaint before the cyber cell of Chandigarh Police under section 420 & 406 of Indian Penal Code and section 66A of Information Technology Act.
  • Plaintiff’s brand name MONTBLANC is a well-known mark having goodwill and reputation in its market. It is also proved that public identified plaintiff’s product from its trade dress which includes “The Star Device” and “The Three Ring Device”.
  • Plaintiff also proved on record its notice published in India, and related information from the defendant’s web portal displaying counterfeit products of the plaintiff’s Trademark, They also attached the invoice alongside of the purchased products and photographs of counterfeit products and their warranty card.
  • The court observed that the plaintiff had proved that the defendant was counterfeiting its goods and thereby, infringing its Trademark.

Held:

The Hon’ble Court, in view of the above case granted relief of permanent injunction against the Defendants as sought by the plaintiff  and also passed a restraining order against them to restrain them from Passing-off their counterfeit products as that of plaintiff’s. However, the claim for damages was rejected by the court on the ground that Plaintiffs have not produced sufficient evidence to show the extent of actual damage suffered by the company. Hence, the judgment was in the favor of the plaintiff. Pertinently, it is important to note that in order to claim damages proper and sufficient evidence must accompany to get monetary relief against damages suffered.

About the author: Mayank Srivastav, an intern at Khurana & Khurana, Advocates and IP Attorneys

Export under section 107A of Indian Patent Act, 1970

In the case of Bayer Corporation versus Union of India & ors (W.P.(C) 1971/2014) and Bayer Intellectual Property Gmbh & Anr versus Alembic Pharmaceuticals ltd (CS(COMM) No.1592/2016), High Court of Delhi in the consolidated decision dated March 08, 2017, adjudicated on the issue whether Section 107A of the Patents Act, 1970 permits export from India of a patented invention, even if solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product.

Though it’s been almost five years after first compulsory license (in India) was granted to Natco in 2012 against Bayer’s Patent IN215758 covering Nexavar (Sorafenib ), Bayer and Natco are fighting it hard in 2017 as well. One of the terms of Compuslory License was “solely for the purposes of making, using, offering to sell and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the territory of India”.

Subsequently, Natco was permitted to export the drug SORAFENIB TOSYLATE not exceeding 15 gm for development / clinical studies and trials. Natco again applied for permission to export 1 Kg. of Active Pharmaceutical Ingredient (API) SORAFENIB to China for the purposes of conducting development / clinical studies and trials, to which Bayer objected.

To better understand the issue at the heart of this decision, it’s important to understand section 48 of the Indian Patent Act, 1970 which gives rights of Patentee and section 107A of the Indian Patent Act, 1970 which lists out activities which shall not be considered to be infringement of Patent.
Both the sections have been reproduced below for convenience.

Section 48:

Subject to the other provisions contained in this Act and the conditions specified in section 47, a patent granted under this Act shall confer upon the patentee—

(a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that product in India;

(b) where the subject matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India.

Section 107A:

For the purposes of this Act,— any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product; (b) importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product, shall not be considered as a infringement of patent rights.

Natco pleaded that export of the Patented invention for the use reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product is squarely covered under section 107A. It also submitted that its intentions were not for commercial purpose. Natco also submitted that grant of Compulsory License does not take away the rights to export the Patented invention for the purposes of section 107A.

Bayer alleged that 107A of Indian Patent Act does not allow exporting of drug even for the purposes of reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product. Bayer tried to draw attention to the fact that language of section 107A does not use the word ‘export’ but uses the word ‘import’. Bayer alleged that absence of the word ‘export’ clearly indicates the purpose of the law was not to allow the export of the patented invention and the words ‘in a country other than India’ should be interpreted only to allow export of the information generated by experiments in India. Patented invention as such cannot be exported from India to generate information to be submitted in other countries. The word selling should be interpreted to mean selling in India and not outside. Bayer alleged that if law intended to allow export, language would have expressly included that as it has included import. In summary, Bayer requested the court to interpret the word sell to mean selling without exporting, i.e. selling in India. Bayer importantly also alleged that exporting under 107A of Patented invention for which compulsory license was granted would result in the abuse of law.

On 5th November, 2014, Natco was permitted export of SORAFENIB for carrying on activities for obtaining regulatory approvals within the meaning of Section 107A of the Act. Bayer preferred appeal against the said order and which was disposed of by expediting the hearing of the writ petition and by prohibiting export till the decision of the writ petition. The hearing of the writ petition commenced on 7th September, 2015 and concluded on 8th July, 2016, when orders were reserved.

Natco had also brought attention to the fact that China requires clinical trials to be conducted in China and do not recognize clinical trials conducted in India. This makes it mandatory for Natco to seek export under section 107A so that it can launch the product in China immediately after term of patent is over.

CS(COMM) No.1592/2016 was filed by Bayer to injunct Alembic from making, selling, distributing, advertising, exporting, offering for sale and in any manner directly or indirectly dealing in Rivaroxaban‘ and any product that infringes Bayer‘s patent IN 211300. Alembic was manufacturing and exporting RIVAROXABAN to the European Union and had made multiple Drug Master File submissions to the United States Food and Drug Administration in the United States of America for the drug RIVAROXABAN. Alembic alleged that exports being effected by Alembic were within the meaning of Section 107A only.

For both cases, court held after referring different dictionaries that selling cannot be interpreted to mean to exclude exporting. Also court found that Patent Act does not require court to do so. Court also brought attention to the fact that even absence of the word ‘export’ in section 48 does not prevent Patentee from restricting third parties from exporting patented invention. Court explained that it’s not the exporting of information is allowed but it’s the Patented invention. The words ‘in a country other than India’ are for the law in force (of country where information is required).
Court also went on to hold that even when compulsory license is granted, Natco as a non-patentee cannot be deprived of making, constructing and selling by way of export a patented invention for purposes specified in Section 107A.

Court gave the liberty Bayer to, if makes out a case of the exports effected or to be effected being for purposes other than specified in Section 107A, take appropriate proceedings therefor.

About the Author: Swapnil Patil, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at: swapnil@khuranaandkhurana.com.

