The plaintiffs, in the present suit, sought permanent injunction against the defendants restraining them from infringing the right of the plaintiffs in their registered patent No. IN 243980 titled as ‘Mobile Station Operable with Radio Access Network and a Packet Data Serving Node and a Method for Operating Such Mobile Station’ (“Patent”).The plaintiffs also sought for rendition of accounts and damages. In the meanwhile, they sought interim injunction against the defendants.
It was claimed that the Patent is one of the essential ingredients of the technology used in CDMA2000 and CDMA2000 Rev A and Rev B. The plaintiffs placed on record a) the web-pages of the site of the defendants which demonstrate the use of the Patent and b) expert’s report.
Considering the evidence placed, the Court concluded that the case satisfied the three conditions for grant of temporary injunction in favour of the plaintiff viz., existence of a prima facie case, balance of convenience and probability for suffering irreparable loss and injury.
Accordingly, the defendants were restrained from manufacturing, assembling, importing, selling or offering for sale or advertising on their products (telephone instruments, mobile handsets, tablets, handheld devices, dongles etc.) or any other similar devices that include the 3G technology CDMA2000 and CDMA2000 with Rev A and/ or Rev B which may amount to the infringement of the Patent.
As and when any consignment is imported by the defendants, the Customs Authorities at Mumbai, Delhi, Chennai and Kolkata shall intimate the plaintiffs about the same and objections, if any, of the plaintiffs thereto will be decided as per the provisions of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The Court also appointed Local Commissioners for inter alia inspection of the books of accounts, sales records of infringing equipments and collection of sample material.
The Patent is one of the essential ingredients of CDMA2000 and CDMA2000 Rev A and Rev B standards (which are used by the defendants in mobile handsets, dongles, tablets and infrastructural equipments). According to the petitioner, the mere fact that the defendants are using CDMA 2000 and CDMA2000 Rev A and Rev B ipso facto means that the Patent is used. It can, thus, be logically concluded that the Patent is a Standard Essential Patent (“SEP”). [For the conceptual understanding of SEPs and FRAND obligations arising out of SEPs, see this].
The instant Order is similar to the Order granted in Ericsson v. Micromax [covered here and here]. In the aforesaid case, a lawsuit was filed by Ericsson against the Indian company, Micromax for violating eight of its SEPs. An ex-parte interim injunction restraining Micromax from infringing Ericsson’s patents was issued by the Delhi High Court on the very first day on which it heard the lawsuit.
The granting of ex-parte interim injunctions in patent litigations especially those concerning SEPs are quite disturbing. As Prashant had discussed in Business Standard, the most compelling ground for issuing an ex-parte interim injunction is ‘urgency’. Usually an ‘urgent’ situation is where the plaintiff will suffer irreparable injury if it waits for the courts to issue notice to the opposite side, hear arguments and subsequently pass an order. Such ex-parte orders are an exception to the general rule, which is to issue injunctions only after hearing both sides to the dispute. The ‘urgency’ element in the instant suit initiated by Vringo Infrastructure Inc is not even discussed!! I am not sure whether it was even argued. Further, unlike trademark, there is no presumption of validity in favour of a patent under Indian law. This makes the act of granting ex-parte interim injunction/s all the more legally untenable.
The instant Order may weaken the position of the defendant if it decides to negotiate with the petitioner on royalty. As we had pointed out earlier, fixing of FRAND (fair, reasonable and non-discriminatory) royalty rate for a SEP is generally an arduous task. [As we had posted earlier, the Microsoft v. Motorola decision of the US District Court for the Western District of Washington delivered on April 25, 2013, is the first authoritative guidance on fixing FRAND royalties.] Any demand for unreasonable royalty can, however, be raised before Competition Commission of India (“CCI”). The CCI will order further investigation if the demand is prima facie anti-competitive in nature.