Dear Editor,
The central question before the court while deciding upon the matter of granting an injunction in standard essential patent (SEP) cases is whether the plaintiff has established a prima facie case of:
- Defendant infringing the SEP
- Validity of the SEP
- Essentiality of the SEP alleged to be infringed by the defendant
- No abuse of dominant position by the SEP owner (plaintiff)
The first and second issues are common for any patent infringement cases, and it is not difficult for a plaintiff to establish a prima facie case on these issues in SEP infringement cases in India, considering invention covered by patent has been adopted as standard for an industry with competing alternative technologies. Even if the defendant has tried to take the defence of non-infringement and invalidity of the patent, Delhi High Court has disregarded such defence as frivolous.
The court has sometimes overlooked the latter two issues while granting injunctions based on the conduct of both plaintiff and defendant, and past interaction between plaintiff and defendant before filing of an infringement suit. Generally, the patentee files for SEP infringement only after failing to negotiate a licence agreement with the infringer, which in itself is a long and complicated process. The SEP owner is obliged to make an offer of licence agreement with fair, reasonable and non-discriminatory (FRAND) terms and conditions to the infringer in return for a declaration of its patent as standard by the standard setting organization. Non-compliance with such a step is prejudicial to the plaintiff in an SEP infringement suit, specifically for grant of an interim injunction order.
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In Ericsson v Intex, despite the unwillingness of the defendant to obtain a FRAND licence, representatives of both parties agreed on a revised rate offered by the plaintiff to the defendant. Later the defendant backed off from the offer and filed proceedings before the IPAB [Intellectual Property Appellate Board] and CCI [Competition Committee of India] against the plaintiff. The plaintiff was never informed by the defendants of such proceedings while giving the impression to the plaintiff that it still had a bona fide interest in taking a licence from the plaintiff.
Such conduct was held by Delhi High Court to be an indication of unwillingness of the defendant to obtain a FRAND licence from the plaintiff. Hence, where the defendant is itself unwilling to enter into a licence agreement then allegations of abuse of dominant position do not have any ground.
But the court had also emphasized the credibility of the defence raised by the defendant, and bad faith of the defendant, considering it had filed proceedings before the IPAB and CCI while negotiating on a FRAND licence. But, the filing of proceedings before the CCI is relevant as long as it is consistent with the position of the defendant being a willing licensee, and there is no defence of non-essentiality and non-infringement of the patent.
On the other hand, in the case of Ericsson v Lava, the same judge of Delhi High Court (Justice Manmohan Singh) ruled just the opposite of what was held in Ericsson v Intex:
“The fact that the defendant is aware of the plaintiff’s patents but has not challenged their validity, and hence admits the same, should be a factor in favour of grant of injunction.”
This is complete opposite to the stance taken by Justice Singh in the case of Ericsson v Intex while adjudicating on the prima facie case of abuse of dominant position, where the fact that the defendant had filed for invalidation was held to lead to the conclusion that there was no prima facie case of abuse of dominant position. This decision of the court will leave defendants in such suits of SEP infringements clueless, because no matter whether the defendant files for invalidation of patent or not, in both cases the court takes it as negative behaviour for establishing a prima facie case of abuse of dominant position.
The court could consider each and every aspect of developments before filing of SEP infringement cases and establish guidelines and factors for determining whether each party has acted in good faith during negotiations. This would be useful in the future, when there will be new SEP infringement cases on implementation of 4G and 5G standard technologies in India.
Indian courts also need to remove automaticity of injunctive relief, specifically in cases involving infringement of SEPs. The grant of injunctive relief might lead to the socially undesirable result of loss of jobs upon closure of a defendant’s business.
Pranav Narang
Final year student at Jindal Global Law School
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