India’s time to delve into IP laws

Shireen Shukla, legal intern at Kkurana & Khurana, probes the recent International IP Index report, released by U.S. Chamber of Commerce, where India stood at 43rd position, out of 45 countries.

On 8th February, 2017 U.S. Chamber of Commerce released its 5th annual International IP Index, “The Roots of Innovation,” rating 45 world economies on patents, trademarks, copyright, trade secrets, enforcement, and international treaties with the aim to provide both, an IP report card for the world and a guidebook for policymakers seeking to bolster economic growth and innovation.

It is an undeniable fact that protection of intellectual property serves dual role in the economic growth of a country. Where on one hand it promotes innovation by providing legal protection of inventions, on the other it may retard catch-up and learning by restricting the diffusion of innovations. Therefore a sounder IPR protection in a country encourages technology development and technology transfer from developed to least developed countries. Countries that would demonstrate a commitment to IP laws will only reap rewards.

Often we have seen that major companies and brands invest their money or open their outlets in another country only after seeing the soundness of their IP laws. This proves the role of IP laws and enforceability on the GDP of a country.

GIPC is leading a worldwide effort to champion intellectual property rights as vital to creating jobs, saving lives, advancing global economic growth, and generating breakthrough solutions to global challenges  (Reddy, 2017). The Index ranked the IP systems of 45 countries. Where on one hand United States was ranked number 1, India and Pakistan were ranked 43 and 44 respectively.

Image Source: U.S. Chamber International IP Index: http://www.theglobalipcenter.com/ipindex2017-chart/#

 

Some major facts from the IP Index:

  • A pack of global IP leaders emerged among the 2017 Index rankings, with the U.S., UK, Japan, and EU economies, ranked more closely together than ever.
  • Canada signed the Comprehensive Economic and Trade Agreement (CETA), which raised the bar for life sciences IP protection.
  • Russia introduced new forced localization measures.
  • Japan’s score increased by 10% due to ratification of TPP and accession to the Index treaties.
  • South Korea passed amendments to the Patent Law.
  • Uncertainty around software patentability, Section 3(d) of the Patent Law, and High Court copyright decisions in India continue to present challenges.
  • Indonesia’s Patent Law included a heightened efficacy requirement and outlawed second use claims.
  • South Africa introduced new local procurement policies.
  • UAE created a specialized IPR Court.
  • Indian government issued the National Intellectual Property Rights Policy in 2016.

India announced the much-awaited National IPR Policy in May 2016. This act proved to be a positive attitude to foster the IP laws in India. The Policy is a boon for the IP industry as it provides constructive ways and methods to improve IP administration. The policy has enumerated the importance to educate Indian businesses about IP rights.

The Policy makers realizing the real issue in hand, addressed a number of important gaps in India’s national IP environment, which included the need for stronger enforcement of existing IP rights through the building of new state-level IP cells and investing more resources in existing enforcement agencies; reducing processing times for patent and trademark applications; as well as the need for introducing a legislative framework for the protection of trade secrets

Major developments and landmark judgments in Intellectual property laws since 2015:

  • The Delhi high court on 7 October 2015, barred Mumbai-based Glenmark Pharmaceuticals Ltd from selling, distributing, marketing or exporting its anti-diabetes drugs Zita and Zita-Met,as they tentatively infringed the patent of US-based pharmaceuticals company Merck Sharp and Dohme Corp.
  • In March, 2016, the Delhi High court in the case of Ericcson v. CCI for the first time ever, considered at how IP law interfaced with competition law. It allowed Competition Commission of India (CCI) to continue its investigation into anti-competitive practices by Ericsson regarding use of its SEP’s by other companies such as Micromax and Intex.
  • National IPR Policy in 2016, released last year is entirely compliant with the WTO’s agreement on TRIPS.
  • Examination time for trademarks has been reduced from 13 months to 8 months in the 2016 policy.
  • Bombay HC passed a series of judgments cases (Phantm Films pvt, Ltd. v. CBFC & Anr; Eros International Media Ltd. & Another v. Bharat Sanchar Nigam Ltd.) laid down a strict agenda for the grant of John Doe orders leading to path breaking shift in the John Doe jurisprudence in India. The above-mentioned judgments are focused on balancing the interests of not just copyright holders but also the Internet users and innocent third party providers.
  • The judgment by Bombay HC in Eros v. Telemax, is a pioneer that unwrapped the scope of arbitration of IP disputes arising out of licensing and other commercial transactions.
  • In December 2016, the Delhi High Court in the case of Agri Biotech v. Registrar of Plant Varieties declared section 24(5) of the Plant Varieties Act unconstitutional. The court giving a momentous judgment stated that the section violates Article 14 as it gives unchecked powers to the Registrar. The registrar is not required to be from a legal background in order to grant interim relief to a breeder against any abusive third party act during the period its registration application is pending.This lead to arbitrary use of powers by the registrar.

Beside the above-mentioned developments and progressions, PM Narendra Modi’s “Make in India” initiative also aims to promoting foreign direct investment and implementing intellectual property rights. In these initiatives, the government has decided to improve the intellectual property rights for the benefit of innovators and creators by modernizing infrastructure, and using state of the art technology.

One of the most recent and effective change brought in the trademark rules was on 6th march 2017, where the number of trademark forms have been reduced from 74 to 8 with an aim of simplifying the process of trade mark applications. The new rules promote e-filling of the trademark applications. The fee for online filing of the application is 10 per cent lower than that of the physical filing.

Steps India can take to strengthen its IPR laws:

  • India should implement speedy examination and registration procedures.
  • It should take effective steps to achieve the target of one month (as stated in IPR policy 2016).
  • The number of patent examiners and trademark offices should be increased to improve efficiency and disposal speed.
  • Section 3(d) of India’s Patent Act 1970, relating to restrictions on patenting incremental changes should be amended. Norms relating ever greening should also be revised.
  • A new and revised IPR laws and policies should be implemented so as to make it compatible with IPR laws of WIPO, TRIPS and other major dominant countries like US & UK

Every fiscal year, enormous time and money is being invested on R&D to improve the existing status of the Intellectual property laws in India, to bring it at par with the IP laws of US. We hope by following the above guidelines and following the National IPR Policy, India’s position improves in the next International IP Index 2017.

