Telefonaktiebolaget LM Ericsson v. Micromax Informatics Ltd.

“SEP licensing must be fair — delays, avoidance, or opaque negotiations will not shield an implementer from FRAND obligations.”

Summary

This landmark Delhi High Court dispute centred on Ericsson’s Standard Essential Patents (SEPs) for 2G, 3G and EDGE technologies and Micromax’s use of these technologies in mobile devices without a FRAND licence. Micromax argued that Ericsson’s royalty demands were excessive and discriminatory. Ericsson maintained that Micromax continuously delayed negotiations while using patented technologies. The Court stepped in to determine interim FRAND-aligned terms, emphasising that implementers must negotiate fairly and cannot commercially exploit SEPs without licences.

Facts of the Case

Ericsson held several SEPs essential for GSM/3G telecom standards. Micromax had been manufacturing and selling devices compliant with these standards for years. Ericsson initiated negotiations offering a FRAND-based global licensing structure. Micromax repeatedly questioned the royalty methodology and refused to sign interim agreements, although its phones continued to use Ericsson’s technology. Ericsson approached the Delhi High Court alleging infringement and arguing that Micromax was unwilling to enter a FRAND licence. Micromax filed a counter-complaint before the Competition Commission of India (CCI) alleging Ericsson’s rates were exploitative.

Findings / Reasoning

The Court held that SEP owners are entitled to royalties that reflect the essential nature of their patents. If an implementer continues commercial use without a licence, it cannot complain about interim royalty orders. The Court found that Micromax’s conduct — delaying negotiations and failing to agree on interim terms — showed unwillingness under FRAND principles. The CCI proceedings did not prevent the Court from granting relief in the patent infringement claim. The Court fixed temporary royalty payments for Micromax based on global industry practices. It also recognised that royalty based on device price (and not chipset cost) could be valid depending on market norms.

Suggestions / Observations

The case reinforced the obligation on both sides to negotiate transparently. SEP owners must provide clear, reasoned royalty structures, while implementers cannot delay licensing simply to gain competitive advantage. Regulators, courts and parties must maintain balance between patent enforcement and competition law concerns. The Court emphasised that India is part of the global telecom ecosystem, and FRAND practices must align with international licensing behaviour.

Judgment / Decision

The Delhi High Court ordered Micromax to pay interim royalties on units sold during the litigation and to continue negotiations in good faith with Ericsson. The Court refused to stay infringement proceedings despite the parallel CCI inquiry.

Judgment Year : 2013–2014 (multiple interim orders delivered).