SpicyIP:
Yesterday, the Delhi High Court granted an ex parte injunction order against Chinese operator Xiaomi for infringement of Ericsson’s patents. The patents in question are Standard, Essential Patents (SEPs) which are subject to FRAND (Fair, Reasonable and Non-Discriminatory) terms.
There is some question as to the validity of this ruling. A more traditional approach would be to seek damages after the fact. But Ericsson has been pursuing this disagreement with Xiaomi for years.
One factor that the Court found persuasive was that Xiaomi had not responded to Ericsson’s repeated communications (6 in number from July 2014). However, it must be questioned whether Xiaomi’s purported laxity in this matter is a sufficient reason to grant an injunction against them. More so, when an alternative remedy in the form of damages is available which is one of the cardinal principles that goes against the granting of injunctions.
What does the injunction cover?
This ex parte order injuncts Xiaomi from selling, advertising, manufacturing or importing devices that infringe the SEPs in question. The judge also directed the Customs officials to stop the imports under the IPR Rules, 2007. Moreover, local commissioners have been appointed to visit Xiaomi officers to ensure the implementation of these orders.
India is a huge market, second in importance to Xiaomi only to China. Ericsson certainly has Xiaomi’s attention now.
If the phones are loss-leaders, can you get “damages after the fact”? And even if you can, that can’t be a fast process. If you’ve got the option of an injunction, why not take it? I’m willing to bet that Xiaomi will respond to Ericsson now.
I also wonder about the politics of this. Xiaomi is certainly one of China’s biggest up-and-comers. To me, it looks like India is saying “don’t think you can come here and play fast and loose in our markets. If Ericsson has been perceived a well-behaved corporate citizen in India and got this, perhaps dubious, injunction against a company that’s certainly not the most, uh…original (e.g. http://www.cultofandroid.com/66569/xiaomi-dont-copy-apple/), then that sends a pretty clear message, “mind your manners or GTFO.”
Seems to me that the injunction is fair. It appears that Ericsson tried to set up a deal and was ignored. FRAND doesn’t mean free for all, so Xiaomi is apparently blatantly violating the patents. So bar them from selling anything.
Test for how/if Xiaomi will find success in other markets outside of China selling phones with stolen IP.
In Xiaomi’s defense, these are Standards Essential Patents, so you can’t really steal them, unless you never pay at all. It’s just that up to now, they haven’t.
It could just be that they were waiting for that envelope with the red “last notice before collection” stamped on it. If so, they just got it.
Yes, i suppose its okay for Xiaomi to pay Ericsson when they get around to it. Say a decade from now, when the phones are obsolete.
It’s been less than 6 months. Let’s not call Xioami deadbeats yet.
Deadbeats? No. Serial infringers? Yes.