References :

  1. Prashant Reddy, The Press Release Journalism Around the GIPC IP Index, February 13, 2017, < https://spicyip.com/2017/02/the-press-release-journalism-around-the-gipc-ip-index.html&gt; Last accessed: 28th February 2017
  2. Merck Sharp And Dohme Corporation. v. Glenmark Pharmaceutical, FAO (OS) 190/2013, C.M. APPL. 5755/2013, 466/2014 & 467/2014, (Delhi High Court) (20.03.2015)
  3. Telefonaktiebolaget LM Ericsson v. Competition Commission of India, W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014, (Delhi High Court) (30.03.2016)
  4. Phantom Films Pvt. Ltd. v. The Central Board of Film Certification, W.P.(L) 1529 /2016, (Bombay High Court) (13.06.2016)
  5. Eros International Media Limited v. Bharat Sanchar Nigam Limited, C.S. No.620 /2016 & O.A.Nos.763 to 765/2016 (Madras High Court) (25.10.2016)
  6. Eros International Media Limited v. Telemax Links India Pvt. Ltd., Suit no. 331 /2013, (Bombay High Court) ((12.04.2016)
  7. Prabhat Agri Biotech Ltd. v. Registrar of Plant Varities, W.P.(C) 250/2009, (Delhi High Court) (02.12.2016)

 

THE TRADE MARK RULES, 2017: AT A GLANCE Simple. Straightforward. Faster.

The Trade Mark Rules, 2017 notified and came into effect on 6th March 2017 repealing the Trade Mark Rules, 2002. These rules have been framed with the intention of simplifying and expediting the procedure for registration of Trade Marks in India.

 Key Highlights of the New Rules:

  • Categorization of Applicant and Fees
  • Increase in Fees
  • Reduction in Forms from 75 to 8
  • E-Communication for Faster Processing
  • Request for Well Known Trade Marks
  • Provision for Sound Mark
  • Prior User Affidavit in case of prior use claim
  • Dispensing of Service of Notice of Opposition if Counter Statement is filed prior to service:
  • Expedited Registration Process
  • Provision for Hearing through Video Conferencing or audio-visual communication devices
  • Limited Adjournments
  • Renewal of Registration
  1. CATEGORIZATION OF APPLICANT:

Under the new rules, the Applicants are categorized as An individual, Start Up, Small Enterprise and other than this, wherein “Startup” means an entity in India recognised as a startup by the competent authority under Startup India initiative, and in case of a foreign entity, an entity fulfilling the criteria for turnover and period of incorporation / registration as per Startup India Initiative and submitting declaration to that effect.

While “Small Enterprise” has been defined as in case of an enterprise engaged, in the manufacture or production of goods or providing services, an enterprise where the investment in plant and machinery or equipment in case of services does not exceed the limit specified for a medium enterprise under sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006);

  1. INCREASE IN OFFICIAL FEES:

In case the applicant is individual/ Start Up/ Small Enterprise, the official fees for filing of trade mark is now 5000/- per mark per class, however in case of E-filing the fees to be paid would be INR 4500/- per mark per class. In all other cases, the official filing fees is INR 10000/- per mark per class for physical filing and INR 9000/- per mark per class for E-filing.

For almost all applications/requests, the fees have been increased by 100%. However, on each fees 10% concession is applicable in case of E-Filing in order to encourage E-filings.

  1. REDUCTION IN NUMBER OF FORMS:

The number of Forms has been steeply reduced from 75 to 8 and this reduction will definitely make the process lucid and short. The numbers have been replaced with the alphabet. These are the list of forms introduced by the Trademark Rules, 2017 (hereinafter referred to as Rules):

  • TM-A: Application for Registration for goods and services (one or more than one class) [marks, collective marks, certificate marks, series].
  • TM-M: Amendment of Trademark application; seeking grounds of decision; application of deposition of regulation of collective trademark; alteration of regulation of certification trademark; request for certified copy; duplicate registration certificate; extension of time; request to review of decision to Registrar; inspection of document; request to Registrar for particulars of advertisement; review of Registrar’s decision; petition (not otherwise charged) for obtaining Registrar’s order for any interlocutory matter in a contesting proceeding; request to inclusion of a mark in list of well-known trademarks; any other matter not covered in other TM forms.
  • TM-R: Application of renewal of a trademark; request for renewal with surcharge; request for restoration of a trademark.
  • TM-C: Application for search certificate request.
  • TM-O: On a notice of opposition; application for rectification of register; application under rule 99, 135, 140; application under Section 25 of Geographical Indication of Goods Act, 1999 to invalidate a trademark or counter statement thereto.
  • TM-P: Request to replace subsequent proprietor as registered proprietor on register, request to amend the details of registered proprietor or registered user(s); request to amendment of registered trademarks; request for amendment in specification of goods or services; request for conversion of goods; request for dissolution of association between trademarks.
  • TM-U: Application for recordal of registered user(s); request for amendment in details of registered user(s); application for cancellation or variation or registered user(s); application for intervene in the proceedings by third party.
  • TM-G: Application of registration of a trademark agent; request for continuation as a trademark agent; restoration of the trademark agent name in register; alteration related to details of trademarks agents in the register.
  1. E-COMMUNICATION FOR FASTER PROCESSING:

New Rules provides that all applications, notices, statements, papers having representations affixed thereto, or other documents authorised or required by the Act or the rules made there under, served, left or sent, at or to the Trade Marks Registry or with or to the Registrar or any other person may be delivered by hand or sent through the post by a prepaid letter or may be submitted electronically in the manner as laid down by the Registrar.

  1. REQUEST FOR WELL-KNOWN TRADE MARKS:

Rule 124 of the Rules provides that any person may request the Registrar for determination of a mark as well-known by submitting such request under form TM-M. A statement of case along with all the evidence and documents relied by the applicant in support of such claim shall accompany such application. The Registrar may invite objections from the general public while considering such applications. These objections must be filed within 30 days of the invitation. In case the trademark is determined as well-known, the same shall be published in the trademark Journal and included in the list of well-known trademarks. The fee for the request to include a trademark in the list of well-known trademarks is INR 1, 00,000.

  1. PROVISION FOR SOUND MARKS:

Rule 26(5) of the Rules provides that when the application has been made for a Sound Trademark, it shall be reproduced in MP3 Format not exceeding a length of 30 seconds, recorded on a medium that allows for easy and clearly audible replaying quality along with a graphical representation of its notation. TM-A provides that in case of sound marks representation of specific musical notes must be submitted at the place provided for the trademark.

  1. PRIOR-USER AFFIDAVIT:

When the use of the trademark is claimed prior to the date of application, the applicant shall file an affidavit testifying to such use along with supporting documents.

  1. DISPENSING OF SERVICE OF NOTICE OF OPPOSITION IF COUNTER STATEMENT IS FILED PRIOR TO SERVICE:

Rule 42 of the Rules provides for the notice of opposition. Ordinarily, the Registrar shall serve a copy of the notice of opposition to the applicant(s) within 3 months from its receipt at the office. But, if the applicant has already filed the counter statement on the basis of copy of notice of opposition available on the official website, the requirement of the service of such copy to the applicant(s) shall be dispensed with (not needed).

  1. EXPEDITED PROCESS OF APPLICATION:

On an application for expedited examination, the proceedings such as examination, the consideration of response to the examination report, scheduling of show cause hearing, if required, the publication of the application and the opposition thereto, if any, till final disposal of the application shall also be dealt with expeditiously subject to such guidelines as may be published in this regard by the Registrar in the trademarks Journal.

  1. PROVISION FOR HEARING THROUGH VIDEO CONFERENCING OR AUDIO-VISUAL COMMUNICATION DEVICES

Hearing may also be held through video-conferencing or through any other audio-visual communication devices and in such cases the hearing shall be deemed to have taken place at the appropriate office.

  1. RENEWAL OF REGISTRATION:

An application for the renewal of the registration of a trademark shall be made in Form TM-R along with the prescribed fee. Such renewal of a mark can be done 1 (one) year prior to the expiration of its registration whereas in the Repealed Rules it was 6 (six) months prior to the expiration of registration.

CONCLUSION:

The new Rules have expressly promoted digital filing which will make the process efficient and shorter. The electronic services provided will expedite the processing of applications as all the documents shall be furnished and received (exchanged) via e-mails. This will enable faster registration.

BLACKBERRY SUES NOKIA FOR PATENT INFRINGEMENT: AN OVERVIEW

The once powerful mobile phone companies BlackBerry and Nokia are in the headlines again, not for their new technological developments but because of their legal battle.

The Valentine’s Day card for Nokia was in the form of complaint entailing 11 items that Blackberry did not like about it. The complaint listed out the 11 patents of Blackberry infringed by Nokia. The company has not commanded an injunctive relief, i.e. asking Nokia to stop using the patents; instead it has asked for compensation for the unauthorized usage of the said patents. Let’s have a brief overview of the case.

Blackberry:

Headquartered in Waterloo, Ontario, Canada, Blackberry Limited, formerly known as Research In Motion (RIM), was founded by two engineering students, Mike Lazaridis and Douglas Fregin in 1984. It is a multi-national wireless telecommunications software and mobile hardware company, currently chaired by John S. Chen. It had taken over the smart phone market with its flagship QWERTY keypad range of mobile phones. Blackberry uses its own operating system, and had recently entered the Android arena of smart phones. It had ruled the gadget market with its classy, easy and appealing technology and applications for over two decades until its plunge with the launch of Apple iPhone and other Android phones. It had also developed key innovations that underlie 3G and 4G mobile communication technologies, such as Long-Term Evolution (LTE), including LTE Advanced and Universal Terrestrial Radio Access Network (UTRAN) technologies, and Universal Mobile Telecommunication Systems (UMTS). Blackberry’s contribution to innovation, including investment in research and development has exceeded a total of $ 5.5 billion, and has protected the technical innovations by seeking patents from the US office.

Nokia:

In a paper mill in 1865, Nokia was created by Fredrik Idestam and Leo Mechelin in South-west Finland. It is a multinational communications and information technology company, considered to be one of the most important Fortune 500 organizations. Nokia launched Mobira Cityman in 1987, the world’s first handheld phone. The most famous Nokia’s first GSM handset, Nokia 1101, was a swift hit in the market when it was launched in 1992. The partnership of Nokia with Microsoft It is presently chaired by Rajeev Suri. With the ingression of new companies, Nokia has tumbled down.

Connecting the dots:

Rockstar Consortium Inc. (also Rockstar Bidco) was formed in 2012 to settle and negotiate patent licensing acquired from the bankrupt multinational telecommunications and data networking equipment manufacturer Nortel. It comprises of five members: Apple Inc. Blackberry, Ericsson, Microsoft and Sony.

Rockstar Consortium bought Nortel’s IP in 2011 for $ 4.5 Billion, and created a special-purpose-patent-assertion company to use them. The IP consisted of over 6000 patents covering 4G wireless innovations and a range of technologies. Nokia had also made an attempt to buy Nortel’s IP in 2009, but was unable to obtain them due to the latter’s bankruptcy proceedings. In 2012, Rockstar Consortium was also listed, by the Business Insider, as the 3rd most fearsome (out of 8) “patent trolls” in the industry.

Rockstar initiated a lawsuit against 8 companies in 2013, including Google, Smasung, and other Android phone makers. When the IP was purchased by it, Google anticipated this scenario. The complaint encompassed 6 patents, all from the same patent family. The case was settled on confidential terms.

untitled

Blackberry sues Nokia: Case name:

Blackberry Limited   [Plaintiff]

Vs.

Nokia Corporation, Nokia Solutions and Networks Oy, Nokia Solutions and Network Holdings USA Inc., and Nokia Solutions and Networks US LLC                 [Defendants]

Case number and Court:

17- 155, United States District Court for the District of Delware (Wilmington). This Court has personal jurisdiction over each of the defendants under the Delware Long-Arm Statue, 10 Del. Code § 3014, and the U.S. Constitution. The Court has jurisdiction over this controversy under 28 U.S.C. §§ 1331 and 1338(a). The action for patent infringement has arisen under the patent laws of the United States, 35 U.S.C. § 1 et seq., including but not limited to 35 U.S.C. § 271.

Allegations:

Blackberry has filed this complaint against Nokia due to the latter’s unauthorized usage of the former’s contributions to innovation technologies. Blackberry holds the following 11 patents, known as “Asserted Patents” (enforcement of patent by the owner who believes that his patent has been infringed) which are the subject matter of the case:

  1. ‘418 Patent: United States Patent No. 6,996,418 is entitled “Apparatus and Method for PFDM Data Communications” and was issued on February 6, 2006.
  2. ‘246 Patent: United States Patent No. 8,254,246 is entitled “Scattered Pilot Pattern and Channel Estimation Method for MIMO-OFDM Systems and was issued on August 28, 2012.
  3. ‘090 Patent: United States Patent No. 8,494,090 is entitled “Detecting the Number of Transmit Antennas in a Base Station” and was issued on July 23, 2013.
  4. ‘305 Patent: United States Patent No. 7,529,305 is entitled “Combination of Space-Time Coding and Spatial Multiplexing, and the Use of Orthogonal Transformation in Space-Time Coding” and was issued on May 5, 2009.
  5. ‘433 Patent: United States Patent No. 8,861,433 is entitled “Method for Accessing a Service Unavailable through and Network Cell” and was issued on October 14, 2014.
  6. ‘697 Patent: United States Patent No. 9,426,697 is entitled “Method for Accessing a Service Unavailable through and Network Cell” and was issued on August 23, 2016.
  7. ‘772 Patent: United States Patent No. 9,253,772 is entitled “System and Method for Multi-Carrier Network Operation” and was issued on February 2, 2016.
  8. ‘192 Patent: United States Patent No. 8,897,192 is entitled “System and Method for Discontinuous Reception Control Start Time” and was issued on November 25, 2014.
  9. ‘202 Patent: United States Patent No. 9,125,202 is entitled “Multi-Beam Cellular Communication System” and was issued on September 1, 2015.
  10. ‘683 Patent: United States Patent No. 8,243,683 is entitled “Method and Apparatus for State/Mode Transitioning” and was issued on August 14, 2012.
  11. ‘829 Patent: United States Patent No. 8, 644,829 is entitled “Method and Apparatus for Signaling Release Cause Indication in a UMTS Network” and was issued on February 4, 2014.

Blackberry is the owner of all rights, title and interest in the aforementioned patents, with the full and exclusive right to bring suit to enforce them, including the right to recover for past infringement. Blackberry and RIM have publicly declared to the European Telecommunications Standards Institute (ETSI), an industry organization that promulgates wireless telecommunication standards specified by 3GPP (3rd Generation Partnership Project), that the Asserted Patents may be or may become essential to LTE Standards and/or UMTS/UTRAN Standards [practising wireless telecommunication standards], and the declaration is in public domain, accessible on a search engine provided and maintained by ETSI (https://ipr.etsi.org/).

Nokia has taken action intending to cause others to directly infringe the patents, including by selling or offering for sale the Infringing Products to third parties in the United States while expressly promoting these products’ capability to practice the LTE Standards, knowing that using these products to practice the LTE Standards would constitute direct infringement of the ’418 patent.

Infringing Products:

The 3GPP specifications that enumerate LTE and UMTS/UTRAN Standards are and have been implemented in Nokia’s products like Nokia’s Flexi line of products, alone or in combination with Nokia software such as the Nokia Liquid Radio Software Suite (collectively, the “Infringing Products”).  The Infringing Products include, without limitation, the following products, alone or in combination:  Nokia’s Flexi Multiradio and Multiradio 10 base stations, the Flexi Zone (small cell) Micro and Pico base stations, Femtocell base stations, Flexi Network Server, the Flexi Radio Antenna System, Nokia radio network controllers, and Nokia Liquid Radio Software Suite.

Knowledge:

Blackberry alleges that Nokia had knowledge of the existence of the applications for or the family members of the Asserted Patents as it had used the same in various patent prosecutions of its own.

  • The family members of the ‘246 patent were cited in an international search report and were also cited by Nokia and by an examiner during prosecution of a number of patent applications assigned to Nokia. Hence, it had notice of this patent before the filing of this action.
  • The publication of parent application of the ‘090 patent was cited in an international search report, and was also cited by Nokia during prosecution of a number of patent applications assigned to it. Hence, it had notice of this patent before the filing of this action.
  • The publication of parent application of the ‘772 patent was cited by examiners during prosecution of a number of patent applications assigned to it. Hence, it had notice of this patent long before the filing of this action.
  • The publication of parent application of the ‘192 patent was cited by the examiner during prosecution of at least one patent application that was assigned to Alcatel-Lucent, which was acquired by Nokia. Hence, Nokia had notice of this patent long before the filing of this action.
  • The publication of the priority application of the ‘202 patent was cited by examiners during prosecution of a number of applications that were assigned to Alcatel entities, which were acquired by Nokia. Hence, it had notice of this patent long before the filing of this action.
  • Long before the filing of this action, Nokia knew or should have known from the prosecution of its own patent applications and those of Alcatel-Lucent that the asserted ’246, ’090, ’772, ’192, and ’202 patents covered LTE features used by their Infringing Products.
  • The publication of the application that resulted in the issuance of the ‘683 patent was cited by the examiner during prosecution of a Nokia patent application. Hence, Nokia had notice of this patent long before the filing of this action.
  • The publication of the application that resulted in the issuance of the ‘829 patent was cited by Nokia during prosecution of a Nokia patent application. Hence, Nokia had notice of this patent long before the filing of this action.
  • Long before the filing of this action, Nokia knew or should have known from the prosecution of its own patent applications that the asserted ‘683 and ‘829 patents covered UMTS/UTRAN features used by their Infringing Products.
  • By April 10, 2012, RIM had acquired the ’418, ’246, and ’305 patents and had caused to be recorded at the USPTO the assignments of ownership of these patents to RIM. Currently, the assignment of these patents to Blackberry has been recorded in the USPTO. Nokia has knowledge of the same through its due diligence of Nortel U.S. patents.

Infringement Claims:

Nokia knowingly and intentionally encourages and aids at least its end-users to directly infringe the asserted patents. Nokia has been, and currently is, an active inducer of infringement of these patents under 35 U.S.C. § 271(b) and a contributory infringer under 35 U.S.C. § 271(c). It has been willfully blind to the existence of the patents. Nokia’s infringement has been, and continues to be, willful and deliberate, and has caused substantial damage to BlackBerry. Nokia developed, commercialized, demonstrated, and/or tested the Infringing Products despite its evaluation and knowledge of the Nortel patent portfolio, including the application that led to the issuance of some patents, and its knowledge of family members of a few of the 11 patents from prosecution of its own patent applications. In spite of Nokia’s knowledge of the patents, Nokia has continued making, using, offering for sale/lease, and/or selling or leasing in the United States, and/or importing into the United States, the Infringing Products that are compliant with the LTE Standards, without a license from BlackBerry.  Nokia’s egregious infringement behavior warrants an award of enhanced damages.

Prayer for relief:

Blackberry prays that the Court:

  • Render judgment declaring that Nokia directly infringed, induced others to infringe, and/or contributed to the infringement of the asserted patents.
  • Award BlackBerry damages adequate to compensate it for Nokia’s infringement of the asserted patents.
  • Award an ongoing royalty for Nokia’s ongoing infringement of the asserted patents.
  • Render judgment declaring Nokia’s infringement of the asserted patents willful and deliberate, and award BlackBerry enhanced damages pursuant to 35 U.S.C. § 284.
  • Award BlackBerry pre-judgment and post-judgment interest to the full extent allowed under the law, as well as BlackBerry’s costs and disbursements.
  • Enter an order finding that this is an exceptional case and awarding Blackberry its reasonable attorneys’ fees pursuant to 35 U.S.C. § 285.
  • Award any other relief as the Court deems fit.

Conclusion:

Both the companies are having a downfall in their sales. Blackberry has stopped making smart phones, and Nokia has had a huge decrease in sales of its one-of-a-kind Lumia phones, manufactured in collaboration with Microsoft. Blackberry has started licensing its software and brand assets to others so that its name in the market continues. Also, it pledged to license these patents as they form essential elements for mobile telecommunication standard.  As is evident from the prayer of the complaint, no injunction has been claimed for. Instead, Blackberry has claimed damages and royalty for the unauthorized use of its patents. This is a smart move by the smart phone maker to commercialize on its leftover assets. Nokia has not responded to this complaint as of now, and is looking into the matter, as per a news article. Nokia’s counter is acutely awaited.

About the Author :

Ms. Aditi Tiwari, intern at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the intern and do not reflect the views of either of any of the employees or employers.Queries regarding this may be directed to swapnils@khuranaandkhurana.com

 

FRAND-ING PATENT LICENSES AND ITS IMPLICATION IN LANDMARK CASES IN INDIA

Everyday, a number of products are being invented all over the world, some cascading over the improvement of existing inventions, and the others, portraying a unique set of methods and products unknown to man at large. Simultaneously, there is an eruption of infringements that remain unnoticed or noticed following an incredulous load of proceedings and exorbitant costs. It is essential to protect the rightful rights of these owners against such infringements and unlawful interference to avoid any possible losses or damages in their peaceful functioning of their entities. In the field of protection of inventions, the adoption of Agreement of Trade Related aspects of Intellectual Property Rights (TRIPS) and the Patent Act, 1970 and related amendments aim to let these owners benefit from their inventions without any unnecessary disturbance.

1. DEFINING STANDARDS

In our day-to-day activities, we try to sculpt our needs as per certain benchmarks to achieve our desired results. Similarly in the field of patents, every invention requires certain targets to abide by in order to facilitate an irreplaceable position in the market. To put it technically, standards are technical specifications that seek to provide a common design for a product or process[1]. Ensuring that the products conform to standards facilities almost definite reliability, quality, stability when purchasing the products and subsequently, an increase in their demand. To lay it down simply, a standard is a document that exhibits certain requisites for a particular product, element, system or service or elaborately describes a specific method. Formal standards are declared by Standard Setting Organizations (SSOs) and include establishments such as the European Telecommunications Standards Institute (ETSI), Institute for Electrical and Electronics Engineers (IEEE) and various other ad hoc informal organizations[2].   Standards can also be of two different kinds- those with are mandatory or those that are up to one’s discretion[3].

2. STANDARD ESSENTIAL PATENTS

The concept of Standard Essential Patents (SEPs) cropped up when controversies between smartphone giants came about. Standard Essential Patents are basically, patents that inform the users or anyone else that the particular invention conforms to a particular standard denoted by that patent. SEP was also defined by the Washington District Court in Microsoft Corp. v Motorola Mobility, Inc.[4], as “A given patent is essential to a standard if use of the standard required infringement of the patent, even if acceptable alternatives of that patent could have been written into the standard”. It is a universal truth that consumers prefer standard compliant products as they deliver an incorrigible quality. Thus, in order to save a spot in the demand market, the inventors are forced to adopt technologies conferred by Standard Essential Patents. In turn, these SEP holders gain a huge competitive edge in the market and do not face any competition until they expire and move into the public domain.

3. FAIR, REASONABLE AND NON-DISCRIMINATORY TERMS (FRAND)

Due to the ubiquitous yearning for snowballing sale of one’s products, the market players are in a constant struggle to find the most desirable, the most profitable, and the most economically efficient techniques to garner demand for their brands. For this reason, SEPs play an unparalleled role to fulfill such wishes of the inventors. However, this also means that they have unbridled power in the market. Creating a monopoly of such SEP holders would be detrimental to the inventors, as they will have no say in the unfair and discriminatory terms brought before them. They will be forced to succumb to such terms for meeting the primary objective of every company in the market. There are a number of issues that rise during the event of licensing SEPs to other companies that inevitably cause a disruption in the unadulterated functioning of licenses in the country. A commonly occurring issue is patent holdup when an SEP holder realizes his irreplaceability in the market and consequently, causes a rise in the royalty rates to order to unjustly profit from his dominance, thereby burdening the licensee companies. Another frequent issue is royalty stacking where the companies are forced to pay for all the patents held by the SEP holder, patents that are not even incorporated by them in their products, purely under the coercion by the SEP holders of revoking the license

Hence, in order to evade such prejudiced demands of the SEP holders, the concept of FRAND was incorporated. The SSOs stress the requisite for such holders to enter into a promise to not cultivate any unwanted competitive strategies and misuse of the power granted to them. This promise is to coincide with the FRAND terms. Following the licensing strategies stated under the FRAND terms forms the basis of the standard development process. Conformance to FRAND terms guarantee that the SEP holders do not abuse their dominant position in the market and they license SEPs to desiring companies in a ‘fair, reasonable and non-discriminatory’ manner.

4. THE ERICSSON AND MICROMAX CASE

On the 4th of March, 2013, Ericsson filed a case of patent infringement against Micromax for eight of its SEPs which related to its 2G, 3G and EDGE devices, in the Delhi High Court. In response, on the 19th of March 2013, the Court passed an order stating that both the companies would enter into a contract under FRAND terms for the next month purely under an ad-interim arrangement, with prescribed royalties given in the table below.

A mediator was appointed to resolve the disputes between the two companies, but it was in vain. As a result, on the 24th of June 2013, Micromax filed information under Section 19(1)(a) of the Competition Act, 2002, alleging Ericsson to have inculcated an abusive and unfair mode of setting royalties. On the 12th of November 2014, the Court agreed to a new set of interim arrangement for the parties wherein Micromax was asked to pay the royalty on different terms given in the table below.

 

Phones/devices Capable of GSM Capable of GPRS + GSM Capable of EDGE+ GRPS+GSM WCDMA/HSPA, calling tablets
From 19/03/2013(earlier interim order) 1.25% of sale price 1.75% of sale price 2% of sale price 2% of sale price Dongles or data cards- USD 2.50
From date of filing till 12/11/2015 (later interim order) 0.8% of net selling price 0.8% of net selling price 1% of net selling price 1% of net selling price
From 13/11/2015 to 12/11/2016 0.8% of net selling price 0.8% of net selling price 1.1% of net selling price 1.1% of net selling price
From 13/11/2016 to 12/11/2020 0.8% of net selling price 1% of net selling price 1.3% of net selling price 1.3% of net selling price

 

With regard to the complaint filed by Micromax, it was stated that Ericsson was allegedly demanding an unfair royalty for its SEPs relating to the GSM Technology. It contended that the royalty should be based on the patents relating to the chipset technology and not arbitrarily calculate the royalty as a percentage of the sales price of the licensed downstream product[7]. It also stated that Ericsson was confident that there was no alternate technology for its patents in the market and hence, Ericsson believed that it had the right to charge such royalty for its patents. Moreover, Ericsson also wanted Micromax to sign a Non-Disclosure Agreement, which was restrictive and was not in conformance with the FRAND terms. On the 12th of November 2013, under Section 26(1) of the Competition Act, 2002, in pursuance to the complaint filed by Micromax, the CCI laid down the following:

  1. Ericsson was the largest holder of SEPs in the country with regard to 2G, 3G and 4G patents used for smart phones, tablets, etc. Due to this, it undoubtedly held a dominant position in the market for devices that use the GSM and CDMA standards.
  2. While FRAND licenses were primarily meant to prevent patent hold-up and royalty stacking, the competitive endurance showcased by such SEP holders might prove detrimental to their integrity.
  3. Ericsson’s royalty rates were excessive and absurd, and these royalties had not linkage to the patented products. Thus, it was clear that there were discriminatory and contrary to the FRAND terms.

Due to these inferences, CCI ordered for an investigation on the same matter by the Director General, which was challenged by Ericsson in the court. What happened to the case from this point shall be discussed in detail in combination with two other cases with Ericsson.

 5. ERICSSON AND INTEX CASE

In 2013, Intex had filed a suit against Ericsson on the same terms as in the case of Micromax, about setting discriminatory and unreasonable royalties for the SEPs. The CCI, on its account, ordered for an investigation along with the complaint filed in the previous case. Ericsson filed a writ petition against this move for an investigation. Alongside, it filed a suit against Intex for the alleged patent infringement of the same eight patents and demanded damages of Rs. 56 crores.

6. ERICSSON AND BEST IT WORLD (INDIA)

In November 2011, Ericsson had sent a letter to Best IT World that it had infringed the same eight patents as in the previous cases due to its GSM and WCDMA related products. Ericsson suggested both the companies get into a Global Patent Licensing Agreement (GPLA) for all the infringed patents. Best IT stated that it was interested in entering the said agreement only under the condition that Ericsson discloses the alleged infringed patents in order to find out whether the allegations were valid and enforceable in the country. Ericsson intentionally refused to respond to that request and went ahead to impose the need to draft an NDA with ten years confidentiality agreement wherein all the confidential information would be shared only with the company affiliated to it, and any disputes arising out of the same would be settled in Stockholm, Ericsson’s location of its headquarters, which was evidently onerous and one-sided.  It further stated that the license agreement to be entered into would have to apply to the previous and future sale of the company. In September 2015, Best IT filed a suit under Section 4 of the Competition Act, 2002 against Ericsson for an abuse of dominant position.

Thus, as occurred in the cases above, the CCI ordered for an investigation to take place. Ericsson challenged the order of CCI and claimed that the order was ‘arbitrary in nature and without jurisdiction’. It was noticed by the Delhi High Court that the plea by Best IT ought to be disregarded as it had not entered into the licensing agreement with Ericsson and that it was evident that it used Ericsson’s SEPs.

ANALYSIS OF THE ABOVE ERICSSON CASES

Extracting the detail from the Micromax v Ericsson case, Intex v Ericsson case and Best IT World (India) v Ericsson case about Ericsson filing writ petition against the order of CCI for investigations, as per the judgment laid down by the Delhi High Court on the 30th of March 2016, the CCI had the authority to direct the investigations as in the event of an abuse of dominance, jurisdiction lies within the scope of Competition Act. The court agreed to use the net sales prices of the downstream product as the royalty base, and ordered that the royalty for licenses based on FRAND must be derived from sound economic reasoning.

In the Micromax case, the court ordered Micromax to pay the royalties as per the rates stated in the later interim order, rates mentioned in the table.

By the judgment delivered on the 13th of March, 2015, the Delhi High Court ordered that the royalties which were stated in the case of Ericsson v Micromax shall be applicable in this case too. The only difference that lies is that the court ordered Intex to pay 50% of the royalty as per total selling price per device and not chipset, from the date of filing of the suit till 1st of March, 2015, shall be paid directly to Ericsson by way of a bank draft within four weeks from the date of the judgement. The balance shall be secured with a bank guarantee within the said four weeks with the Registrar General, who would invest the same in an FDR for twelve months.

As per the order passed on the 2nd of September, 2015, the court declared that Best IT World must restrict importing mobiles, handsets, devices, tablets, etc. all articles that infringe the patents of Ericsson, which would be operative from the 9th of September, 2015.

7. ERICSSON AND XIAOMI TECHNOLOGY

Ericsson had filed a patent infringement suit for eight of its patents essential to 2G and 3G standards registered in India, against Xiaomi in December 2014. Ericsson had requested to obtain license from it before it sold the infringing products in India, but Xiaomi had entered into an agreement with Flipkart Internet Private Limited to sell the products under Xiaomi’s name. It had begun launching such products from the month of July 2014. Subsequently, the court had issued an injunction order against Xiaomi to restrain the import or sale of its infringing device. Xiaomi appealed to the injunction stating that it had entered into a ‘Multi Product License Agreement’ with Qualcomm Incorporated and used the chipset, which in turn was licensed to Qualcomm by Ericsson. Thus, it argued that it had not infringed any of Ericsson’s patents. As an interim measure, on the 16th of December 2014, the court allowed Xiaomi to sell only those devices that contained the chipsets, which were licensed by Qualcomm and had to deposit Rs.100 per device with the Registrar General of the Delhi High Court.

On the 22nd of April, 2016, the Court revoked the interim injunction on Xiaomi on account of concealment of significant information regarding the alleged infringing patents, by Ericsson. It laid down that Xiaomi was using the 3G patents licensed by Qualcomm, which in turn was licensed to it by Ericsson. The amount of royalty paid by Xiaomi to Qualcomm was provided to Ericsson as royalty and hence, there lay no requirement of paying royalty directly to Ericsson.

8. ERICSSON AND LAVA INTERNATIONAL PRIVATE LIMITED

Ericsson challenged Lava in a suit for patent infringement related to its AMR, GSM and EDGE technologies. On an order passed by the Delhi High Court in March 2015, both the companies tried to negotiate an agreement on FRAND terms but it was in vain. An interim order was passed by the Delhi High Court, operative from the 21st of June, 2016, ordering an injunction to prevent the import, export, manufacture and sale of mobile phones that use the concerned patents of Ericsson. The final order on the case is still pending before the Court.

With the judiciary at the brim of delivering justice to the deserving, the SSOs and various organization striving to protect the rights and inventions of the lawful owners, the Intellectual Property Appellate Board to discuss matters of concern of the distressed, and the laws on various aspects merging to bridge the gap between the people and justice, it is almost impossible to fathom a situation wherein the aggrieved parties could not be redressed. The only aspect which have to be looked into by these mechanisms is its clear and untainted practice. The salvo of the dominance and power of multi-national companies being fired at domestic companies who strive to maintain a position in the market have to be adjudicated in a fair manner, without any involvement of duress and coercion. The elixir of righteousness lies in the hands of these deciding authorities. The real question here is ‘Would the adjudicators choose impartiality and morality, or would they surrender to dominance?’

About the Author : Ms. Anjana Mohan, Symbiosis Law School, Pune, intern at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the intern and do not reflect the views of either of any of the employees or employers. Queries regarding this may be directed to swapnil@khuranaandkhurana.com or swapnils@khuranaandkhurana.com.

9. REFERENCES

1. ONLINE NEWSPAPER/ MAGAZINE/BLOG ARTICLES

a. Narula, Ranjan. “Standard Essential Patents.” Rouse The Magazine, 2015. Available On Http://Www.Rouse.Com/Magazine/News/Standard-Essential-Patents/?Tag=India

b. Rao D And Shabana N, Standard Essential Patents, Singhania & Partners, Available On Http://Www.Singhania.In/Wp-Content/Uploads/2016/04/Standard-Essential-Patents.Pdf

c. Lakshane R, “Compilation of Mobile Phone Patent Litigation Cases in India”, The Centre for Internet & Society, Available on http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india

d. Chawla K, “Ericsson v. Intex, Part 1- SEPs, Injunctions, and gathering clouds for Software Patenting?”, SpicyIP, available on http://spicyip.com/2015/03/ericsson-v-intex-part-1-seps-and-injunctions-and-a-new-era-of-software-patenting.html

2. ONLINE JOURNALS AND OTHER GUIDELINES

a. Sidak G, Frand In India: The Delhi High Court’s Emerging Jurisprudence On Royalties For Standard-Essential Patents, Journel Of Intellectual Property Law & Practise, 2015, Vol. 100, No.8, Available On Https://Www.Criterioneconomics.Com/Docs/Frand-In-India-Royalties-For-Standard-Essential-Patents.Pdf

b. Meniere Y, ‘Fair, Reasonable And Non-Discriminatory (Frand) Licensing Terms’, Jrc Science And Policy Report, 2015, Available On Http://Is.Jrc.Ec.Europa.Eu/Pages/Isg/Euripidis/Documents/05.Frandreport.Pdf

c. Department Of Industrial Policy And Promotion, Ministry Of Commerce & Industry, Government Of India, Discussion Paper On Standard Essential Patents And Their Availability On Frand Terms, Available On Http://Www.Ipindia.Nic.In/Whats_New/Standardessentialpaper_01march2016.Pdf

d. Agreement On Technical Barriers To Trade, Annexure I, Available At Https://Www.Wto.Org/English/Docs_E/Legal_E/17-Tbt.Pdf

e. Delhi High Court Cases, available on http://delhihighcourt.nic.in/

f. Indiankanoon, available on http://indiankanoon.com/